We renovated, but will they come?
On multifamily value add strategies and renovations that don't make sense
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We renovated, but will they come?
Welcome back!
I’m sure you’ve heard of the phrase “build it and they’ll come.”
This week’s article and topic is a play on that, because sometimes renovations don’t make mathematical sense even though they sound very luxurious. 😊
In today’s post I’ll spend some time establishing why renovations can be so lucrative, and then point to counterexamples where this logic falls apart using a datatable.
If you’re an LP, this article will explain one of the most critical components of multifamily investments - renovations, or otherwise generally referred to as value add strategies. We will also learn more about what to look out for to make sure you know how to ask the right questions.
If you’re a GP, I hope this article will resonate with how you think about whether future renovation make sense. There are circumstances where (even if you promised renovations to LPs) they no longer make sense, and it’s in the best interests of both parties to not proceed.
Let’s dive in: