All Forum Posts by: Ki Lee

Thanks, everyone.

This has been helpful.  More than just the financials, I see the importance of providing a safe environment for tenants.  It's impossible to make anything 100% safe, but this seems like something that can and should be done by landlords to mitigate tenant risks.  My partner and I decided to get the panels replaced to proper, code compliant panels.

Ken, We did negotiate a reduction of large sum from the initially agreed price, so a further reduction will likely blow up the deal.  We will most likely bite the bullet and change them out. 

Thanks, @Caleb Heimsoth.  Appreciate your concern.  My partner and I have had rental properties for the past 10 years.

I have a 36-unit property under contract in Columbus, OH.  It's built in 1963 and has the old Federal Pacific electric panels.  The inspector said they present some fire hazard and some insurance carriers will not insure them.  Google articles seem to say that they are fairly dangerous.  How many of you have buildings with Fed Pac Panels?  How real are the hazard/dangers with them?  Are they over-sensationalized?  Trying to find the balance between being safe and also being mindful of spending too much.  It can cost up to $50K to replace all the panels.  And being a class C apartment, I want to try to be really lean and efficient.  It looks like I can find an insurance carrier that will cover the building.  Do you think that I can get by without replacing the panels?  Or is this a huge time bomb waiting to explode?  Millions of these have been installed from the 60's to the 90's and surely we don't have buildings burning down left and right?

@Michael Reilman, No I do not have a mentor yet.  

@Stace Caseria I sold on 10/28.  the 45 days of ID is over.  I did identify the 3 properties.  This subject property is one of the 3.

@Bryan Mitchell It is Columbus, Ohio.  I should've clarified that.  Thank you.

Columbus apartment investors,

I've had a couple small rentals for the past ten years, but now sold both of them and am in the process of doing the 1031 exchange into apartment complexes in Columbus.  Over the past 6 months, I've read just about everything that I can get my hands on for apartment investing, listened to hundreds of podcast, talked to a bunch of brokers, PMs, and reached out to many people in the BP community.  I've looked at a ton of deals, and not many seemed to pencil out.  I came across one deal that has great potential in a good area, but is also requires a decent amount of rehab and is a bit risky. 

I feel like I have the fundamental knowledge of underwriting and evaluating the deal, but I've love to talk to a seasoned pro and get their opinion on this deal where they have more experience to see beyond the obvious and help me better analyze this asset.

If you'd like to help out a fellow apartment investor with your experience and wisdom, please DM me.

Thanks in advance.

Ki Lee

Hello BP,

I asked a similar question before, but let me clarify.  When buying apartments....

Zoning reports - Is this always required? I've read that in some states like NJ, it's required for all commercial transactions.  I'm talking about other states.  This is for a mixed-use property with MF apartments and a small commercial space.  What is the cost that one can expect to pay?

Phase I environmental inspection - I see a wide range of opinions here.  Do I always need it?  Or if the subject property is close to gas station/self storage/cleaners/car wash/other concerning neighbors?  And what constitutes "close proximity?"  What if the gas station is like 2 blocks away? 1/2 mile?  1 mile?  Does the phase I include water quality testing for lead and other impurities?  How about mold in the building?  How much can one expect to pay for this kind of inspection for a 20 year old apartment, single building, 20-40 units?

Thank you.

Hey BP,

For Acquiring apartments, is it always required or strongly recommend to get ALTA survey and phase 1 environmental inspection?  

The subject property is mixed use property- 30~ units and somewhat small commercial space on the first floor. I underwrote it where it pencils out even if the commercial space brings in zero revenue, so any hiccup with the commercial space wouldn’t be a disaster.

I want to be thorough in doing due diligence, but also don’t want to spends tens of thousands of dollars if unnecessary.

thanks!