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Updated over 4 years ago,
How Different is 3 Family Versus a 4 Family?
Not All Multi Family Properties Are Built the Same
Things we have learned over time with multi family properties
1. The difference between a 3 unit & a 4 unit is huge!!!
Key differences:
A. 4 unit building is typically rated as commercial, which means that a sprinkler system may be required.
B. Depending on your locale, the town/city may require that you have 2 off street parking spaces per rental unit.
C. Commercial units are subject to code inspection if they have been vacant for more than 24 months (this is the case for the towns we work in, in Central Massachusetts). This means the town reserves the right to have their building department walk through the property and check all systems, and enforce current building codes.
Keeping these things in mind is important, the cost to deal with these items runs into the tens of thousands per unit. The cost to cure a 4 unit versus a 3 unit is not linear, it is disproportionately greater. Item C is particularly tricky, we just interacted with a friend that purchased a commercial building from a bank at auction, he thought he was getting a great deal and banks are not forthcoming when they are selling at auction. The result has been a painful resale process that has cost him a lot of time, energy and money.
Daily property search (daily grind):
Foreclosure Auction Site 1: nothing in our markets
Foreclosure Auction Site 2: nothing in our markets
MLS Search: nothing meeting criteria
Short sale search: nothing meeting criteria
Online Auction Site 1: nothing meeting criteria
Online Auction Site 2: nothing meeting criteria
What is the charge for the plaster work on active project 1?
Followed up on the lead from BP today; left message. Owner has a $227K mortgage, likely current balance is over $180,000 - likely too high to be worthwhile.
Replied to the Agent referral regarding the multi family properties; advised $250,000 would be a reasonable purchase price for each building, that price would create enough room for us to overhaul heat & electric and do minor cosmetic repairs to the units and keep them rented...