6 Family Apartment Building

[Jaryn Pierson]

Hi All

I have a 6 family apartment building I've been starting to look a little deeper into.  I've done the underwriting of the property first from a distance, and then zoomed in a bit closer and underwrote the deal as both a before, and after some common space renovations.

The property is owned by two brothers who definitely want out.  They've been handed the property down from their parents, have mismanaged it pretty poorly, and now have had to property fall out of escrow twice over the last year due to hard money falling through.  Nobody is on a lease, and although some capex stuff has been done over the last couple of years (roof, sewer line), many other things have not.

For starters, the four upstairs units are on their own electric meters, but the two downstairs units as well as the common spaces are all on one meter.  At the very least, all the electrical meters will have to be moved outside once any work starts, and I'm looking at 7 new meters and 7 new panels.  My question is, what are some resources I could look at for commercial that will show exactly what type of things will be tripped once I start doing some work.  I'm ok with the electrical work, but if all of a sudden all the plumbing needs to be replaced because of something, and then the fire suppression system etc I'll be in trouble real quick.  

I've never bought anything over 4 units so this is me wading into uncomfortable territory, but I do feel like with the right value adds over time this thing has the potential to be a great buy for me longterm.

Thoughts?

ps as far as building codes go, I'm in the state of Massachusetts

[Tom O.]

Quote from @Jaryn Pierson:

Hi All

I have a 6 family apartment building I've been starting to look a little deeper into.  I've done the underwriting of the property first from a distance, and then zoomed in a bit closer and underwrote the deal as both a before, and after some common space renovations.

The property is owned by two brothers who definitely want out.  They've been handed the property down from their parents, have mismanaged it pretty poorly, and now have had to property fall out of escrow twice over the last year due to hard money falling through.  Nobody is on a lease, and although some capex stuff has been done over the last couple of years (roof, sewer line), many other things have not.

For starters, the four upstairs units are on their own electric meters, but the two downstairs units as well as the common spaces are all on one meter.  At the very least, all the electrical meters will have to be moved outside once any work starts, and I'm looking at 7 new meters and 7 new panels.  My question is, what are some resources I could look at for commercial that will show exactly what type of things will be tripped once I start doing some work.  I'm ok with the electrical work, but if all of a sudden all the plumbing needs to be replaced because of something, and then the fire suppression system etc I'll be in trouble real quick.  

I've never bought anything over 4 units so this is me wading into uncomfortable territory, but I do feel like with the right value adds over time this thing has the potential to be a great buy for me longterm.

Thoughts?

ps as far as building codes go, I'm in the state of Massachusetts

 Instead of asking us you should ask a local general contractor. Based on the age and what kind of plumbing was put in you should have some ideas after a thorough inspection.