Browse Tag: Renovation

Recipes For Two $10K Multifamily Amenity Projects

Apartment Building with 4 Entrances USA

Adding value to multifamily property without adding staggering cost is a real trick. Investing in the right amenity upgrades can make the difference between struggling to rent out vs. setting up a waiting list for a very in-demand apartment development.

Brokers and property managers are constantly taking the pulse of the renting public, working their relationships with tenants into a deep understanding of what amenities are in demand and what’s ho-hum for the market. They’ve got the human intelligence that needs to be put together with the numbers that add up to an amenity paroject that makes all the difference. When market knowledge meets smart investing, the value-add is underway.

Low Tech Can Mean High Profit

Catching my eye this morning is this month’s post from Tom Brophy and Royce Monroe of ABI Multifamily, Having noticed that high-tech, millennial-pleasing amenities such as Wi-Fi come at a high cost, the writers aim instead at lower-tech projects that bring substance and lifestyle together — as well as the odd shipping container.

Setting out terms of the projects first, the idea is to use $10,000 to best effect in creating multifamily amenities.  The two projects: onsite storage units in a shipping container and a dog park.

The Container 

Enter the highly-stylized, adaptive re-use, multi-purpose shipping container! You’ve probably read that developers have repurposed shipping containers into housing, but what about storage? It’s portable, therefore no building permits, it’s structurally sound and better yet, you can store it on-site. There are quite a few companies out there which will pre-fabricate and drop-ship your storage facility to your location although it can be pricey.

For those a bit more enterprising and want to customize the storage units, below you will find a line-item breakdown to create five (5) separate storage units out of one shipping container. Prices include labor:

Costs
20’ Container + Drop Ship: $3,000
(5) Roll-up Doors: $3,000
Internal Dividers/Solar Electric w Backup: $1,000
Paint (local artist to add value): $2,000
Contingency: $1,000
TOTAL: $10,000

Rent
Gross Potential Rent per Unit: $65/unit (similarly sized off-site storage units rent for $56/unit/month)
Gross Potential Rent per Month: $325
Gross Potential Rent per Year: $3,900

Return on Investment (ROI)
Number of Years: 2.25 years
Value Increase (based on 6% CAP): $65,000

The Dog Park

Now that the creative juices are flowing, check out the second $10K project, a dog park, complete with cost and appreciation breakdown, at this link.

Standard disclaimer: Take nothing you read here at The Source as legal, accounting, or development advice!

(Photo credit: Wikipedia)

EPA Lead Paint Rulemaking: Delayed Three Years

Environmental Protection Agency SealThe Environmental Protection Agency has further delayed its plans to propose and then finalize a Lead Renovation Repair and Painting (LRRP) rule for potential lead-based paint hazards in commercial and public buildings.

By Dec. 31, 2012:  EPA will announce a public hearing to gather info on renovation activities and possible lead hazards in commercial buildings, and will hold the public meeting by July 31, 2013.

NAR’s efforts thus far, through letters to EPA and oversight from the Hill, have resulted in a significant delay in EPA’s issuance of new regulations — particularly because NAR has stressed the point that the agency lacks data on the nature and extent of lead-based paint hazards unique to commercial buildings.  EPA had been under a deadline to issue a proposed LRRP rule for exterior commercial renovations by June 15, 2012.  With a new settlement agreement, EPA has delayed issuance of a proposed LRRP commercial by nearly 3 years – until July 1, 2015.  And, any final rule with regulatory impact is not expected for well over 4 years – until Dec. 31, 2016.

A few other points are noteworthy from this Settlement Agreement:

  • Previously, EPA had been on two separate paths that would have bifurcated LRRP commercial rules for exterior versus interior building renovations.  Under the latest Settlement Agreement, the exterior and interior renovations rules are now on the same regulatory deadlines.
  • To date – and as allowed by the Toxic Substances Control Act (TSCA) – EPA said it would consider LRRP Rules for commercial and public buildings regardless of the date of their construction.  In contrast, TSCA and EPA residential LRRP rules are focused on pre-1978 “target housing.”  It now appears that EPA is operating under the same pre-1978 cut-off for public and commercial buildings as well.  NAR and our coalition partners have argued that – assuming any commercial LRRP Rules are appropriate at all – the pre-1978 cut-off for “target housing” should also apply to commercial buildings.  We will be following up to confirm whether EPA has, indeed, changed course and decided to restrict the scope of any possible LRRP commercial rule to pre-1978 structures (as it has done for “target housing”).
  • Under TSCA, EPA is required to first study and report to Congress on lead-based paint hazards in commercial buildings before it issues any new LRRP rule for those structures.  It still has not done so, and the Settlement Agreement is silent on this subject.  Assuming EPA continues down the path to develop new regulations, we will continue to press EPA to meet the statutory “report and study” requirement prior to EPA’s issuance of any proposed LRRP commercial rule.
  • Paragraph 2 states that, unless EPA concludes that “renovation activities in pre-1978 public and commercial buildings do not create a lead-based paint hazard,” EPA will continue to develop regulations in this arena.  EPA sets forth a process for it to gather information regarding any “hazard” determination:
  • By Aug. 29, 2014:  EPA will have completed the oversight process required by the Small Business Regulatory Enforcement Fairness Act (SBREFA), including the convening of an SBAR panel.
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