This lovely brick multi-family is the twin of the property we sold 2 weeks ago (19750 Marx). Both are classic RealT bread-and-butter properties, acquired at a good price and structured to offer stable rents month after month. Built in 1956, this multi-family has 16 fully-rented units and 18 parking spaces. As you can see on the map, this property is located close to Butler Playfield and Farwell Field parks, which increases security and quality of life for our tenants.
However, we expect the rental income for this property to be significantly higher than for 19750 Marx because we have already increased the rent for some tenants! In addition, the rents for this property are currently below market for some units. We expect to increase those rents while retaining the same tenants, just as we are doing for its twin.
The seller owned a construction company and invested more than $100,000 into all the large structures of the building, as well as the mechanical room, which means that the building is in excellent fundamental condition. To this, we will be adding $25,000 in renovations of our own. Due to our concentration of properties in Detroit, we have been able to build a dependable team of competent, experienced handymen, and this strategy has allowed us to save $3,610 on the cost of the upcoming renovations, which is more than 10% of the budget for a property of this size.
The reserved $25,000 is to be used as follows:
- $20,000: Exterior & Common Area
- Exterior: Stabilize chipping and peeling paint on all guttering, downspouts, fascia, soffits and trim
- Remove deteriorated glaze caulking on window frames and install new caulk
- Backfill depressions in alley and lot and tamper / prep for asphalt and seal coat / stripes and new signage
- $2,250: Landscaping in Courtyard and Backfill Depressions in Driveway/Alley and Parking Lot
- $2,750: Refresh units 7, 13, 15, 16
We feel confident that these renovations will have a perceived value well over $25,000 for our current and future tenants.