Hiring Contractor Tips for Multi Family Real Estate

heat exchanger cracked just before Christmas had no heat and this thing blows so it's $28,000 that I have to spend on this you if somebody is ripping you off or not doing their work properly you let them go I went to probably like three or four contractors and kwc that didn't work out and if people were gouging me and then I said hey you do this unit down you do another unit they're competing I've got one more unit whoever finishes first at my price you get the next one you have this be strategic about how to raise this like 2.5 million I raised three million dollars an extra five hundred thousand this actually dilutes the returns because you're raising more money so this is engulf press golden present is we're having these these buildings in Cambridge it's sort of sort of split up into three different areas a hasp layer is the new area Gault and Preston is the old area so what I like to do is actually buy in the older areas because the new areas will actually lift these all their parts of the city so let's walk over here so we have this building that we bought we sold the ten Plex because I couldn't race I couldn't get all the money I had to raise normally what I do wanna raise is this it's 25% is the down payment of seven million and then 10% of that of the seven million I also have to raise so it's 35% is the total raised so here's one forty-one Linwood you can see you can see the theme of all these buildings it's very similar two and a half story walk-up their two-story walk ups no elevators try to get a pitched roof and so how important is that no elevators the reason it's not the elevators the elevators is costly to maintain having the elevator the contractors it could be a decent crop it could be other elevator companies it's a monthly contract and then you have to do yearly inspections tssaa a lot so it gets expensive the main the main expense is actually not necessarily the elevators it is expensive on a monthly basis but what it is is that if there's any kind of deferred maintenance on the exterior then it gets costly I've dealt with buildings where you get water penetration on an old brick building water penetration so if you're if you're doing we call it like using a swing stage a drop so i'll doing a building over in in farmington Park where it's a nineteen built nineteen sixties or seventies and there's water penetration through the bricks so one drop like a swing stage coming down it was twenty four thousand dollars so one drop is twenty four banging another drop and all throughout the building right so what that means is that it's probably a good I think it was a half a million dollars this is a condo corporation so if I'm buying a building that has like let's say a four four storeys then I have to get a swing stage you have to get I'm not sure if I get have to get devid arms these are major construction so I'd rather avoid that so that's it is the elevators and plus if there's any kind of exterior maintenance that I have to do so something like this when I bought this all I had to do was the the balcony rail how to redo their old ones and they're rusting and I had to spend about twenty four thousand on all the balconies and I think it was about forty eight dollars a linear foot I always priced it up by uh by square footage by linear things like that and that's how I compare contractors to contractors I'm getting cold so let's just go in so this is it this is a two and a half story walk-up nothing nothing nothing too complicated in two with this on the MLS no so a gentleman an agent that owned this he's from Guelph he owned I believe four or five hundred units a super nice guy because we actually delayed on the closing so what happened was we couldn't get we couldn't get how can I raise all the money well let's take a look at the building so we did I think we did the mansard roof we did some of the siding just to spruce it up because these things I have to I didn't raise that money I what I did was just over time these couple years I saved on the in the cash flow I redid some of these the front before you this is just the entry entry points but you have to upgrade this I didn't upgrade a lot of it when I first when I first bought it what did was I did the inside units first I'd left these for about a year I could have gotten all the money up front from all my investors even for myself but what happens that if you get all that money you raise on the money you actually dilate the returns you know that's what what I'm talking about man I said if I had a raise and say 2.5 million I raised three million dollars an extra five hundred thousand this actually dilutes the returns cuz you're raising more money okay so if you have this be strategic you'll see the old part so this is if you can see this is the retiled of this the front foyer painted this stairwell we did the force but I didn't do it for the back session so you see the old back section how it looked before so that before and after let's go take a look at what I'm doing very very simple there's nothing nothing too complicated mailboxes here these are not drazzle for these are regular concrete floors but how to redo the floors repainted did this the trim work around the doors I didn't change the lights all I did was change the light bulbs just do you think the stages so on a building like this most of the mechanical will be in the basement in a larger building most mechanical stuff will be on the rooftop it's