The great Value Add ideas thread - Calling all MF owners

[Joseph Gozlan]

Calling all MF owners <<<

Do you have ideas how to add value to multi family properties? Let's add them all in a big thread and then we can either ask the mods to make it a sticky or I could aggregate it all into an excel file and load it to the files section.

Don't be afraid in being specific about an area/type/location of the property, even if it's not relevant to all, it might help someone in similar situation.

I'll get us started with some ideas and it's divided to 3 categories:

Increase Units Attractiveness

• Christmas lights during holidays
• if none, add Dishwashers
• Initiate a referral program

Extra Income

• Add Storage units
• If relevant, install a highway sign for advertising
• Reserved parking
• Convert a unit to a vacation rental (in appropriate locations)

Reduce Expenses

• Check with the city what you can get for free (i.e. Fort Worth offer low-flow toilets for free)
• Buy in bulk
• Stock on AC condensers from CraigsList (negotiate a super cheap price)

looking forward to read your ideas!

Joe

[David Thompson]

Hi Joseph,

Great post. I'd love to consolidate this list and put it out on a blog w/BP if you'd like to tag on it w/me.  Let me share one idea that you can take to the bank in Dallas.  We have purchased 6 large value add MF properties in the N/NE side of Dallas in the past 12 months.  Most of these are 1980s builds.  For some reason back then, despite some torrid summer heat and occasionally nasty hail storms in Dallas, they don't have covered parking. Let me play out the power of this one.  We purchased a 320 unit.  After purchase, we surveyed the residents and 200 of the 300+ said they would pay $25/mo for covered parking.  We built covered parking (B/E in 18mos estimate) but the value add is significant.  $25/mo x 200 = $5K/mo x 12mos = $60K/yr additional income divided by .06 cap rate = $1M in equity added.  This is the true power of commercial property, finding many of these types of plays can really add up.  Keep in mind, the investors liked the project and numbers even before these additional savings plays were found after the deal was closed.