Need advice on construction ballpark figure (18-unit)

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Need advice on construction ballpark figure (18-unit)

Thierry Van Roy
Maastricht, The Netherlands · Member since 2013 · 131 posts · 18 votes

So this is going to sound stupid, but the situation is unique so bear with me. I have the opportunity to get an 18-unit building under option, but I may have to move fast. After winning the option bid, I can do the full inspection, so it will only cost me the inspection fees if I decide to bail.

Having said that, I need a very gross estimate ballpark figure on what it'll cost me. No replacement is necessary, I only need to get it finished.

Summary:

  • The hallway (200ft) needs to have walls put up, right now all wiring and pipes are exposed.
  • 1 floor is a construction site (3.300 sqft) with a ceiling height of 130ft (very high). There's wiring, plumbing, gas and underfloor, but no floor, no walls, no windows, no plasterwork, no nothing. That's the largest part to work on. Just imagine a large cube with everything stripped and ready to work on. Example, only imagine this with new materials, wires everywhere and a lot bigger.
  • Two units need all of the plasterwork and flooring installed (800sqft each), but at least the walls are there. (Imagine this)
  • The other 10 units are 90% done. Still needed is some finishing touches, the light fixtures, equipment installation (kitchens, baths are there, just not installed yet). I can even do this myself.

Now suppose I want everything move in ready. No grand luxury, no expensive materials. Also assume there aren't any structural errors or impossibilities in my plan (that's what the option is for).

In other words: construction costs to get a bunch of empty, habitable units.

I'm estimating about 700,000 USD in costs.

My question: is that safe to assume? Am I over-/underestimating? Is it more like 500,000 USD, perhaps? Or more like 900,000 USD? Or am I completely off? A variance of 100,000 USD is fine, but I'll get in trouble if going 200,000 USD over budget.


Depending on the ballpark figure, I can make a winnable option bid. But I have to move fast, so I don't get the luxury of doing a decent inspection now.

If you guys can help, I'll be sure to document the process should I win the bid ;-)

Also, is J Scott his book applicable to my situation? It's not exactly a house I'm working on here.

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Karen MargraveBusiness Member
Moderator
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
12y

@Thierry Van Roy There's no way anyone unfamiliar your area is going to be able to give you figures. Without knowing your building codes, exactly what work still needs to be done, costs for your area, etc. it's impossible to say. Of course we could guess, and you could end up being way over budget and having huge financial problems because of it.

Find a LOCAL builder, and get bids.

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  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    12y

    @Thierry Van Roy There's no way anyone unfamiliar your area is going to be able to give you figures. Without knowing your building codes, exactly what work still needs to be done, costs for your area, etc. it's impossible to say. Of course we could guess, and you could end up being way over budget and having huge financial problems because of it.

    Find a LOCAL builder, and get bids.

    1Reply
  • Thierry Van Roy
    OP
    Maastricht, The Netherlands · Member since 2013 · 131 posts · 18 votes
    12y

    I know it's a long shot, but I am asking for a pretty wide range. The "it depends" is the only correct answer, so you're 100% correct, but the problem is that I have to place an option bid and the price I'm willing to offer stands or falls based in very gross estimates on how much the work is going to cost me.

    The thing is this: I might get it at 350 USD/sqft and these apartments sell for an easy 650 USD/sqft. But selling is only my exit strategy (I intend to hold), so the construction can't cost me an additional 300 USD/sqft.

    Are there any resources on the numbers behind apartment construction I can look at perhaps?

    I've been asking around everywhere, but the clock is ticking and I'm not sure whether I'll get the chance before it gets snatched away from under me by a 'greater fool'.

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  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    12y

    @Thierry Van Roy Unless a person KNOWS your building codes, costs for materials and labor, permits, process for doing the work, etc. whatever price we give you would be no better than you making up some figure and using it. It would be worthless, and even worse than that it could cost you a fortune by over or underestimating the cost.

    Find a local contractor and get an estimate, or find another investor that knows your area. That's the only way to get correct information. Have you tried doing a member search to find other investors in your area? Search Members , or have you done a search using your area and type of property etc.? I'd also suggest you fill out the keyword alerts. Good luck.

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  • Thierry Van Roy
    OP
    Maastricht, The Netherlands · Member since 2013 · 131 posts · 18 votes
    12y

    Thanks for offering advice in any case. I think I might have located the original architect, so he should be able to tell me how much work is left. Complex situation, ugh.

