All Forum Posts by: Tony S.

I previously managed the rehab of 20 of my units. And while it's satisfying and not hard, it's time consuming. I want to focus on acquisitions and finding private money. I'm looking for someone I can trust to oversee mostly cosmetic rehabs. Ideally, I can simply send them out whenever I have a new property and they can take over the cosmetic rehab.

Also open to ideas on how multi-family investors systematize efficient rehabs on units they just purchase.

Thanks!

Tony

0 Votes

Charlotte, North Carolina

Quote from @Brennen Thompson:

Hey dude,

We recently took down a 15-unit apartment complex with the same issues... popcorn ceilings and wood panel walls. I suggest getting rid of the popcorn without thinking twice, the stuff makes a mess and no one likes it anymore. The wood panel is a much more difficult question primarily because:

1. Ripping out the wood paneling/disposing it is costly and drywall/mudding and taping for an entire complex is going to hit your rehab budget hard

2. I don't have intimate knowledge of your market and what type of finishes you can get away with

We elected to rip out the wood paneling and install drywall only because we are doing a complete re-wire as well. That said, the comps in our area, along with the cost savings of keeping the wood paneling, justified our original plan to keep and paint the wood paneling.

My best advice - check out the comps and be honest with yourself. If you can still hit the $1,045/unit number with the wood panel, it's a no brainer to paint over it for now and possibly update each unit individually as tenants move out down the road when the comps justify it

Thanks for that detailed response. I think keeping the wood panels would be justified from an economical perspective, but I always try to think whether I would rent such a unit (which is why my instinct is telling me to replace with drywall though the economics support keeping the wood panels.

1 Vote

Quote from @Chris Seveney:

Quote from @Tony S.:

Hi all,

I'm wrestling with a rehab question regarding panel walls. I'm about to purchase an 18-Unit apartment complex with full panel walls and popcorn ceiling.

What is everyone's view on panel walls? Of course it's cheaper to just paint over the panel walls and remove the popcorn ceiling (which is what I was planning to do), but now I'm wondering whether it's worth the $60,000 investment to remove all panel walls and replace with fresh drywall and fresh paint in every unit. I'm planning to keep these units long-term.

Currently each unit is 2 beds/1 bath and they rent for $600/unit. I'm planning to raise rents to $1,045/Unit after a light rehab.

Thoughts or opinions?

When you say $60k, are you saying you can get 18 units done for $60k to remove paneling and add drywall. If so that is DAMN cheap and I would be all over that to get it done. Also if you are raising rents by 40% in a down economy with rental rates starting to soften you will need to differentiate your product and keeping wall panels is not a differentiator. Just my 2 cents based on info we have

Yes, I can get all 18-units done for $60,000 (labor and material for drywall, including mudding and sanding). Paint would be separate.

0 Votes

Hi all,

I'm wrestling with a rehab question regarding panel walls. I'm about to purchase an 18-Unit apartment complex with full panel walls and popcorn ceiling.

Currently each unit is 2 beds/1 bath and they rent for $600/unit. I'm planning to raise rents to $1,045/Unit after a light rehab.

Thoughts or opinions?

1 Vote

Hey guys,

How do you automate seller-finance payments so that they auto deduct from your account every month and auto-deposit into the seller’s account?

Also, how do you generate automatic statements every month?

Any help would be greatly appreciated. Last time I did seller finance, I literally mailed a check monthly and manually generated loan statements. Now I want to do it right this time around so I don’t have to think about it (especially since I have a 25 year term on this seller finance note).

Thanks,

Tony

0 Votes

How much do you typically pay contractors for cosmetic renovations? Typically, I sub everything out and average $15,000 - $22,000 unit for full cosmetic renovations. Here, I want to delegate this job to a contractor to supervise, pay, manage subcontractors but I'm having trouble coming up with a fee.

There's 18-units for this particular project and I want to throw other units at the contractor once I purchase. Is 10% of cost reasonable? Thanks,

Tony

0 Votes

Quote from @Carolyn Yates:

@Tony S. Congratulations! Glad it worked out. How were you able to come up with that strategy? Is there someone who was able to structure it for you? Thanks!

Spoke with my CPA on strategy, and then negotiated with seller from that standpoint.

0 Votes

Quote from @Bob Willis:

@Tony S. congrats on the deal. Would you care to share on how you found it, what are your plans, etc etc...

Found it via sending direct letters of intent to a specific group of multi-family owners within my market. Plan is to purchase, renovate, and bring the rents up from $600 to $1,045 per unit.

0 Votes

Hi all,

I'm under contract to purchase an 18-unit apartment with 15 of the units on month-to-month leases.

Does anyone have experience vacating multiple apartment units occupied by month-to-month tenants in order to do full rehabs of the units? I want to be empathetic to the tenants' situations and was thinking of offering "cash for keys" as opposed to simply providing notice to vacate.

If each unit is currently rented for $600/month, how much do you think I should offer for them to vacate?

How long of a time period do you think I should offer to vacate? Is 90 days enough? Too long?

Any help, anecdotes, feedback would be greatly appreciated. Thanks,
Tony

1 Vote

Hey guys,

As a follow up, I'm now under contract for the 18-unit deal. Essentially, the seller can avoid capital gains tax up to $80,000 in capital gains annually depending on the seller's income. Here, we structured the deal in a way where the seller would receive less than $80,000 in capital gains annually from the purchase price via a seller-finance note.

Thanks again for your contributions!

2 Votes

All Forum Posts by: Tony S.

Tony S. has started 20 posts and replied 73 times.

Post: Looking for a Foreman/Project Manager in Charlotte, NC

Post: 18-Unit Rehab: Replace Panel Walls with Drywall or Just Paint?

Post: 18-Unit Rehab: Replace Panel Walls with Drywall or Just Paint?

Post: 18-Unit Rehab: Replace Panel Walls with Drywall or Just Paint?

Post: Seller-Finance Auto Payments and Statements

Post: How much to pay contractor for cosmetic renovations?

Post: Help With 18-Unit Deal

Post: Help With 18-Unit Deal

Post: How to vacate 15 month-to-month tenants for renovations?

Post: Help With 18-Unit Deal