Best / Worst Capex affecting NOI on a MF reposition

[Samy Kahoul]

Hello All,

What would you say has been the best returns / worsts Capex investments done in terms of impact on the NOI. We have taken possession of a MF that has been poorly managed for the past few years + a lot of differed maintenance + undervalued rent (previous owners didn't put a $ in the property but also didn't increase rents). Our current plan is to do the urgent structural repairs + renovate units as they become vacant (Kitchen/bathrooms/fixtures...). We also have a vision for the common areas / elevator / parking, however I would like to get your opinion on how to prioritize the different Capex/renovations in a MF repositioning plan, what has work well for you in past deals and what hasn't been worth the investment.

Thanks 

[Jeff Greenberg]

First of all health and safety issues need to be taken care. Deferred maint. related to the preservation of the property also need to be done. You may or may not see much of an ROI on these. If your exteriors look really bad you may never get anyone inside to see any work you have done on the inside, so you need to give it some curb appeal.Don't forget about the leasing office as that will give them the first impression. Then you can start on the interiors one at a time if needed. Here is where you will start seeing your ROI.