Getting into Real Estate Development

[Jonathan Palumbo]

Hello All,

To get this started I will give my current situation. I am a young investor with my 2 other brothers, we are currently investing in Kansas City, Missouri. We have now 3 properties under our belt!

Property 1:

Purchase price - $73,000

Mortgage - NONE (Paid Cash)

Monthly Rent - $875

Monthly Profit - $580

Property 2:

Purchase price - $65,000

Mortgage - NONE (Paid Cash)

Monthly Rent - $950

Monthly Profit - $750

Property 3:

Purchase Price - $107,500

Mortgage - $80,625 

Monthly Rent - $1300

Monthly Profit - $435

Current Cash Available - $110,000

Current Available Equity - $96,500 

Cumulative Total - $206,500

The available equity was a HELOC loan that was given at 70% LTV so those are real numbers, they would be from property 1 and property 2.

The reason im typing this is because I would like to know if there were any builders that could give a rough estimate of building cost per square foot in Kansas City area or suburbs. The builders ive tried talking to are mostly in communities so they do not build on land that was not theirs unless it was $350/sqft!

This could be a reasonable price but this was only from 2 companies, but would anyone else who is a GC or home builder please let me know about building price per square foot in their area or in Kansas City area? Anything helps, per this example we could say:

A single family home that is not builder grade but not luxury so in the middle being 1,600 sqft, 3 bed, 2 bath.

Also a:

duplex that is 2000sqft vertical build that is identicle layout on floor 1 and 2. each unit would be 1000 sqft and 2 bed, 1 bath.

To note, the loan on property 3 is a DSCR loan because there is not 2 years of stable income from me because I am still in college.

If there is anymore info that could be needed please let me know. 

Once again I would like to hear about building costs in any of your locations, its all a great help!

Thank you once again!