100+ Year Old Duplexes in Minneapolis?

Question

In looking at the Minneapolis market, many multifamily homes are built around the 1900s. This is going on 122 years old, which means many harsh winters, degradation, foundation issues, etc. Many have boiler heat and A/C wall units. Are these giant money pits? Looks like there's a smattering of duplexes built around the 1960s, and even those are getting old, e.g., 20-year old electrical boxes and whatnot. What's the general consensus of old craftsman homes built in the 1900s? Are they going to last much longer before breaking down or where they built better than today's standards? Is it a wiser investment to look towards newer built single family homes and live in one and move out after a year and rent it? Should I switch strategies from buying a "newer" duplex built in the 1960s and instead look for newer single family homes to purchase and rent out? Are people looking to rent single family homes in the Minneapolis area or are they looking to rent in Uptown and Northeast? What's working in the Minneapolis market? What should I avoid? Thanks!

John Warren · Answer

@Alex Shapiro I have the opposite opinion. I feel like most of the problems with a build design are well known by the time you approach this age! If you ask around, most contractors will know how to deal with the issues that will crop up.

I would focus on the age of the electrical system. Plumbing can go bad too, but getting to the plumbing typically only involves entering the plumbing wall in the kitchen and/or bathroom which isn't that hard. Electrical involves cutting open virtually every wall.. if the electrical has been updated that is a huge plus.

Jordan Moorhead · Answer

@Alex Shapiro duplexes this age are very common in MPLS and were typically built well. They'll generally last a long time but of course every property is different. Assuming everything is in good shape you should be too. Always have an inspection and any other inspections the home inspector recommends. My first duplex was built in 1900 in MPLS and we just sold one built in 1888 in Saint Paul.

Scott Mac · Answer

Hi Alex,

I'm NOT an expert on multifamily homes built around the 1900's in the Minneapolis market.

[BUT] Since there are so many near you, if you become an expert on these structures,

ie. structure X in a B area with 2000-ish (code) wiring and a new sewer main line sold for $XXXXX,

structure Y in a B area with 1969-ish (code) wiring and a new sewer main line sold for $YYYYY,

Electricians charge A for an up to now Code redo, (is it required if you do a B remodel, etc...)

And walk as many as you can that are for sale and keep some decent notes, it will lessen your risk of buying a "Money Pit".

Know your insurance rates, and if you get breaks in price for certain newer wired places or not.

Good Luck!

Chris Winslow · Answer

@Alex Shapiro I second what @Henry Lazerow said. Different markets but where we are it's super common to see houses this age and a lot of people do well with them. The good news is a lot of them do have good bones and are built solid.

That being said newer is great if the numbers work out but it's tough around here, I even get a little bit excited when I go to see a property that was built in the 1950s

Jordan Moorhead · Answer

These can be a great way to make great returns. Newer SFH typically won't produce as high of returns as there is no value add and no scale with multiple units.

James Hamling · Answer

@Alex Shapiro Among the various hat's I wear/have worn, one is M.Journey Carpenter, formally trained in the construction and millwright of yester-century.

The 100+yr old properties are not just built better then modern standards, there leagues beyond, like comparing a monster truck too a tonka truck, the difference is that vast.

The first and major item is the materials were vastly different from today. Today we used farmed rapid growth timber, vs the aged homes with virgin slow growth timber. The strength differential is massive. Next is fastener composition, and size. Ever hear the stories of people finding a 100, 200, 400+ yr old nail? And they look like a person could take it and use it again. Ever seen a 20yr old nail? Seen them rusted through, or even completely through? Both are nails in name only, the material composition is vastly different. Then we go into difference in milling practices where we get into nominal vs dimensional etc., the short version is older framing material is bigger.

This theme flows throughout all systems and materials, hence why 2'+ thick foundations are common in the turn of century homes and exclusive to multi-million dollar builds today.

