Worcester, MA - Townhouse/Single Family Development

[Andrew Duncan]

Hi All,

First time poster, long time reader. Just a little background on myself; I am 25 years old, currently own a couple of rentals in Worcester, MA. I went to college for Landscape Architecture but focused more-so on site planning, project management, etc. I spent a couple of summers working in project management for the city and have spent the past 5 years working in our family business doing the sales, estimating, and management on outdoor construction projects which range from retaining walls, to landclearing, and site excavation. I have a good grasp on all of the sitework aspects of development, the process of valuing and acquiring land, as well as the local zoning ordinances and laying out sites. I have a good friend who comes from a construction background. He has worked for his father for about 5 years as a GC but has limited knowledge in estimating costs, he knows far more about the actual work and the building process. We have been looking at properties to either build single families or attached townhouses, both of which are fairly easy to get approved locally depending on the lot/zoning. Between the both of us we have a lot of contacts in all of the associated trades as well as good friends in different areas of real estate and he already has a good rapport with subcontractors that they have used for years. We both have capital to get started but I have a few questions.

1.) What would you guys feel is a good general SF price to build in this region. I have heard everything from $100 per SF to $160 per SF. Obviously a lot can depend on the site, complexity of the home, and finishes; but assuming it was a fairly simple lot, with average site and foundation costs, with average finishes, what range would you expect to be in?

2.) What would you guys feel a good sales price is per SF? Locally the average sales price is $165 per SF +/- but a lot of that is older homes in the area. I am comfortable doing the research and finding comps but I was wondering if you guys have any thoughts.

3.) Do you guys have a rough breakdown of percentages for each development project. For example: 10% land acquisition, 10% design/architects fees, 20% site work, etc.

4.) Are there any books or online courses that you would recommend? I have read a lot from the books advertised on this site.

5.) Do you have any other recommendations for people starting out in development?

Thanks in advance!