Building Small Multi-Family

[David Wieten]

Does anyone have experience building small multifamily properties (specifically duplexes)? Is this a common practice for individual investors?

I have looked into purchasing small multifamily for buy and hold but I am also wondering if building from scratch is an option. Obviously the success of this strategy would depend heavily on cost of the land and the cost of the build.

Thanks!

[John Warren]

@David Wieten in my market no one is building affordable housing at all. By affordable, I do not mean slums, but rents that people can afford (700-2000 a month). All of the building stock in the Chicago suburbs where I work is from the 1950's and 1960's when they built brick apartment buildings that still make great sense today. If I tried to build any of the buildings that I have purchased over the years, I couldn't build them for less than 1.5-2X what I purchased them for. 

Most of the construction these days has been for A class apartments with very, very high rents. In some suburbs, rent has been at or above $3 per square foot for quite a while. As they say, when the cranes are in the air... beware!