Multiple 4 Unit Development

[Lauryn Meadows]

I'm interested in learning more about building small multi families in my market. I appreciate any feedback. Here is my idea: Buy a large enough piece of land to handle the project I'm planning, build multiple small multi family buildings on land. From a financing perspective, I'm wondering if I can buy said land, then build a four plex on the land on one loan. Do 10 of these on 10 separate loans and have forty units when it's all said and done. I have built my primary residence using subcontractors. This allowed me to come in 80% LTV and finance 100% of the loan at the end of the day. Of course, I started with the 20% start up costs but was reimbursed that at the end. This was with a local bank on a 20 year note.

I’m in a rural market where income is below the national average. There are a lot of slumlords in my area. We’ve done value-add to this point and have not had problems filling our properties with qualified tenants.

There is another investor building small SFH in clusters (basically square boxes-nothing fancy but new) and renting them out about $100 above market rent.

Now, here are my questions..

Is there a residential fannie/ Freddie loan that can get this done? If I can get a 30 year loan to increase cash flow that’d be great.

What census data should I be looking at for developments? What are long term pros and cons?

Could it be that people really want a nice place to rent but there just aren’t nice (by nice I mean C and B class properties) to rent?

What am I overlooking?

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We’ll financially be ready to start another project in June and I’d like to keep the ball rolling. In the mean time I do have mailers for small to medium sized multis going out.

Note: I know I’ll need a strong construction SOW and land costs to figure costs, value, cash flow, etc