Building a fourplex

[Kyle Bethune]

Good morning all, I have a .5 acre piece of property zoned residential. It has an old house that I keep rented, but the property has negative cash flow. My question is would I be wise to clear the land and have a fourplex built? I am thinking 4 2/1 units. In my area I should be able to fetch $800 per. What is involved in this that I might be missing? Any thoughts are welcome and appreciated.

[Justin Fox]

Your best friend better be the contractor AND you need to be prepared to sweat, a lot.  Make it plain as possible: hip roof, hardie siding and no pitches, peaks or dormers and no crown molding.  I would spend the extra money on foam insulation in the rafters, keeps things very energy efficient and only put insulated batting in the exterior walls.  

 You'll need to do some things yourself to save on cash.  The easiest things to do are: Exterior painting, Interior painting and staining/sealing the concrete on the first floor.  You'll need to get a contractor you can work with well and that will work around you.  Stain and seal the floors right after the electrical and plumbing and insulation are in.  Get extra house wrap and use that to cover the floors while they do the sheetrock/mud/texture.  Spray the trim/cabinets with oil based paint.  I would spray all the base boards, doors and jambs before they get put in by the trim guy and just touch up.  You can go to sherwin williams and get a pro account having rental property and get a discount on quality paint.  I would just use the $16/gallon interior paint from walmart for the interior walls.  Use Sherwin Williams Duration exterior paint.

You'll have to work to find a contractor that will be fine with you doing some of the work.  Most of them aren't used to clients trying to be cheap as possible.

Don't skimp on the foundation.  If the property is real wet, tell the contractor you want the top of the slab 2' above the road.  Dirt is cheap and you can't add more later down the road.

Good luck!  If you do actually break ground I would love to hear about the experience.  PM's of the progress would be awesome.

Justin

[Matt Motil]

You need to make sure it's zoned multi-family, not just residential. If it's not, you're going to have to go through the rezoning process. After that is completed, you will need building plans drawn up by an architect and submitted to your local building department for review and approval. Once approved, you're ready to break ground on demolishing the existing structure and building the new building. 

If you have little to no experience in construction, you're going to need to hire a contractor that can handle it for you, otherwise good luck getting a lender to give you the cash you need to build. 

[Jarod Hall]

I agree, one of the first things to do would be to check the zoning. Another good first step would be talking to a local builder to see how much a building like that would cost in your area, then add 20%. See if you rents would cover the loan on that cost. I know that in my area $800 a month would not cover the cost of construction.  

[Justin Fox]

Your best friend better be the contractor AND you need to be prepared to sweat, a lot.  Make it plain as possible: hip roof, hardie siding and no pitches, peaks or dormers and no crown molding.  I would spend the extra money on foam insulation in the rafters, keeps things very energy efficient and only put insulated batting in the exterior walls.  

 You'll need to do some things yourself to save on cash.  The easiest things to do are: Exterior painting, Interior painting and staining/sealing the concrete on the first floor.  You'll need to get a contractor you can work with well and that will work around you.  Stain and seal the floors right after the electrical and plumbing and insulation are in.  Get extra house wrap and use that to cover the floors while they do the sheetrock/mud/texture.  Spray the trim/cabinets with oil based paint.  I would spray all the base boards, doors and jambs before they get put in by the trim guy and just touch up.  You can go to sherwin williams and get a pro account having rental property and get a discount on quality paint.  I would just use the $16/gallon interior paint from walmart for the interior walls.  Use Sherwin Williams Duration exterior paint.

You'll have to work to find a contractor that will be fine with you doing some of the work.  Most of them aren't used to clients trying to be cheap as possible.

Don't skimp on the foundation.  If the property is real wet, tell the contractor you want the top of the slab 2' above the road.  Dirt is cheap and you can't add more later down the road.

Good luck!  If you do actually break ground I would love to hear about the experience.  PM's of the progress would be awesome.

Justin