just that the water pressure it's easier for four to dropped into each and every unit I do have the right keys that I sometimes you forget what you have what you don't have no you know what I don't but I do have in one sec no let me get the right keys USA this drug was real even when you got 170 units we all know this problem of too many keys I have the five bedrooms and I can't keep track though I feel embarrassed to even imagine having 170 units guys and then all the maintenance rooms and then he's laundry all those different things right keys will be good so this is the boiler we negotiated the the purchase this building I knew the built I knew the board that was shot so boiler and the roof so this one I got cashback on clothes but it's different guys just because you got a cash back and clothes this is what we got the money but they don't want to release it out this is $130,000 but they held it for one year what that what that means is that they want this hell you operated so they kept on the separate account except if I had no access to it for one year and this little puppy the exchange the heat exchanger cracked I believe and it was it was a waterfall I'll show you this it was crazy get a I don't know if you can see that water you see that yeah all right so the heat exchanger cracked and there was there's water everywhere I don't have that for two days what happened was I believe the heat heat exchanger cracked just before Christmas I know he yeah just before after Christmas is like literally dude aya it's still running I have to keep this building and this thing blows so it's $28,000 that I have to spend on this but I had the money right it was actually no a couple more couple months oh I had a save that cash flow always make sure that you have some cash available don't spend it all don't use it for another property I don't but you know certain amount things how much things will cost so I knew that this was gonna this was this was gonna go so I kept at that for building like this size you elect at least three months okay worth of operating costs mortgage mortgage payments and things like that you have to have some type of funds available all right cuz if you get caught you can be big trouble really quickly okay cuz sometimes you just can't get thirty thousand right so if you have it great so this one it was twenty eight thousand this is a 1.2 million Btu boiler system so twenty thousand but you think about it twenty thousand it's actually not that bad for thirty two units right and each unit rent for about a thousand to about twelve hundred so it's actually about eleven now to about 1250 now so rents are coming up so I had to get that done within about two days one of my mechanical specialists here does all my buildings as you know and he'll come and inspect if I'm buying a building is from afterglow he knows all that he has all these trucks as a hey Steve gonna take a look at this building gonna be buying it how does it look all right always work with your local contractors mechanical contractors a plumber's electrician you always have a few of them readily available any tips for finding things that's hard like I go through bad contractors as well I let people go and to be honest with you if you fight if somebody is ripping you off or not doing their work properly you let them go you let them know you know you say hey you know things are not working out be respectful because sometimes their class might be high for whatever reason maybe he's just starting out of his classes high higher than another person that's been established right so you always go through your your sources and then you you work with them okay sometimes you can work with contractors so this guy's good I want to probably like three or four contractors and kwc that didn't work out and if people are gouging me okay so you know quick and you don't pay contractors because you read a comment is that some guy paid a contractor we're in the area era okay that you can see everything you can snap pictures okay so you snap a picture of video this unit and you say hey okay I'm look I've shown you it's been painted here you go here are the floors if you can't do it get somebody else to do it a neighbor you're super or somebody else another tenant from another unit to inspect it making sure that that work is done before you pay that person so never pay a person before the work is done that's very very crucial for contractors because they will pick your pocket any tips for finding like once you have a good contractor any tips for keeping them well for me I think it has become the skill so what obviously when you're scaling up when you're we have more business for them they'll stay with you all right I always thought my contractor's my main guy that you met Dan over at Hyman I give him everything first I say here it is Dan if he if he doesn't have that time he's doing another bigger project for another client that's fine go ahead I'll get somebody else right but if you have somebody good try to keep them try to keep them busy okay if you if sometimes it's too busy and you're just working out okay so here's some tips for contractors even in this unit I was having some problems with another contractor he wasn't you know doing things fast enough prices were started climbing and then I said hey you do this unit down you do another unit they're competing at that one more unit whoever finishes first at my price he get the next one right the other guy was still slow bang Dan got