Building a Multi-family?

[Jewrel Rudolph]

Hey everyone, I've debated to myself about even asking this one but here goes...

Has anyone here ever did a new construction multi-family? (2, 3, or even a 4-plex) If or if not, how did it work out for you or why didn't it? 

I'm asking because there is a perfect lot near me (3 acres) that I thought about maybe buying and constructing three 4-plexes in phases. They are asking $99k for the lot. I've talked to a builder casually about doing the construction but we haven't talked numbers or anything like that. I just wanted to run this idea by the BP community for ANY sound advice. Thanks!

[Karen Margrave]

@Jewrel Rudolph  that price seems incredible. What is the zoning, and what density will they allow? A three acre parcel is a big parcel. 

As has already been mentioned, you have to KNOW what all the costs will be, and that the project fits with the zoning. On a lot that size, one of the biggest expenses is going to be installation of all the infrastructure. (utilities, curb, gutter, sidewalk, road, paving, etc.) as well as the excavation of the site. 

You might want to start by talking to a civil engineer, that can give you an idea on those costs. 

Once you have a better idea of how many units you'd be able to build, you will be able to figure actual costs to build the structures. 

Over the years we've built many spec projects, from SFR homes, Office buildings, Office/retail condos, Small office parks, and a residential/multi family subdivision (which ended up being our downfall when the market crashed)

Also, you didn't mention what the market for units is in the area. Are there a lot of units on the market, few, new/old, etc. Are rents high or low? Are there a lot of vacant homes around? 

In deciding to do a project, there is a lot of information that is needed in order to determine whether or not it's a good project or not. Good luck!