Estimating Construction Costs

[Chris Penny]

Hi, all.  Our corporation owns a house in Los Angeles near Venice and La Cienega (adjacent to the hot Culver City area).  The house was rehabbed when we bought it and then we converted the garage to a studio.  We have both rented out.  The lot is 5880 square feet.  Zoned RD2-1.  We get decent rent for it, but bought it with hard money, which we paid off.  Now my return on my money is only around 7%, and I cannot refinance because banks don't want to finance singe family homes for corporations.

I am considering tearing down both structures and putting up apartments.  My question is...how do I estimate the cost?

Added bonus is that the next door neighbor has been thinking of doing the same thing.  We might be able to partner on a deal and build something bigger.

Finally...I am unfamiliar with what kind of return on my money I can get from a newly constructed apartment building.  I assume that, if I build it, I will get into the deal a lot cheaper than if I bought it, but not sure how to approach the question.

Thanks.