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Updated over 6 years ago, 04/04/2018

User Stats

107
Posts
30
Votes
Dennis Williams
Pro Member
  • Real Estate Agent
  • Davenport, FL
30
Votes |
107
Posts

Multi Family Value add list

Dennis Williams
Pro Member
  • Real Estate Agent
  • Davenport, FL
Posted

Hello BP members!! Just wanted to start this forum for new and seasoned multi-family investors. Base on your experience, what value adds do you look for when evaluating a multi-family property?

For example (try  not to repeat the items listed below):

- Laundry room or add washer/dryer in each unit

- New roof

- Individually meter each unit electric/water

- Add small park

- Update curb appeal to include paint.

- Add small workout gym to leasing office

- Update pool area with pavers and outdoor furniture

-- List yours below --

  • Dennis Williams
  • User Stats

    1,517
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    Hadar Orkibi
    Pro Member
    • Rental Property Investor
    • USA / NZ
    811
    Votes |
    1,517
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    Hadar Orkibi
    Pro Member
    • Rental Property Investor
    • USA / NZ
    Replied

    Some of the Items you mentioned are good way to add value, but are not key factors.

    Main key factors i can think of right now are:

    1. Clean up the property.

    2. Change the tenant base.

    3. Increase rents - this is probably the easiest and #1 factor. if you fined an under rented property and have the opportunity to increase rent you are on winner.

  • Hadar Orkibi
  • User Stats

    109
    Posts
    75
    Votes
    Henry LiChi
    • Developer
    • Long Beach, CA
    75
    Votes |
    109
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    Henry LiChi
    • Developer
    • Long Beach, CA
    Replied

    Value add to me are items that will actually raise rent or lower expenses that ultimately raise the NOI.

    - Reducing utility expenses through either separating meters or if you can’t, convert all fixtures to low flow. Low flow toilets, shower heads, aerators for both kitchen and bathroom faucet. Change all light bulbs in common area to LED.
    - Better property management
    - Communal laundry for additional income
    - Renovating common areas
    - Rehabbing units as they become vacant to raise rents

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    User Stats

    1,014
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    672
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    Henri Meli
    • Investor
    • Morrisville, NC
    672
    Votes |
    1,014
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    Henri Meli
    • Investor
    • Morrisville, NC
    Replied

    If you consider as value-add, anything that lowers the expenses and add to the income (at reasonable costs)

    You could add storage area

    Paid preferred parking (depend on area)

    Billboard with ads on the property (depends on property)

    Energy efficiency /Utility efficiency (common areas/responsibility of owner)

    Coin operated beverage machines

    User Stats

    160
    Posts
    107
    Votes
    Mike Taravella
    • Rental Property Investor
    • Knoxville, TN
    107
    Votes |
    160
    Posts
    Mike Taravella
    • Rental Property Investor
    • Knoxville, TN
    Replied

    Hello Dennis Williams

    I think the previous posts about having high efficiency appliances and storage are huge value adds for a multifamily unit.

    I think partnering with local businesses to showcase a sense of community could be an interesting way to leverage the common areas, such as fruit markets, coffee tastings, or other communal activities. Could charge the business rent for the space for the event and proceeds and brings everyone together.

    User Stats

    63
    Posts
    57
    Votes
    Rod Khleif
    • Investor
    • Sarasota, FL
    57
    Votes |
    63
    Posts
    Rod Khleif
    • Investor
    • Sarasota, FL
    Replied

    @Dennis Williams

    Hi Dennis, great list you started and others have added onto. A few things I'd add to it are:

    - Pet deposits & pet rent

    - Reduce turn time

    - Add washer & dryer hookups if possible

    - Covered parking

    - Depending on the location & market; rent one unit as a short term rental

    - Reducing common area electric

    User Stats

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    Todd Dexheimer#2 Multi-Family and Apartment Investing Contributor
    • Rental Property Investor
    • St. Paul, MN
    3,648
    Votes |
    3,004
    Posts
    Todd Dexheimer#2 Multi-Family and Apartment Investing Contributor
    • Rental Property Investor
    • St. Paul, MN
    Replied

    @Dennis Williams one of the biggest value adds, especially in A and B areas will be the amenity packages. People will pay more for the bells and whistles. The bigger property you have, the easier this is to accomplish. Putting $500k in the amenities on a 500 unit complex is only $1000/unit, which is easy to justify, but $500k on a 50 unit is going to be hard to justify. 

    User Stats

    107
    Posts
    30
    Votes
    Dennis Williams
    Pro Member
    • Real Estate Agent
    • Davenport, FL
    30
    Votes |
    107
    Posts
    Dennis Williams
    Pro Member
    • Real Estate Agent
    • Davenport, FL
    Replied

    @Hadar Orkibi

    @Henry LiChi

    @Henri Meli

    @Mike Taravella

    @Rod Khleif

    @Todd Dexheimer

    Excellent value add guys.  I think this is a good start.   Thanks for being open to share a few items you feel are good value add opportunities.  If you think of anything else, feel free to add on.  The goal is to get the list big enough that it helps anyone that is looking to buy deals and may not have thought of the items listed.

  • Dennis Williams
  • User Stats

    126
    Posts
    47
    Votes
    Amy Hu
    • Investor
    • Thousand Oaks, CA
    47
    Votes |
    126
    Posts
    Amy Hu
    • Investor
    • Thousand Oaks, CA
    Replied
    Originally posted by @Henri Meli:

    If you consider as value-add, anything that lowers the expenses and add to the income (at reasonable costs)

    You could add storage area

    Paid preferred parking (depend on area)

    Billboard with ads on the property (depends on property)

    Energy efficiency /Utility efficiency (common areas/responsibility of owner)

    Coin operated beverage machines

    I'd love to find out more about the storage area. Has anyone done that?

    There's a small unit in our apartment building, no kitchen. I wonder if I could turn it into storage. If so, how?

    any suggestions would be appreciated. thanks