6 Keys To Renovation Of Apartment Buildings

Investing in multifamily real estate can be very rewarding, but what happens if you see a building you think needs too much renovation? Will it ever work?

Here are the 7 lessons that I would love to share with you based on my experience.

No. 1 – Do your underwriting numbers

Typically the major renovations take 20 percent to 30 percent more time to complete than you think. Also, the budget should be increased by that amount.

No. 2 – Keep the staff motivated through the process

Make sure that you take care of your staff and the contractors during the renovation. Encourage them to work efficiently and with purpose of providing a great community for the residents.

No. 3 – Make sure the residents see it first

Make sure that the current residents see the major renovations first so they can visualize how the new owners are putting money and value into their community. Remember, it is their home.

No. 4 – The parking lot can be a huge win

Fixing the parking can be  a huge hit with the residents.

No. 5 – Hold contractors to their due dates of completion

Be sure that you put deadlines in the contract as the job progresses; also put penalties if the job is not finished on time. For example, $200 rebates per day from the invoice for going over the deadline.

No. 6 – Definitely take three bids

Take three bids, then ask for their “Best and Final Bid.” Then, don’t stop there. Negotiate more. Use language such as “it’s just not fitting our budget numbers.” Many contractors will come down anywhere 15% to 30% lower than their lowest bid. It’s amazing. “Ask and you shall receive,” as the saying goes.

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