“Underdevelopment is lack of maintenance.” Lucero Issac

A few years ago, I had a client with a 14 unit building in Gardena. He was refinancing and the lender was doing an inspection of the units. As it turned out, none of the heaters worked in any of the units. The owner was unaware, since in the years that he had owned the building, no one had called about the heaters. The tenants did not use heaters and were generally wary of apartment heaters, so the didn’t mind. The lender, however, did mind and the building owner spent thousands of dollars replacing the heaters in all the units.

YEARLY CHECK It is a good idea to have your heaters checked annually, not only to avoid a major expense, such as my client had, but also to make sure the units are safe. They often will require a new filter or maybe a switch is not working, but it can be something very dangerous like a gas leak which could lead to a very bad situation for your tenants safety, as well as your building.

SELLING OR REFINANCING Along with potential dangers, you could incur an added expense if you need to replace some or all of your heaters at the same time. This could affect your appraisal price or cause you to credit your potential buyer if you are selling the building. Good maintenance is usually less expensive than replacement for most things, from cars to air conditioners and sometimes a warranty can be purchased which you could probably transfer to a new owner if you are selling.

A GOOD LOOK In the case of my client, he maintained his building well, but never thought about heaters because he was never asked. It is a good practice when you turn over a unit, to clean and paint as required, but also to make sure all the things in the unit such as refrigerators, air conditioners and microwaves are in good working order. It is also a good idea to check the toilets, showers, sinks and plumbing in general. Tenants often don’t worry about leaky faucets, because they are generally not paying the water bills, and may not want to “bother” the owners. Leaky showers and toilets can increase your water bill every month and can negatively affect the NET OPERATING INCOME if there are several leaks.

“It’s not whether you get knocked down, it’s whether you get up.” Vince Lombardi

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business or you may want to move into a more passive real estate investment, such as a triple net or a DSL.. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.

We look forward to a prosperous 2025 and we look forward to be of any help we can to buyers and sellers of multi unit properties.