The mindset of aged buildings, especially in MN where much of the builders were of German/Scandinavian decent/import, was building a home for durability, longevity and strength. Modern building standards utilize engineering that achieves an expected life span of on average 25-45 years (yes, that's correct, homes sold on 30yr mortgages that were engineered to last 25yrs, I saw it and worked on them). The aged homes on average have a 300+yr rating.

There is also a distinct separation to keep in mind here, we are talking about the structure, the home itself, components are a separate item. Components like cabinet's, flooring etc., that is never intended to be eternal, it's like socks, there made for use and then to be refreshed at certain intervals.

As far as building practices go by the era's, 60's were decent, 70's is when things started to go into the garbage and 80's is considered "THE" era of shoddy horrible construction as it was the perfect storm of sub-par materials and sub-par workmanship with no thought of endurance and performance.

Many are saying assess each property, that should be obvious, each site can have specific modifiers to anything and everything right. But in the conversation of building practices for structure over the era's, to build something today to the details they did in 1910 would be a 7X factor of cost vs modern build, if not more.    It's not by chance that 100+yr old building not only still stands today but is still in use.

Leo R. · Answer

@Alex Shapiro it's entirely property specific.  I have 120+ year old properties that are rock solid and rarely give me issues (they've been well-maintained, and the electrical, plumbing HVAC has been updated), and I have 10-year-old properties that are nothing but headaches (e.g.; settling and cracking foundations, poor materials and design, etc.)....of course, there are also plenty of old properties that are dumpster fires, and plenty of new properties that are excellent...it varies from property to property.

Personally, I like well-maintained old houses because most significant issues (like foundation settling) either have occurred and are clearly visible, or they've been addressed...whereas a brand new house can be a dice roll (you're basically the guinea pig who gets to be responsible for any teething problems the house might experience in the first 10-20 years of existence).

People who say "new properties are less work" are demonstrating their lack of experience--a new property is not always a guarantee of less work, and new properties sometimes have problems that old properties don't.  I once had a new, beautifully finished property that looked incredible...3 months into ownership, the finished basement flooded (the slab had been poured too close to the water table, so when ground water rose, it flooded). Trust me, that's NOT a problem you want to deal with (but I dealt with it on a new property!).

Point being: assess each property individually on its own advantages and disadvantages, and don't blindly follow overly-simplistic mantras like "new houses are better".

Good luck out there!

Michael K. · Answer

@Alex Shapiro if the building is still standing straight after 100 years it will probably continue to stay standing straight. Interior systems like plumbing, electricity and heating likely aren't original if the building is that old. Electricity was retrofitted into most of these homes. My 120 yr old 4 flat once used gas lighting. It will be important to see if any of those core systems have been updated more recently (and whether or not the work was done well). And for brick homes, some may need extensive tuckpointing which can be a huge cost once you get into larger multiunit buildings. But essentially, so long as issues are dealt with in a timely manner and proper maintenance is done, there is no reason the building can't last another hundred years. That said, your upfront costs may vary greatly depending how proactive the previous landlord was.

Henry Lazerow · Answer

In chicago market most of our 2-4 units are 120 year old range. Its fine but make sure its been maintained, most are still standing straight and have been updated over the years with some repairs to foundations, etc. When you go to cheaper areas or out in suburbs a lot more around this age have significant settling which some investors don’t mind but I personally pass on.

Todd Dexheimer · Answer

The issue with 100+ year old properties is that they are all built so differently. The code and engineering standards of today are much more defined, so you can count on getting a good structural product. A 100+ year old house may be built like a tank or may be falling down soon. You also have potentially major plumbing, electrical and HVAC issues in 1980 and older product. Those systems tend to last 20-50 years. Get a detailed inspection and if anything is slightly off, get an engineering inspection. As a contractor and someone that has owned over 500 units of 1930's and older product and 3500 units of 1970's and newer product, I'll take 2000's built all day, but often the opportunity is in the older product.

100+ Year Old Duplexes in Minneapolis?

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