Old homes and old plumbing

[Kristofer Kretsch]

Does anyone invest in and manage homes that have old or antiquated plumbing systems?  Many of the 2-4 multi-family homes in my area have cast iron drain/waste pipe and galvanized water supply pipe.  It's not uncommon to see rust weeping from a CI plumbing stack elbow or galvanized steel water lines flowing at a trickle during an open house.  Given that these are both big potential cap expenditures that could come due in the first few years (or worse if left unaddressed), how are you all estimating, planning, and negotiating the purchase price based on plumbing issues.  

For example, I know CI plumbing stack replacement is not necessarily uncommon, but it would seem to require several weeks where the property was vacant for the plumbers to remove, install and reconnect the waste lines in a 3-story multi.  How do you go about planning for such work?  I figure I would need a vacant property, and thus I would need the leases to align so I could end the tenancy or I'd have to pay my tenants for alternative living arrangements.  If I wait for the leases to end this could take at least one rent cycle since the leases don't currently align.  So the work would be maybe two years out, but what if the replacement couldn't wait?  How long can emergency repairs hold?  I looked at a property recently that had this problem.  I missed out on making an offer before another was accepted (it's a hot market).  2 of 3 units were rented on long term lease and the last rented month by month.  It really got me thinking how I would do it.  I still think the property was a good deal as it had good bones, was otherwise well maintained, and in good area of my city.  By my estimates it would also cash flow positive with more than enough to also cover the maintenance and long term cap ex.  

I know everything "depends", but I'm specifically trying to keep things non-specific, so we can talk more about thought process than analyzing this specific deal.  I would have made and offer, but I was too slow.  So now I have more time to think about this problem for the next one.

I would also love to hear your own experiences with old or antiquated plumbing and how it affected your rentals or your decision to invest.