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Updated about 1 year ago on . Most recent reply
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BRRR apartment complex
Hey Team,
What are the details that go into buying and renovating a 40+ unit apartment complex?
The property is down to the studs and needs a new roof. This a complete remodel.
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- Cincinnati, OH
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@Kofi Thompson, this is a very broad question.
Buying: at a very high level, you need to know construction costs, stabilized rents, expenses, reserve requirement and debt service, and your return threshold. You will need to know ARV, which will be driven by stabilized NOI and market cap rates.
All that will lead to an offer price. From there, submit offer, counter and negotiate, get awarded deal. Begin contract negotiations. Sign contract, submit deposit, complete Due diligence, secure equity and financing, close on deal.
Renovating: if you are down to studs, you are going to likely need full plans and permits. Before you get to finishes, you need to know if foundation, roof, plumbing tie ins, etc are going to need work.
Then you will have any new/changes to framing, plumbing and electric rough-ins, insulation, drywall, trim, doors, flooring, paint, finish plumbing, finish electrical, at a very high level. But flooring could be up to 3 different people, if you are doing a combination of carpet, tile and hardwoods.
At the end of the day, I would generally assume you are not ready for a project like this, if you are asking this question.