All Forum Posts by: Roy N.

@Taylor Jennings

I too am certain repairs on the gutted properties will exceed 25K per property ... I had tossed out a range of 15-25K per unit in my earlier post. This would be 90 - 150K on a 6-unit building. If fixtures, plumbing and wiring have been stripped and/or the buildings have been left unheated during {part of} the past ~7years, there could be additional costs.

As for the seven unit, whether you need to rehab is ultimately your call, but just looking a the small window provided by the pictures you posted, I would be planning to "freshen"/update the units and address some layout/usability awkwardness. Of course, you need to walk the property to get a good fell for the overall size of the needed renovations and how to approach it, but I would factor ~60 - 70K into my analysis and frame my offer accordingly.

Josh,

As someone whose company develops for both iOS and Android, I don't buy the massive pain argument. Yes, it is true Android runs across a wider spectrum of hardware devices and, consequently, Android apps, need be aware of the platform on which they are running and adjust themselves (display size, networking options, specific hardware devices{GPS, NFC} etc) accordingly.

Despite the fact iOS runs on a much smaller, more uniform, set of hardware devices, good development practice would see the same platform awareness measures taken.

Fortunately for you, unless you have a specialized need, there are library APIs on both platforms which assist your app to adjust itself to the platform on which is it running.

I will admit, I have not played with the BP iOS app to see how it was implemented, but I cannot imagine it requiring anything out of the routine (i.e no special hardware or low-level access required). Now, if you are simply trying to flop an iOS app onto Android (or vice versa), it's quite likely not going to have a native look-n-feel on the other platform.

... just be glad, there is no demand for you to provide an app on Windows Phone ;-P

@Taylor Jennings

Just to clarify - are the seven units spread across the three properties? If not, what is the unit count in the other two properties? By "gutted" are we talking back to studs and in need of full rebuild? Pending the definition of "gutted", your costs to rent ready could be 15 - 25K/unit on these 'other two' buildings.

On the 7-unit building, based on the posted pictures, you could still be into 7-10K per unit in updates, pending how handy you are and how much time you have.

I could be an opportunity, I do have student apartments, but I'm leaning in the same direction as @Ben Leybovich on this one. If you can source the capital to return all units to rent-ready and the owner is willing to carry 100% financing interest only on a 5+-year balloon ... you might get these turned around and performing by the anniversary and be able to finance more conventionally.

Pending the total number of "potential" units, 198K might be reasonable {if the adjacent buildings are also of similar size (5-8 units) }, but looking at the numbers and condition (based on pictures) on the 7-unit alone, I'd be aiming a fair bit lower than that.

@BRadley Cottam

If you are getting into buy-and-hold real estate investments, then do not count on appreciation in your evaluation of properties. In fact, if you want to be extra conservative, model your property with a 1-2%/year depreciation over your planned hold period.

Now, if your goal is real estate speculation, by-all-means, continue to bank on appreciation.

I too am attracted to the shunned, lonely, ugly properties on MLS (& ICX) ... at the moment asbestus asphalt shingles have this darling little triplex sitting ~150 DOM.

The word asbestus freaks people out ... I just price abatement into my offer and wait :)

Why not purchase a nice small multi-family property (duplex, triplex, or quadraplex), live in one unit and have folks in others pay your mortgage. Then in two or three, move your family into a property with fewer units.

Brian Knox:

In situations where we need to do work on a unit and it is not going to be habitable, I first try to place them in a vacant unit (which I will furnish). If that is not possible, then I will spring for motel/hotel.

Some tenants are reluctant to leave their home. If there is another functional 1/2 bath in the house, you might be able to arrange for them to shower at a local YMCA/Gym if this is their preference.

If you are already back to the studs, then smile ... removing lath-n-plaster is a filthy job :) This would be a good opportunity to spray foam those walls ... I presume you want insulation in Az for predominately the opposite reason we want it here {i.e. you want to keep heat out}. Are the ceilings dropped as well? If the ceilings are down, then inspecting the electrical and rewiring where necessary will be much easier.

If there is asbestus in the attic insulation, then an abatement service will come and vacuum it out for you.

In a 1930s vintage home around here, I would also be checking for asbestos in plaster (though it may be old enough to predate that practice) and any floor and/or ceiling tiles.

We would also assume no insulation behind the lath-and-plaster unless it was added later (around here that often means UFFI in the 70s, which is another host of problems). The same for the attic and eaves ... and, as Alex mentioned, if you attic insulation looks like a granular blown insulation (vermiculite) have it tested to ensure there is no asbestus.

In addition to verifying your electrical entrance (60 amp if original) and the age of the panel (fuses or breakers), I would also pull some outlets, switches, and light fixtures to inspect the wire on that end. We encountered older houses with 200amp entrances, new panels, yet someone didn't want to pull wires through a lath-and-plaster ceiling, so they spliced (illegally) into existing knob-and-tube or {not quite as old} ungrounded wiring.

Stephen:

If the waste line is original, then cast iron is your best case scenario ... and 90yr old cast iron is quite likely at end-of-life. I've replaced two in the last year ... one was 85, the other just over 100. Cast iron will rust from both sides when buried. Inside the building look for the tell-tale weeping bubbles on the pipes.

If you are going to be digging to the curb and replacing supply, the incremental for replacing waste will be small compared to returning in 3-5 (maybe 10 if you fortunate) years to dig again.

Sometimes, if the pipe to the curb is not too bad, you can insert a sleeve through it ... basically put a synthetic pipe inside the cast iron. That wasn't possible at my locations as the pipes were too deteriorated and rough on the inside. When you have line locates performed on your supply and waste lines, and have them scoped as Joel suggested, the plumber / City water engineer will be able to tell you if your wast line can be sleeved {though, where you would be breaking ground already, I wouldn't bother}.

Also, when you get your estimates from the plumbers ... add a sufficient "what-the-*-is-this" buffer to the number (say 25-30%) ... then adjust your offer.