Thursday, September 14, 2006

Remake, Remodel

Back in the day, a group of eager homeowners could buy a multi-unit TIC fixer upper for a reasonable price and years later their sweat equity would pay off. That was one of the great things about TIC opportunities. People could band together, pool their resources, and over the course of a few years rehabilitate a building that had been neglected as a rental property.

Today even a four-unit building like this which has a $60,000 pest report and requires substantial foundation work under difficult space constraints costs nearly a million dollars. A friend of mine who has rehabilitated several buildings in the City said that it could cost as much as $300,000 to repair 372 Lily. For non-professionals the cost would likely be significantly higher - let's say an additional $100,000. So in this case for a total cost of $1,320,000 each owner would end up spending $330,000, not counting the carrying costs while all work was being done. Not bad in this market, but not so great either, considering the blood, sweat and tears.


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