New Build Considerations (Wisconsin): most cost efficient layout?

[Michael Johnson]

Hi Everyone,

I'm looking at buying an acre of land for under 5k that's only a few blocks away from the city hospital, school, its in a nice part of town and its in my hometown - only around 5000 people live here. I wanted to start looking into what it would cost to build 2-4 units on this parcel. I thought a good place to start is to ask the question on what is the most cost efficient building layout? side by sides townhomes? A 2 upper/2 lower unit build? What are some of the most important things to look into off the bat when doing a cost analysis? I have a few long term buy and hold properties but I've never looked into new builds and since this land is right behind the house where i grew up, I thought it was at least worth looking into what it would cost to build there are start doing some research. Any advice on where to start would be MUCH appreciated, thank you!

[Marcus Auerbach]

Not much to add after @Scott Schultz! I'll just tie it up by stating that usually the land is roughly about 20% of the build cost. So, a $5k could be an indication that the sourrounding houses are really cheap, which could mean some limitations on appraisals and rent. 

This is the reason why it is still very difficult to build new in most parts of the city of Milwaukee; appraised values are just not there (yet). A 2,000 SF new build will run about 400k plus 100k for the lot - that math only works in some parts of the North Shore. Usually a tear down and rebuild and the challange with that even wrecks tend to sell for 200k and up.