All Forum Posts by: Wilson Lee

I am buying a 14 unit multifamily property that has a lot of deferred maintenance. The rehab is extensive and I need to know when we refinance later that the value in the building will be high enough. How do I go about estimating the ARV of an apartment building?

Also, Where can I find data to help me make a determination?. What is a good online source for market data reports for multifamily sales in a given market area? Some of the information I am looking for is as follows:

Sales price,

Price per unit

Price per Sqft

Sales cap rate.

What is a good online source for market data reports for multifamily sales in a given market area?  Some of the information I am looking for is as follows:

Sales price,

Price per unit

Price per Sqft

Sales cap rate.

I have a LOI between the buyer and me on a multifamily building. It needs a lot of work, and there are vacant buildings just down the street.

We are looking to upgrade the HVAC, Electrical, plumbing, windows, roof and finished surfaces.  It is a lot of money to be putting into this neighborhood (+300K).   The crime and such is not as much of a concern. But the Vacant buildings make me uneasy. 

So, My question,  How many investors have successfully in renovated multifamily in the Ensley and moved rents up?

Current rents are $250 and $350 for the units at 80% occupancy.  I understand section 8 pays $400 to $550 for the size units we have.  Is there real opportunity here or is it all in my head.

We are in the preliminary part of making an offer no a 14 unit building. The buildings has window AC window units.   To bring the building up to market rents we want to improve the AC.  Window units in this area are the norm. Many of the surrounding buildings are not well kept.    Rehab cost are approaching $220,000.  However the deal is not going to workout if Rehab creeps Closer to 250,000

The building has a lot of deferred maintenance.  It is at 70% occupancy.  Rents are $250 below market compared to one of the better kept building down the street.

So,  What are some cost effective options to bring AC into the units with out blowing up the bank while still improving above window units.  

What are some other ideal cost saving areas in rehab?   We are replacing the, Siding, roof, flooring, plumbing. 1/4th of the electrical, windows, doors, Tubs, sinks, Cabinets and counter tops. 

Next time, All repairs paid for by the buyer should be done through a fully funded escrow account with the owner signing off on the scope of work and city permits.  Require the Owner to sign off on construction draws coming out of escrow to control quality.  Have the repairs written into the purchase agreement with the consequences for the sell falling apart. 

@Jim K

I though about asking for a deposit form the tenant and hire my maintenance guy.  My handyman is a retired plumber.  He is paid handyman rates for handyman jobs. I just have a habit of calling him our "plumber".  As for assigning blame.  The tenant already agreed in writing that the drains are in good working order when signing the lease.  The first cleaning was a curiosity.  Yes, the drains where cleaned with a drain jet and the plumbing is built to city code. 

Opting for a deposit would mean not fixing the drain until they can pay up.  And if this leads to eviction,  I will be paying for it out of the security deposit. (along with other damages form loss rent)

How do you as a landlord enforce your lease where a tenant is a fault for repairs and still leasing the rental?

My tenant has reported a clogged bathroom slink drain today.   We had all the drains and sewage lines cleaned 4 months ago at the tenant request at the time of move in (5 months ago) when she complained of slow drainage.   Just last month maintenance crews where on site to fix a different issue when they pulled a toy out of the bathroom sink drain.  

Our lease stats the tenant will pay for plumbing maintenance for which they are at fault.  It list out a number of items not to put down the drains.  And stats that cleaning the drains regularly is apart of the tenants responsibility from maintaining a clean and sanitary environment.   Adding this clause seem like the right thing to do when we made the lease.  But now I am at a loss as to how to enforce it.  How should we handle it? 

Option 1,  They call the plumber.

Having the tenant handle normal maintenance seems the right course of action.   I avoid having the collect payment from them. They pay for the service directly.   But I lose control of who is doing the maintenance.

Option 2, I call the plumber and then collect from my tenant.

I can choose my plumber to help control cost and quality of work. I will have to collect from the tenant. 

This tenant has paid rent on time every month except this month.  She called on the 28th of last month to say she was short on rent.  claiming medical bills for her child (single mom).  I told her I still have to send out a  legal notices and charge a late fee.

She probably can't pay for the maintenance in her current financial condition. 

I charge a eviction notice Fee equal to the court filling cost in my state pluse the cost of issueing the notice..

If they pay up before we go to court.  I recoup my filling expance.

Ok, Thanks for the advice.   I will line up some contractors to meet Monday which will give the current contractor 3 more days to show up. 

I want to cover my self in case he comes back and claims more was completed than what is currently done.  Or tries to state the cost of a line item is more than before.  Our current contract is vague when it comes to line item cost. He lumped some items into categories.  I let it slide given our successful working relationship. 

What can I document and/or do today to help protect against any false claims? 

I have worked with the same local contractor for the last 3 renovation projects.  I like his work.  But as of last week he dropped off the face of the earth.  I don't want to get rid of him, He is cheap with low overhead cost. Also, He fixes minor issues that come up with out demanding additional fees. (like staying to oversee the septic service when I was out of town)

Now, we are 2/3rds done on the current renovation.  There is 9K worth of work left on the job.  But as of 7 days ago his number started going to voice mail. I even tried calling form a friends number.  Emails are not replied too.  I mailed off a concern letter yesterday.  I have stopped by the job site a few times and left a note.  But I can't reach him and I don't know if he is OK.

I need to get this project done.  I am paying a sizable interest payment and not earning rent.  What are my options?  My contract has no terms for work stoppage or abandonment.  I still have the $9,000 needed to finish the job.  Should I open a complaint with the state licensing board?  Fire him and change the locks? Give him time?  I don't want to end up with a lien against the property. But I can't let this project slip behind schedule .