it right for my cameras over at Elgin I got three contractors coming at the same time okay you can say you're the owner which I you know for that insulation wouldn't see me that it's insulation I made a mistake there but that was only one contract the other two I set out in the property manager all right but I can line them up online contractors up you'll have to say hey you had ten thirty you had 11 your whatever 11:30 you can space them out and they don't see each other or I can say hey all you guys are all at the same time you're gonna come in at the same time I'm gonna walk you through it and you're gonna bid on it so you can do that or you can take one guy first right say I want this this and that they give me a quote I blacked out that uh the price right and then I photocopied he doesn't see it bang I say hey quote me on this right then you can read it you say okay this this and that now you look really smart you ask the contractor you say hey what about this what should I do about this camera how should I place it some guy says place it here some stuffs crisscross is so you don't have blind spots now you saw you now you sound a little more sophisticated you didn't know about the camera business but now you got one person to explain it to you all right so one guy walks you through it he points out everything then you go to the next one then you sound smarter the next one under the next one you can take ten in quotes if you really wanted to write and learn learn learn right so you'll have to I'm not I'm not a camera guy I'm not surveillance or whatever but you can start learning you can start getting boiler prices right but then you can tell you oh I'll be to you it's nae size and whatever they can talked about this this particular boiler so on so forth so you you go I'm talking about you're going to learn quick right exactly you always compare apples to apples right and then if you if you're doing painting right you get a professional painter I don't get professional painters does that's the lowest sort of on the totem pole of contractor list painting is the lowest but you say if you had to get a painting job you say hey painter pull me on this then you get their quote they put it on paper you go to another painter say call me on this how you and then you you can you can show them right show them what the prices are and why why why they should be justified more than the other right but let's let's let's talk about this building this building 1.2 million BTUs $28,000 these are booster pumps circulating the hot water throughout the building this is a closed it's a closed unit system we're going to heat the water up that's just that's just repeating system then you have so booster pumps they're all that copper copper pipes use the expansion tank because when you heat you have expansion because water creates gas right some people are saying that hot water tank some lady goes like dude this is uh isn't that this is one building yeah this is one building these are commercial hot water tanks run very efficiently they heat up the water very very quickly so this service is looking at the side I look dude I'm about five two on a good day okay this thing's a little bit taller than me so this distal service 32 units I used to manage to 300 unit buildings and the boiler system wasn't that much bigger though so well tuning in a building was probably about four or five times bigger than this gave me have two of them but that's the size of it okay it's almost like your regular the mess your this is your domestic hot water your regular household domestic hot water tanks alright but these are commercial grade so these will cost about three to four thousand dollars or up to five thousand dollars it shouldn't be five thousand but three to four thousand is very very normal but we always buy those try not don't rent them buy in it just saves on over the long term you're gonna do breakeven is probably like two years three years maybe max four years so buy those yeah but that is it for for something very very simple this is it use your boiler here's your electrical on that side regular panels things like that nothing complicated right and then you have your units same thing with your units nothing complicated you have your kitchens your bathrooms your living rooms your bathrooms all of that very very simple and I'll show you a renovating unit that we don't do too much but we do lift it do the appropriate renovations and then we dip that rent up yeah that's it that's it for this we'll take a look at the laundry room hey Tammy Tiny's my super young camera she's my super I always always hire somebody in the building that does all the work for me they're usually accessible and again I don't pay them I don't pay them minimum wage I pay them 20 bucks an hour you here though here the washing there's a laundry area the washing machines and the dryers [Music]

Channel: Matt McKeever

Views: 21,482

Rating: 4.9650655 out of 5

Keywords: First Large Multi Family Real Estate Rental, Kasey Wong, Real Estate Rental, Large Multi Family Real Estate, Multi Family Real Estate, Real Estate, Family Real Estate, Multi Family, Large Multi Family, income property, kitchener, london ontario, ontario, matt mckeever, rein, don campbell, grant cardone, 10plex, rental, tips, buying real estate, Hiring Contractors, Hiring Contractors Tips, Contractors Tips, Contractor Tips, kasey wong real estate

Id: ti-wp1C-vgA

Length: 17min 44sec (1064 seconds)

Published: Fri Feb 01 2019