Underwriting new construction apartment community

[Nico Salgado]

Hey everyone,

Anyone familiar with the process of underwriting a new construction project for an apartment building? I am stuck on offer price and building costs. Do I need architectural plans to get cost of construction or is there a cost per sq. Ft I can use as a guide? I live in Long Beach NY. 

Thanks!

Nico

[Greg Dickerson]

@Nico Salgado. What are you trying to accomplish? Buying land to build? If so there are a lot of things to take into consideration. 

First you need to do a quick feasibility exercise to determine if the project will work financially.  

Check with the city or county planning and zoning department to get an idea of what you can build and what is required for all approvals including site plan and building permits, proffers, water/sewer tap fees, bonding requirements, inspections and CO process and time frame for all approvals.

You also need to check with the utility companies and get an idea of availability and cost estimates from them for water, sewer, power, gas, cable, installation and connection requirements, tap fees, hookup charges, transformer location and relocation, power line and power pole relocation issues. Check to see if you have to install any manholes, fire hydrants, curb, gutter, sidewalks, street signs, street lighting any specific street design or access requirements, Check DOT requirements for access, stop lights and permits, traffic studies, DWQ requirements for permits, permit fees and time frames.

Once you have an idea of what you can build and what is required in terms of permitting and infrastructure you want to talk to some civil engineers and commercial general contractors that do the type of projects and build the type of buildings you want to build so you can get an idea of costs, time frame and requirements.

This is a broad overview of the process and your civil engineer can handle all of this but it's good for you to know exactly what's required.