All Forum Posts by: Kevin Brenner

Just taking a quick minute to follow up on this thread.  Below is the electrical work completed: 

1. Replaced old fuse box/glass fuses with modern breaker box 

2. Installed GFCI/AFCI outlets where required/applicable

3. Installed all bathroom/living room/kitchen light fixtures

4. Wired additional living room light fixture

5. Installed NEC required disconnect on exterior of building near meters 

6. Installed new hardwired smoke/CO2 detectors IAW NEC

Labor: $1935.00

Materials: $241.00

Total: $2176.00

This job ran me a little more than I wanted to spend but the outcome was totally worth it.  We pulled the permits and did this the right way.  No problems passing the inspection.  I saved about $800 by ordering the materials myself (most of which I ordered off of Amazon)! 

I will be repeating this process with each unit until the entire building's electrical is updated. Thanks for all of the input! 

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Savannah.

Purchase price: $350,000
Cash invested: $20,753

Just closed on my first 4-Plex in Savannah, GA. I found a great deal (used my VA) from a wonderful older woman who was simply looking to get out of the land-lording business (after 30 years)! The building has a ton of historic charm and I look forward to rehabbing the units to provide a better quality of life for my tenants.

What made you interested in investing in this type of deal?

I knew that the VA would allow me to purchase up to a 4-unit property costing up to $453,000 with 0% down! I prefer MFH versus SFR because I'm able to multiply my cash flow while keeping my CapEx relatively small. It's a dream come true.

How did you find this deal and how did you negotiate it?

I found this deal driving for dollars and scouring the MLS. Savannah (and the south in general) has a ton of small MFH properties. A lot of them were built in the 50's and 60's and need some TLC. I found the deal and worked with my agent to negotiate a "fair" price. In retrospect, I probably should have come down a bit based on it's current rent roll and appraisal and not future/potential rent roll. Chalk that one up to a rookie mistake.

How did you finance this deal?

VA 0% down. I bought this Quad for $3500 out of pocket!!!

How did you add value to the deal?

I rehabbed the common area, added a washer/dryer hookup to units that didn't have one already, reglazed all of the exterior windows, repainted the exterior, added functional off street parking for 4 cars, and rehabbed all of the units.

What was the outcome?

The first unit rehab is almost complete. I'm expecting to land a tenant in there paying $1200/mo by the end of December (that's a $525/mo jump from the previous tenant - and no I'm not evil, it's well within market rent)! The next rehab starts in January and I hope to have similar results in February!

I'd say that the amount of units and general size of the property will determine the scope of dillegence required.  Ken McElroy breaks down the due diligence timeline in his book "The ABCs of Real Estate Investing." He typically takes a month.  I've purchased a smaller property and had to extend beyond a month because the previous owner's paperwork was so disorganized.  Regardless. Ken's book is really great and focuses on mid to large MFH apartment complex acquisition.  Solid read.  

@Account Closed I'm definitely looking into what you mentioned in your post.  I spoke with multiple electricians and got some quotes.  I'm going to keep the older cloth wiring, but install modern panels, GFCIs, AFCIs, replace the switches, covers, and outlets where I can.  I'm also going to swap out all the lights for LED bulbs.  My target cost for all 4 units electrical is $10K.  

At the moment the tenants are not complaining about blowing fuses.  I'm going to try to get each room on it's own circuit if possible.  It should be less expensive than adding a ton of new circuits to each unit, but we will see. 

Appreciate your input. 

@Todd Dexheimer thanks for the tip. I definitely will install LED bulbs where I can.

@Todd Dexheimer from what I'm hearing from the pros Georgia has recently by law adopted the national electric code which is more stringent than previous state regulated codes. That being said, individual city inspectors will be charged with enforcing the codes. I'm curious to see how Savannah will enforce these codes considering the age of the city. Hopefully it all works out. I'll update this post when I learn more. Appreciate your input!

@Pat L. Good point. I think I will be installing AFCI and GFCI outlets, replacing switches, updating the panels, and installing some basic light fixtures. The key is to control costs. My goal is to get the entire bldg (4 units) done for less than 10K. I'm hoping I get some of that back in the appraisal! Gotta spend money to make money!

@Charley C. thanks for your input. I'm not planning on selling for 5-7 years. That being said, I'm wondering if updating the electrical panels to modern breakers will increase the appraisal value during the refinance process. I guess I will wait and find out!

@Jaysen Medhurst each unit is already individually split utility wise and has new central air. The only thing that concerns me about the old fuse boxes is the lack of grounding. This limits the amount of 3-pronged outlets available for modern tech. It's also not as safe as newer modern breakers. I guess the real thing I'm wondering is how much value will adding breaker boxes and somewhat updated grounding capability add to the entire building's bottom line? I'm not thinking buyers will care, but I could be wrong. Appreciate your response! It looks like I have a big decision to make and not a lot of time to make it.

I purchased a Quadplex in August knowing that it still ran off of original fuse boxes and was outfitted with cloth covered wiring.  I consulted with an electrician during my due diligence to ensure that this would not be a serious problem.  While they are safe, the cloth wiring only allows for a few grounds in each unit (kitchen, bath, living room).  I was thinking of replacing the fuse box with modern breakers and putting GFCI outlets in the kitchen and bathrooms according to code.  I'm worried about the inspector coming through and saying my cloth wiring is no good and I have to rewire the entire building (easily a $20K expense, maybe more).  On the other hand, I want to offer my tenants not only a safe place to live, but also a home that has enough 3 pronged outlets to serve their needs.  

Does anyone out there know if there is a happy medium between rewiring an entire Quad and grounding portions of the house to at a minimum add enough 3 pronged outlets for modern use?  I've consulted an electrician and got a quote of $2K without materials (approx another $500).  Does anyone have experience in this arena?  Thanks in advance!