First potential deal needs expensive value adds

[Darius Lipsey]

Any advice on adding value to a multi family that's technically move in ready, but being underutilized? Considering house hacking a small multifamily that is currently fully occupied with month to month tenants. Financing is already in place and with very conservative numbers it cash flows, even buying at asking price. The current tenants in place are fairly low quality, but have been there consistently for some time and don't want to immediately leave. The rents are at market for what the place is, but I think there is a lot of value that could be added over time to change attract better quality tenants while increasing rents. The value adds would cost quite a bit of capital in time, effort, and cash. Considering I'm a new investor undertaking this seems really huge and I'm being told by other locals that it's very risky. I don't want to bite off more than I can chew, but at the same time I'm very ambitious and I'm not really scared to dive in head first. I still don't want to do anything stupid that could potentially take me out of the game before I even get started. The property is in a pretty desirable area I'd say a low B quality area and currently a C property mostly because of age lack of amenities. Thoughts?

[Chris Jensen]

One approach would be to decide what type of renter you want and let that drive your decisions. If your ideal renter is willing to pay more for certain features or upgrades, then those upgrades would be the focus (as much as feasible). Even if it takes a bit of time, having your ideal tenant at your preferred rent should pay off long term. - Chris.