Interested in Small Scale Investment Condo Building in Des Moines

[Jared Stroebele]

Does anyone in the DesMoines, IA  area have experience building investment condos? or building in general?

There are two properties that caught my eye 5590-S-Prairie-View-Dr and 5570-S-Prairie-View-Dr. I am searching for an investment property in the area (live-in if it makes a difference).  I have been looking at properties and have done research into house hacking, flips, buy-and-hold and the BRRRR combination but I have not put any attention into building.  So I guess I was hoping to be pointed to some resources and have a few questions answered.

My thoughts on a simple strategy:

The four unit seems like it would make a good investment.  If I build four units, as condos, depending on how I finance it I would sell 1 or 2 units, keep 1 to live in, and rent the other.

The two unit seems less attractive from an investment standpoint because I would want to keep both live in one and rent the other and lose the flexibility of selling units. 

What due diligence is requires when building new? (What questions should I be asking?)

How much does it cost to build a house? is there a rule of thumb for estimating to give me a quick feasibility? (Maybe an X$/sqft for Des Moines) 

How/where do I start to get actual cost estimates? (Call contractors same as rehabs? Will I need an architect to do drawings? How do I find a contractor with in house architect? is that recommended? )

What are the steps in building a property particularly condos if there are any differences? 

Where can I get financing for a project like this? (Banks, Credit Union, private money (syndication, partnerships),  specific recommendations)

Is anyone doing something similar that I could help with or shadow? 

Is there a specific book recommendation that would help bridge my knowledge gap? 

Sorry about all the questions, and thanks for taking the time to help answer them,

Jared Stroebele

[Jared Stroebele]

@Cherian Koshy

I suspected the building cost might be inflated right now.  There is a lot of building going on in the cities surrounding Des Moines and that drives up prices.  I do like the location and believe that the area will hold value and am glad to hear others share that opinion. 

I think this is going to be a question of return and to know return I need accurate numbers. So my plan of attack:

1.  Get my realtor to pull sale information of the neighborhoods surrounding, find days on market and comps.  
2. Get the Developer to give me the plans and price of building the existing units.  
3. Get a second and third opinion/estimate on the building cost.   
4. Project rental figures on the condos. (craigslist, rentometer, zillow)
5. Figure out cost of money, and loan options. (local bank and credit unions)

Any other steps to get my numbers nailed down or anything I might be forgetting? If number look good I will need to find a real estate attorney and then that starts a new process.