Debate opinions

[Joseph Henry]

My friend and I are having this debate. He has a 4plex under contract in Macon, Ga, the outside looks amazing, and the price he has it under contract for almost ensures that it'll cash flow as soon as he moves in (he's house hacking and one of the units is currently vacant). The debate we're having is that all the units need to be renovated and the appliances need to be upgraded. The walls are plaster, the ceiling in one of the kitchens is tile, carpet needs to be torn up and replaced, really the units are just all around dingy. I'm trying to convince him to take time to measure out everything and compile a list of the materials and appliances now before we move in and start renovating before he actually purchases the property. He's telling me that it's fine and he'll just make the list and price check when we move in and get ready to renovate, I'm interested to know your opinions.   

[Allen Hayes]

@Rosston Smith / @Joseph Henry---The Due Diligence Period has already ended.

Good luck with your remodeling.  I hope you guesstimated right on your upgrades.  To me the debate would come down to your experience with DIY work.

I've got a 4-plex that is similar to what you described, 4 good sized units with decent layouts, just haven't been updated in 10-15 years with minimum work done on turns by the previous owner. Because I'd done renovations on a single family home of almost the same sqft a year earlier I still knew the ball park for what I'd spend on different rooms.  If you aren't experienced at DIY or have extremely tight margins, probably should get some pretty detailed estimates just to make sure you're not about to go in over your head.

One thing to consider too is bulk purchase of construction materials.  I don't know your situation regarding capital, cash flow or storage but you might consider purchasing some of the required materials all at once.  For instance, if you know you're using the same vanity and ceiling fans and light fixtures, write the list down and submit it to the pro services desk and ask for a discount.  Lowe's has a minimum of $2,500, not sure what Home Depots is. I wouldn't bother with the kitchen cabinets because off the shelf kitchen cabinets are cheap enough and so bulky to store that the discount is going to be hardly worth the storage and capital costs. I've got a 20plex that I'm going to upgrade as they turn and I plan to buy things in 5's to get a decent mix of savings without tying up a stupid amount of capital in inventory that I have to store (and risk damages to).