Galvanized and Cast Iron Repiping in Apartment Buildings: Budgeting the Work
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Many older apartment buildings still have galvanized steel water supply pipes or cast iron drain and waste pipes. Both can last decades, and then both start to fail. Galvanized supply lines corrode from the inside, so flow drops and rust reaches the faucets. Cast iron drains crack, scale and collect blockages. A repipe, which replaces these lines, is a large capital project, because the plumbing runs inside walls, floors and ceilings that residents live behind.
This guide explains how to tell whether a building needs repiping, how to price it per unit and how to show the cost to investors without guessing at what is behind the walls.
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How do you know which pipe you have?
Galvanized supply pipe is a gray steel pipe that often shows rust-colored water and low flow at the far end of a building. Cast iron drains are heavy, dark pipes, often with a lead-and-oakum joint or a hub-and-spigot joint, and they often show slow drains, sewer smells and repeated clogs. The plumber can confirm the material by cutting a small access panel, which is a cost to add to the inspection.
Ask the property's plumber for a written repair history: leak calls, drain calls and water shut-offs by unit, for at least the last three years. A pattern of calls on the same stack is more useful than any single bid.
What does a repipe include?
- Supply lines: new copper, PEX or another approved material from the water meter to each fixture. Most projects also replace the shut-off valves.
- Drain lines: new PVC or cast iron replacements for the stacks and the branch lines, which is often more work than the supply.
- Access and finish: opening walls and ceilings, then patching, painting and replacing tile or cabinets that come off.
- Permits and inspections: plumbing permits and rough-in and final inspections, which vary by city.
How do you price it?
Ask for bids per unit and for the whole building. Each bid should list the access work, the supply and drain materials, the labor by floor, the permit fees and the inspections. Ask how many units the plumber can do in a week, because that sets the schedule and the cost of the phased disruption.
Add a contingency. A repipe almost always finds damage behind a wall, such as rotted subfloor or a leak that the old line hid. Many sponsors use 10 to 20 percent for a building with a long repair history. Set the number with your inspector, not with a rule of thumb alone.
Hypothetical example
These figures are made up for illustration. Use your own bids and inspection.
A 48-unit, two-story building has galvanized supply lines and cast iron drains. The camera inspection shows the drain stacks are cracked in four locations. The plumber bids $7,500 per unit for the full repipe, which is $360,000 for the building. The owner adds a 15 percent contingency, or $54,000, and plans the work over eight weeks, six units at a time.
| Item | Amount |
|---|---|
| Repipe bid (48 units at $7,500) | $360,000 |
| Contingency at 15 percent | $54,000 |
| Total capital budget | $414,000 |
| Per unit, including contingency (made up) | about $8,625 |
The owner should not show investors the contingency as spent. It stays in the capital plan until the plumber finds the damage, and any unused part returns to the reserve.
What should you check before you commit?
- The camera report for the drains and the pressure test for the supply, with photos saved in the deal's records.
- Whether the lender requires a reserve or a specific scope for the work.
- The plumbing permit and its inspection schedule, and the local rules for working with occupied units.
- How residents will get water and a bathroom during each phase, and how you will notify them under the lease.
- Lead and asbestos checks before any demolition in an older building. The asbestos survey guide covers that step.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5 or more units under Rule 506(b) or 506(c). The deal's budget shows the repipe as a capital item, so investors see the cost, the contingency and the timeline. DoorRaise does not choose plumbers or inspect pipes. Setup is $1,500 (non-refundable), and the administration fee is $5,000 a year from closing.
Start with a sponsor page or see the fees.
FAQ
Can a repipe be done one unit at a time?
Often yes, and that is usually the way to keep residents in place. Each unit still needs its own access work, so the schedule will be longer than a single-day job.
Is a repipe a repair or a capital expense?
Usually a capital improvement when it replaces a major system. Ask your CPA how the work and the contingency are treated for your entity and your deal.
Does a water leak claim fix the pipes?
It can cover damage from a covered event, but it rarely pays for replacing old pipe. Check the policy and the claim with your insurance broker.
Should I reserve for a repipe if the pipes still work?
If the camera shows corrosion or cracks, yes. Build the reserve from the inspection, and revisit it after each year of repair calls.
Sources
- Apartment property due diligence and inspections, for the condition review.
- Aluminum wiring and polybutylene in old apartment buildings, for the other old-system risks to check together.
- Capital expenditures vs. operating expenses in apartments, for how to classify the work.
- Example figures are hypothetical. No plumbing price or code rule is cited here. Check local plumbing permit rules with your city.
This article is general information, not legal, tax or investment advice. Talk to a securities attorney and a CPA about your deal. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.