Help with my business model

[Ehab Shoukry]

Hi all -

I've purchased 9 SFH houses in a Class C part of Houston that primarily rents to lower income tenants. All of the houses were purchased in the $53k-ish range and are older homes with window units and galvanized plumbing. Primarily my maintenance calls have been plumbing or AC issues. My biggest repair was a busted galvanized pipe which damaged sheetrock, cabinets, etc (roughly $2k repair).

I know there are mixed reviews on lower priced homes but I was thinking I would replace all of the plumbing in my homes with PEX plumbing and move to central AC/Heat.  PEX will cost me around $1700 and Central AC/Heat is $3900 for a 3 ton Linux unit with everything included (copper, blower, furnace, etc).  

After doing both of these upgrades I estimate the value of each house will increase around $15k based on my conversation with an appraiser and then I would be able to refinance to get most of my money out.  I'm already getting around $1k to $1050 in rent the way they are and based on the income of the area, my tenants would probably only be able to pay an additional $50 a month with the new upgrades.

Do you think this is a good plan or is this prematurely jumping the gun and a wasted expense?  I recognize it would take me a year of rental income to recover my expenses for this work and I would basically do every house this way to reduce maintenance headaches.  After refinancing I would probably only be out of pocket $5k on each house.

Thanks,

Ehab