Last weekend I had the opportunity to tour a 228-unit multifamily property in Irving, TX. The property was purchased last year with a bridge loan and is almost one year into the renovations.
The goal of the rehab is to take the property from a Class C to a Class B property. We toured some of the classic units as well as upgraded units.
An interesting strategy the owner was implementing was an open house. After they renovate about 5 to 10 units, they hold an open house for the existing tenant base.
The tenants get to see what the new units look like and have an opportunity to move up without any transfer fees. I thought this was a good idea and a good takeaway from the tour.
Allowing the existing tenants to move to the upgraded units allows the owners to quickly vacate some existing units while leasing up the new ones with minimal friction.
It is a great strategy for any buyer considering upgrading a lot of units on a value-add deal.
