Building a new fourplex

[Juan Ramos]

Hi. I own two triplexes in a small town near Phoenix, AZ. All the units are occupied and a lot of people is still asking  if there are any units available. I'm thinking the possibility of building a fourplex in the ame area. At first, I thought about building two Fourplexes next to each other but I found out that regular banks don't do construction loans for investment properties any more. Now my idea is to build one building first, finance it to pull my money out and then build the other building. I'm familiar with remodeling but not too much with new construction so I'm not sure how much I'll need to get it built. I was told to consider $100 per sq ft as a rough calculation but I would like to get some advise from someone that is experienced and/or familiar with this. 

[Garen T.]

I'm collecting bids and getting ready to pull the trigger on a duplex built on a lot that I currently own. Here is my cost breakdown so far. 

1632ft2 per side =3264ft2 * 100 = hard cost of $326K

Builder fee: 9% of hard cost = $29K
Permit fee: I'm setting aside $18K. Estimate $15K for building and then sewer and water are added. 
Tax fee: 8.2% of hard cost  = $27K
Insurance for coverage during construction. ?? Still getting quote. I hope less than $1K
Plan design and engineering = $4.5K

Total all that and I'm in at $111/ft2. I'm going to finance the construction loan myself by doing HELOC on 2 existing properties. Once the project is finished, I'll take a 1st out to cover this amount and pay off the HELOC's. I'm expecting rents will be $1600/side and the mortgage will be $2200.