Vandalized bank owned property - re-wiring question

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  #1  
Old 02-04-14, 08:19 PM
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Vandalized bank owned property - re-wiring question

I am looking into possibly purchasing a bank owned 4 plex building as a rental investment.

The previous owner, not being able to pay mortgage, and was evicted by the bank, now in order to salvage as much money as he/she can, as well as do as much damages to the property so the bank would inherit a mess, every window was broken, all appliances removed, water heater, air conditioning removed, tile walls and floors smashed, toilets cracked, copper pipes removed, and all copper conductors removed.

A couple of pictures.













Now, this is only ONE OUT OF FOUR units, the other three are in the same conditions.

The original wiring was done with metal conduits. Some of it are still there, some gone or ripped out. No conductors inside any of them.

So, the question is, if you have to rewire everything, will you treat this as new construction and do all new wiring? Or will you try to make sense of the network of existing metal conduits and try and use some of it?
 
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Old 02-04-14, 08:28 PM
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If the existing conduit made sense I might try to keep some of it, but am not going to waste time on a possibly inadequate design when there is so much to do.
 
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Old 02-04-14, 08:56 PM
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It looks like a skeleton of a building that will cost more than a new skeleton to finish and make usable.

What does the surrounding neighborhood look like?. - What are the rental rates for them and are the owners surviving somehow or just forced to eat the problems?

Dick
 
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Old 02-04-14, 11:10 PM
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A re-do that extensive is essentially the same as new work. If I installed the new panels where the old ones were I might try to use some of the existing pipe, where it was convenient.
 
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Old 02-05-14, 03:21 AM
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What you are seeing is standard "eviction" frustration results. I have seen it over and over. The banks will want to bring a house back to salable condition after sitting for 3 years. I still don't know how they got that full size clamshell, one piece shower out of the house

Unless you totally strip down all the walls and redo all the electrical and look at the plumbing, you will miss so much. Unless the quads are being given away, your recovery rate on rental would be way out there. Most of the homes I looked at had a minimal $30,000 to $50,000 repair requirement before they could be occupied.
 
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Old 02-05-14, 03:32 AM
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The bank is selling it as is. It's going to be an all cash deal because it's inhabitable and can't be inspected (no electrical no water).

It's going to be more than 30-50K. Four units here. It's in a nice neighborhood so even if I spend 100K (25K door) if I can get it at a price to yield a 10% cap I'll still go for it. Still working on the numbers but the DWV scares me more as that implies may be breaking concrete slab. Water supply can be all new with PEX over the attic. Electrical I think it will be too much hassle to try and reuse, I'll probably need to take down all sheetrock anyways so the existing runs should be visible.
 
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Old 02-05-14, 03:59 AM
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Before deciding to purchase the property you need to try and get a fairly firm idea of the cost to rehab and then add a significant amount for all the unseen problems that will pop up. If the numbers make sense, be prepared for a big undertaking. If the numbers are close - look elsewhere!
 
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Old 02-05-14, 06:00 AM
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Rehab

Time is money. Remember the demolition has to be finished before the repairs can begin.
 
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Old 02-05-14, 07:04 AM
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I agree this is going to be expensive. I have a rental house and had to redo some electrical over twenty years ago and it was expensive then. For us though we were lucky as the wiring was in place it just needed a new panel box and some new receptacles as the old ones were breaking apart with age.

I can't speak to the electrical like the electricians here can but agree I think you should reuse the conduit as much as possible. The panel boxes though even to my untrained eye are shot and should be replaced. You speak of concrete having to be broken for sewage lines and that can be very expensive especially if you move the electric lines too. Definite number crunching is necessary here to see exactly how much it will cost to rehab.
 
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Old 02-05-14, 07:22 AM
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I would not "buy potential" but rather expect the bank to give me the "potential" for free. In addition to the price knockdown to account for the condition of the property.

Actually I would also include an allowance (further reducing the offer) to account for the "trouble" of "time and trouble".

The bank (as well as most car dealers) don't mind giving you a discount for this or that. For me I want the discount(s) for this and that.
 
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Old 02-05-14, 08:13 AM
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if you have to rewire everything, will you treat this as new construction and do all new wiring? Or will you try to make sense of the network of existing metal conduits and try and use some of it?
You may be able to reuse conduits to areas such as living room, bedrooms and bathrooms, but I'd start new in the kitchen. The codes have changed substantially since this place was built and you'll need to meet the latest code requirements. Yes, the old panels are trash, look like Sylvania/Zinsco panels anyway. You might be able to reuse the service feeder conduits, but if the are EMT under the concrete slab, don't count on it, they are probably rusted through and collapsed. I don't see how you can even come close crunching your numbers without getting some contractors in there. This is not a DIY project for an amateur.
 
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