All Forum Posts by: Russell W.

Agreed with Johann. No issue with the way they’re set up, but ensure each furnace is pulling return air from it’s associated apartment, not from one common space, and certainly not a non-conditioned space. 

Although I don't know how it would affect it, you should contact your insurance agent to see how you would insure the buildings and if they'd be under the same policy or two different policies. I imagine it would have some cost implications. Food for thought.

A few questions you should ask yourself:

-How much do you trust the seller?

-How familiar are you personally with building components to make a determination on the condition / age?

-Is a few hundred dollars for a professional home inspection not worth it for the confirmation of what you've already been told, or for the possibility of finding serious problems?

@Tushar Shah I didn't realize that you were from Chicago when I initially read your post; I'm sure you run into a lot of the same issues many investors do here as well. I will say it is a quite unusual that there is one common furnace for 6 units. This exacerbates the problem mentioned before regarding individual unit control, as well as raises an issue of where the return air is ducted from (i.e. if there is a smoker or otherwise unpleasant smell, that will get circulated through all units).

1. I don't have experience with common hot water, so I could only provide a guess. I suggest finding out the capacity in gallons and the heat output measured in BTU's, and do some research to find out if it's sufficient. You could even ask tenants of their experience to get a undoubtedly honest review.

2. There isn't much in the way of maintenance for a hot water heater, other than two things: 1. making sure the thermostat is set at the middle heat setting (usually noted by A, B and C, with C being the hottest). Perpetually leaving a HWH at the highest temperature setting shortens the life span. The other maintenance item would be to drain the tank once a year to remove any sediment that gathers at the bottom. Both of these are things anyone can do without the help of a professional.

3. Yes it would definitely be extremely expensive to retrofit a building that size with new plumbing, even more so here in Chicago because code does not allow PEX, only copper. I would definitely use it as a negotiating tool if found during inspection. Happy to refer a plumber that changed out my old galvanized for copper in one of my buildings, just PM me.

4. The cast iron pipes are a non-issue, those would only be relevant if you had radiant heat boilers, which you already mentioned is not the case. 

5. Typical general inspector should be knowledgeable enough to provide insight into the condition of the tuckpointing. In my opinion you don't need to hire a specialist for this. If the inspector says there are some issues it may be worthwhile to have a mason provide you a quote to further leverage your negotiation.

There may be some confusion on your end as to what the systems are. You say there is one common boiler and furnace (one set for 6, another set for 2). When I see "boiler" I read that as radiant heat, whether that be hot water or steam. Did you mean there is one hot water heater and one furnace? Or are there actually two different heating systems in the building (radiant heat and forced air)? If the latter, that complicates things. To try to answer your questions:

1a. Yes, there is less maintenance by having one common system. The disadvantage of course is that you're paying for the utilities, and tenants are unable to individually control temperature in their unit.

1b. An 8 year old boiler is not old by any means. A good boiler can last 25-30 years or more (when properly maintained). Still advisable to have a HVAC tech (who is familiar with hot water/steam systems) to do an inspection. 

2. I also have buildings 100+ years old and can speak from experience. Find a way to look behind the walls, or from the basement, to determine the type/condition of the plumbing. Unless it has been retrofitted recently you certainly have galvanized plumbing. At some time in the future plan on replacing the galvanized with copper or PEX piping, as galvanized is notorious for corroding/leaking/plugging up. If it's a steam boiler then you likely have cast iron pipes, which also corrode over time. Just things to keep in mind.

3. Looks like they took care of the major ones with the roof and windows. If the building is brick, inspect the condition of the mortar joints. Tuckpointing is another major capital expenditure. 

Seems like you have the options pretty well figured out. Depends on how much you want to spend. For a house that size a heat pump would work well, but it won't be cheap. The less expensive route would be a wall furnace(s) depending on the layout of the house. You can get gas or electric, but they can be a bit of an eyesore. Another option, as you mentioned, would be electric baseboard heaters, but they are horribly inefficient and your tenants won't be too happy with the electric bill.

"that will be the tenants problem..." and it'll be your problem when you can't keep a unit occupied year to year because tenants' utility bills are so high. I can't imagine the cost to install all new baseboard electric heat throughout is going to be cheaper than replacing a furnace. True that tenants who aren't paying their own utilities don't care about how much the furnace is in use (and $ coming out of your pocket) but that should be figured into your rents. 

From my experience the electric utility company will install a new meter at no charge, so long as the infrastructure is there for it (i.e. a second panel in your case). 100A per unit is sufficient so no need to bring in additional power, but it may be worth your time to find out the condition of the wiring and consider whether or not you want to pull all new copper. 

What is the condition of the boiler? Is it actually how water or could it be steam, considering the age of the building? If it's in relatively good shape and has some life left to it, I would consider just leaving the boiler in place as your heating source. They are very efficient means of heating space, so long as your tenants aren't leaving windows open as their "thermostat". In the meantime, if you have good access to the basement and 3rd floor space as mentioned, you can have each of the two spaces ducted and install air handlers to provide AC-only. Then, at some point in the future when the boiler finally gives out, you can spend $$ to add forced air gas furnaces to the ducted systems already in place, instead of spending $$$$$ to replace a boiler. You save money now by not spending the additional money for furnaces and bringing gas piping to each location.

Lastly for the domestic hot water, since the building was originally built as a single family residence, it's going to piped accordingly. If you're wanting to split the hot water between the two spaces it's going to require adding new copper supply lines, most of which can be done from the basement for the first level, but ultimately will require the opening of some walls to take it vertical. 

Same type of thing here in Chicago, and I imagine all over the country as it was standard building practice of the times. I had to replace galvanized supply lines in one of my 4-unit buildings (three stories; one unit below grade, three above). There are companies that specialize in retrofitting old plumbing with new copper or pex- it's all they do. While they may be more expensive than just hiring your average plumber, the savings in my mind was the convenience and speed at which they did the work. 

The project took a total of 2 days, this while the building was fully occupied. I simply notified the tenants well in advance that the water would be periodically shut off during those days (this was before covid so most of the tenants weren't home during the day anyways). The contractor worked in such a way that at the end of the first day they turned the water back on so tenants still had water that evening. Inside each unit they had to cut an opening in the drywall to access the mechanical chase that brought the piping up from the basement into each individual unit. From each unit they would feed 10' sticks of copper through the opening to make the connections for the risers. Unfortunately in Chicago pex isn't allowed so it probably could have been even faster. This particular contractor also did the patching & taping of the drywall, and I painted once finished. 

So with that as the background I can say from experience that it certainly can be done, and you do not need to wait for the building to be vacant to do so. Now when I walk through potential deals I don't mind seeing galvanized plumbing, I just know I have to factor in cost to replace it at some point. That's the million dollar question- when will it plug up/start leaking/etc. 

You'd be better off installing individual systems in each unit (which then also raises the issue of piping gas to each location). The current system is almost certainly not sized to be compatible with zoning dampers, nor will that actually control the temp in each unit, rather just the amount of airflow. I've recommended this particular equipment on the forums before, and will recommend again because I like them so much, but look into Magic-Paks. They're a self contained heating & cooling unit that is ducted like a traditional system but doesn't have the additional refrigerant lines and condensing unit like traditional AC.