First Development that includes two properties

[Adam Hughes]

My partners and I are working on obtaining our first property that includes the opportunity to develop two additional lots zoned 1-4 family. Location is in Southern Illinois in a small college town. We’ve not developed our own properties yet but we have confidence in our knowledge, ability, and relationships. Looking for advice on bank financing for the development vs exploring private lending vs bringing on another equity partner. Also open to other ideas.

Here are some numbers:

Properties Include: 5 yr old triplex, duplex, and two lots next to the triplex.

Negotiating Contract: 450k - 500k for the package.

5 plex rents = 3500

Duplex rents = 1600

Construction Cost per 4 plex = 300k

Rent per 4 plex = 3k

Biggest concerns/questions:

Rural community but holds the county seat.

College town and unsure how long COVID will impact these smaller schools.

Construction materials are high currently, should we wait to build?

How do we best finance the development?

Looking forward to hearing pointers, advice, etc!

Thanks