Feel free to gut my investment plan :)

[James R.]

Hello all,

 I have owned a business for a while, but I am fairly new to multi family real-estate investing. I own a commercial office building with a fair amount of equity that I can leverage. My plan is to buy a already zoned lot for multi family and build a 4-plex on it. I am planning on being the subcontractor for this build as to help build equity in new units. ( I have never been a sub before, but have a fair amount of construction knowledge from previous renos)

Does anybody have any input on this plan? 

Thanks!

[Joel Owens]

Run an area analysis.

Do most 2 to 4 units in the area have separate utility that tenants pay?? If so that can be a plus as the tenants are trained to pay it instead of including in the rent.

Next see what existing building are selling for per sq ft and rent per unit levels. You want to calculate if you can buy existing buildings with good tenants already for the same or less as doing new construction.

Development can have the most things go wrong. Construction loans are by local banks and tend to be non-recourse interest only for 2 to 3 years. Whether the loan is renewable or convert to perm. will be in the covenants.

If your piece of land to build on has such an amazing location from anything else on the market then it might make sense to do it.