Insider Secrets of Calculating Rehab Costs
Multifamily physical due diligence is extremely important. You gotta know what you are buying! You need an apartment inspector to determine the condition of the asset you are buying.
- Bryan Amos is a multifamily inspector & engineer. He helps buyers uncover possible rehab concerns and potential future costs when they are considering purchasing an apartment building. He is looking out for you and your investors on any potential future capital costs. Bryan creates a reliable rehab/ construction budget for you and your lender to review. Whether the transaction is a stabilized property or a value-added property, most lenders should be able to include the rehab costs into your loan.
- Again, do not pay for rehab out of monthly cash flow.
- BUT BEFORE, you engage an inspector at your INITIAL visit at the property with the listing agent, you should have a back-of-the-napkin opinion on what some of the rehab items will cost to replace or repair. Bryan gives us some initial cost breakdowns on several big ticket items like roofs, air conditioning, foundation, & sewer lines. This invaluable discussion is based on Bryan doing hundreds of inspections of apartment buildings. Listen carefully and you will learn a ton of information.