Making an Offer on Older Multifamily

[Davit Gharibyan]

Hi fellow investors. I have a silly question. I have been shopping quite a bit older apartment buildings (60-70's). Many properties have outdated kitchens and bathrooms. The units are still functional but in serious need of updating. My question is, if for example I am going to spend $7,000(price can be anything) per unit to update, would I factor than cost into the offer? On one hand the cabinets and bathrooms still work and not broken, but on the other hand they're super old.

How would you go in this situation?

[Mark Albini]

@Davit Gharibyan

This is a very good mindset that new investors typically do not have.

Yes, factor that into the cost, but you're correct in thinking that they still have a value.

I run into it all the time (realtor) where client thinks because they spent $10k remodeling the house is worth $10k more. Unfortunately, it is not, because the older "stuff" still has a value.

When sending over your offer it's better to justify with comps and reasoning due to condition.