Pre-Purchase Multifamily Renovation Assessment

Go beyond the standard building inspection. Evaluate: roof condition and remaining life (get on the roof, do not rely on drone photos), plumbing system age and material (galvanized, CPVC, PEX, cast iron), electrical panel capacity and wiring type (aluminum vs. copper), HVAC equipment age and efficiency, building envelope (siding, windows, weatherproofing), foundation and structural elements, unit interiors (sample 20-30% of units across all floor plans), and common areas. Each system needs a remaining-life estimate and replacement cost projection.

Build a 5-year and 10-year CapEx budget based on inspection findings. Roof replacement: $4-$8 per square foot ($200,000-$500,000 for a 100-unit property). Full repipe: $3,500-$6,500 per unit. HVAC replacement: $3,000-$6,000 per unit for PTAC/split systems. Parking lot resurfacing: $2-$4 per square foot. Unit renovations: $5,000-$35,000 per unit depending on scope. Your CapEx estimate directly impacts your offer price — every dollar of deferred maintenance reduces acquisition value.

Lenders typically require $250-$500 per unit annually in replacement reserves. For value-add acquisitions, the first 3-5 years require significantly more — budget $1,000-$2,500 per unit annually for properties with deferred maintenance. Structure your capital stack to fund renovations from a combination of acquisition financing, bridge loan proceeds, and operating cash flow. Underfunded reserves are the leading cause of failed value-add business plans.

Foundation movement requiring structural remediation ($50,000-$200,000+). Aluminum wiring (insurance carriers decline coverage or require full rewire). Cast iron waste lines in pre-1975 buildings (bellied or collapsed sections require excavation). Polybutylene supply lines (class-action settlement material, many insurers refuse coverage). Chinese drywall (2001-2009 construction). Asbestos in floor tile, pipe insulation, or popcorn ceilings (abatement costs $5-$25 per square foot). Any single item can turn a 15% IRR into a loss.

Tell Projects provides detailed pre-purchase renovation assessments for multifamily investors. Our team walks the property with your acquisition group, evaluates every major system, and delivers a line-item renovation budget within 5 business days. We assess 50+ properties per year across the Houston metro — our cost database reflects real subcontractor pricing, not national averages. The assessment fee is credited toward renovation contracts if you close on the property.