Quote from @Scott Mac:
Quote from @Ryan Terrell:
I currently have an opportunity to purchase 96 multifamily units, 16 of which are newly renovated leaving 80 that need MAJOR rehab. We are talking full gut to the studs rehab. I am a General Contractor and I am comfortable with the construction side of things, but this deal is quite a bit larger than my other investments I've made in the past. So the problems or roadblocks that come with properties of this magnitude I am unaware of.
I am looking to connect with someone, that either can affirm my thoughts and underwriting or poke holes in it, that has experience in deals of this size. We are looking to scale into larger projects so though this is the current deal I am looking at we seek to have more opportunities of this size come across our desk. With that said I am also looking for financing partners that have experience in these types of deals as well as any other people that feel like they could offer guidance. I feel like I am at the point where "you don't know what you don't know". Looking forward to any input you guys may have on the matter. Thanks
Hi Ryan,
I like the units with the skylights, those should be very popular with astonomists.
Just some rhetorical questions that come to mind.
Are these A, B, C or D renters who will occupy the units when finished?
Do you know how to attract the different renter classes, unit mix, overall offering, etc.. to not overspend or underspend.
Can you get supplies and labor in time to finish as required by your lender.
You will most likely need to come up to current code for your area...
Will you need security onsite to keep materials from being stolen, will they need to be armed (for their own safety) (different price points here).
Have you talked to an Architect who does larger multi-family re floor plans, and etc...?
Have you talked to a leasing agent/broker about unit mix, and popular features for your intended renter class?
What will the taxes be when it's finished.
Have you talked to an electrician to make sure enough electricity is available a the drop(s)/(service lateral(s)), for the new code requirements.
A Sewer Cam inspection is always a good idea on older real estate--being there during this inspection with your own site map to make notes might be helpful...ask them how long it will take, and ask the to check if backflow prevention devices are in the sewer lines--they can prevent one units sewer backup from coming up into another unit.
Good Luck!
The current mix is heavy on the 1/1 but our intentions would be to make a couple small changes to convert a lot of them into 2's and 3's.
The units are across the street from student housing at the local University. Also a 5 minute drive to the 3 hospitals in our area.
Supplies shouldnt be an issue.
Though they look like they are in a "run down" area the damage is from a hurricane and the owner I believe has just had a enough as far as being in suit with insurance or whatever.
Code wont be a problem as far as general construction is concerned because we will be gutting everything to stud and all rough ins will be redone. Now as far as things like parking or stuff like that I don't know if anything will need to be brought to code there.
I have not spoken with an architect, I feel like the redesign is something that we can handle in my office since building new construction is what we do day in and day out. Although with that said I don't know what I don't know so if there is something an architect can help with that I'm not thinking about, please advise.
We have spoken with a couple brokers in generalities about the units but not yet anything specific as this has only been on our desk for about 72 hours at this point.
Taxes is a good question. I dont have an answer for that but it is definitely something we know to check in to. I feel like there is a way I can calculate this on my own but I am drawing a blank on where to get the information. Any Ideas?
There will be service changes made.
Sewer has been my number one concern as an item that can be detrimental to cost. My thoughts were to see about getting our numbers close to where we believe they should be for a purchase price before putting money into those inspections and then of course reevaluate the price if there are problems with the sewer.
I really appreciate the feedback. Keep it coming!
Any thoughts on who or what type of financing is desirable for a project like this?
