Building townhouses in north ATL

[Edgar Ferrari]

Hello,

Just wanted to get some inputs on this investment idea. 

I will soon have own cash around (1M) that I could invest in a small size development for townhouses probably around 6-12  in the northern Suburbs of ATL and wanted to get some inputs. 

I am looking more for inputs on expected returns, builders to do it, size of lot etc. This is very preliminary and want to know if it is a feasible/possible investment with decent returns  or not.

I do have flexibility in terms of building and renting or just sell them out, though I would prefer to sell them at a profit quickly.

specifically these are my questions:

1. If I want to build 2 blocks of townhomes of approximately 4 to 6 each block each 3 bedrooms around 1600 sq ft each. How large should the lot be? I am not familiar yet with the  planning regulation in these counties (Gwynett, Forsyth, North Fulton).

2. What would be the approximate cost per sq ft on a townhome with an average level of specification?

3. Who would be potential established builders to contact for this type of project?

Any other comments please feel free to share. 

[Jason Munson]

1.  Gwinnett and Forsyth will probably limit you to 6-8 units/ac at best so, depending on topo of the site, setbacks, etc, you'll need ~2 acres. 

2.  Hiring a builder for turnkey construction will likely run ~$80-$100/sf (not inclusive of land/site costs) depending on finishes.

3.  You'll have to hire a home builder for this as the project is too small for a general contractor with stick framing experience. 

Not sure of your experience level but this kind of project is not for a novice.  With $1mm to invest, you'd be better off being equity for an experienced builder and getting a preferred return and equity splits on closings and letting the builder take the execution risk.  I have a lot of experience in resi development in Atlanta so I'm happy to discuss if you have any questions or need more info.