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Updated about 4 years ago,
Investment property terms
I am working creating the best terms for an investor on a 15,000 sq ft lot where 2 things can be built:
12 2 bedroom apartments that rent for $2,200 each. $26,200/month & $314,400/year. NOI as 60% of gross= $188,640 / 5 CAP = $3,772,800. potential sale price - taxes - realtor fees - loan origination - holding costs.. Hedge funds will pay 5-5.5 CAP. Or this can be held for rental income.
For 6 3bed 2 bath homes, building at about $130/foot @ 1400 sq ft = $182,000 × 6 = 1,092,000 + 545,000 land = $1,637,000 build and acquisition cost. Sale price $700,000 × 6 = $4,200,000. Profit =2,563,000 - taxes - realtor fees - loan origination - holding costs. We do have to get confirmation that the city will allow this type of construction.
We are looking at bringing in an investor at @ 6% preferred return + 40% profit. There are 2 $1billon+ developments in the area that are increasing the value and gentrifying this area significantly and will continue to do so over the next several years.
If you have experience building a multihome project, or a 6-12 unit+ apartment complex with investors, what investor terms did you provide and what advice do you have for this type of project and how do the returns and expenses compare to your area?
We are building new SFH in the area for about $150k home + 250k land= 450k-400k with a sale price of $850k with crews and 4 flips under construction in the area with good relationships with our builder, and contractors working on these projects.
12 2 bedroom apartments that rent for $2,200 each. $26,200/month & $314,400/year. NOI as 60% of gross= $188,640 / 5 CAP = $3,772,800. potential sale price - taxes - realtor fees - loan origination - holding costs.. Hedge funds will pay 5-5.5 CAP. Or this can be held for rental income.
For 6 3bed 2 bath homes, building at about $130/foot @ 1400 sq ft = $182,000 × 6 = 1,092,000 + 545,000 land = $1,637,000 build and acquisition cost. Sale price $700,000 × 6 = $4,200,000. Profit =2,563,000 - taxes - realtor fees - loan origination - holding costs. We do have to get confirmation that the city will allow this type of construction.
We are looking at bringing in an investor at @ 6% preferred return + 40% profit. There are 2 $1billon+ developments in the area that are increasing the value and gentrifying this area significantly and will continue to do so over the next several years.
If you have experience building a multihome project, or a 6-12 unit+ apartment complex with investors, what investor terms did you provide and what advice do you have for this type of project and how do the returns and expenses compare to your area?
We are building new SFH in the area for about $150k home + 250k land= 450k-400k with a sale price of $850k with crews and 4 flips under construction in the area with good relationships with our builder, and contractors working on these projects.