    Any resources you can recommend me to grow (!) some insight into building costs for apartment buildings? I wouldn't dare comparing myself to contractors or architects, but I was able to grow my knowledge of historical buildings through study, so might as well continue asking newbie questions while I'm at it.


    PS
    I'm in the old continent, so BP contacts won't help me much.

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  • Paul Timmins
    Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
    12y

    @Thierry Van Roy

    Call three local REIA clubs presidents ask for investor contractors as referrals, do not pay retail.

    Go to IREM.org search for ARM certified property managers. Call 5 ask them what sides of the city they like/dislike and why. Ask what they see them selling for and what expenses are by category. Ask if they know anything coming up for sale.

    I have a buddy lives in Amsterdam has 1,500 units under contract in the US right now. He built a team of the best of the best.

    Paul

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  • Thierry Van Roy
    OP
    Maastricht, The Netherlands · Member since 2013 · 131 posts · 18 votes
    12y

    Thanks for the idea, but I maybe should have said I'm also investing in Europe ;-)

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  • Account Closed
    Investor / Developer / GC · Manassas, VA · Member since 2013 · 229 posts · 39 votes
    12y

    Thought this was the case when I read Maastricht, The Netherlands and the reference to "Plastering". Try a search for other REI groups in the netherlands as I'm not sure what international presence BP has. Good luck!

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  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    12y

    Actually, BP us growing worldwide, so start your search here. I've had calls from Singapore, and other areas from people on BP.

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  • Mike Secor
    Sebring, FL · Member since 2013 · 5 posts · 2 votes
    12y
    What is the total square footage of the building? Where is it located? Define 90% done for the apartments. Finishes such as tile, fixtures. Lighting, flooring usually constitute more than 10% of the total cost. If the building is approximately 20,000 sf I think the $200,000 may be low. I am a Licensed Unlimited General Contractor in Florida with in excess of 9,000,000 sf of completed projects over 40 years. I think I can help you but I need a little more information. Mike Secor
    1Reply
  • Michael Do
    Contractor · Tigard, OR · Member since 2014 · 30 posts · 25 votes
    12y
    Thierry Van Roy why don't you bring in contractors during your inspection period? Either way you are only loading inspection money rather then guessing on something that could be 100s thousands off. Inspector should flag any non code compliance issues and general and any other contractors you bring in should know if it's ready to be put back together. I don't think your going to get a good answer here without detailed plans, photos and understanding of local pricing and code. Good luck!
    1Reply
  • Thierry Van Roy
    OP
    Maastricht, The Netherlands · Member since 2013 · 131 posts · 18 votes
    12y

    (Mentions still not working, sorry.)

    I see I made a mistake in my first post, but I'm trying to talk in sqft rather than meters to make it more easier on the forum members. Oops, sorry for the confusion.

    Mike, 20,000sqft would have been a bit too large a project for me, I'm already at my limit as is. It's 4,500sqft living space and another 1,300sqft in hallways.

    The floor that's still a construction site is about 1,000sqft (I predict 400,000 USD on that). The apartments that need a lot of work done are about 300sqft, together with the other apartments that are 90% done (thanks for the 10% rule of thumb!) I estimate at 300,000 USD.

    I'll try getting a more detailed plan today or tomorrow, though.

    Michael, I can answer that question easily. I need an estimate of the costs before getting it under an option contract. If I know the costs are like 700,000 USD, I can make a bid based on what the total cost and ARV should be.

    Then, once they accept and allow me a month of due diligence, I can start spending on experts and get the real cost and scope of the work. After that, I can still back out of the deal.

    I don't like spending a few thousand on that if somebody else gets to a winning bid first or if it's a total dog anyway.

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  • Rick Baggenstoss
    Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
    12y

    I might go at like this:

    Labor

    48 = 8 units to be plastered at 6 workdays each + materials

    60 = 6 units needs some framing x 10 workdays each

    18 = Plumber days

    18 = Electrician days

    36 = Handyman days

    X 2 cause I don't know what I'm talking about

    ------------

    360 days x $240 = 86,400

    Materials/Packed work

    180k = 18 Ikea kitchens with appliances installed :-)

    $36k = 18 bathrooms installed

    $18k = 18 units painted

    $43k = $10/ft x 4300

    $18k = $1k per unit Fixtures Lights and Plumbing

    ----------------

    $295k

    Contingency of 20%

    -------------

    $440,000 TOTAL not including permits, health insurance, chocolate, and beer

    1Reply
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