Duplex Venture in Alabama

[Trenton Harris]

Hi all, brand new here and looking for advice and wisdom. 

Just to preface: I live in Opelika, AL 36830. 

Recently my father and I have been in the talks about building some rental properties. My grandfather owns 21 duplexes and they have been paid off for nearly 15 years - earning him around $15750 a month. Recently the lot next door to his rentals has become available (almost 2 acres) for 85k. We definitely want to work that price down to around 50 - 55. The area is low income and most of the tenants are section 8, which means that rent is usually paid on time every month from the GOV and most of the tenants are long term. 

My dad had plans drawn up back in 96 for a similar project nearby, but he never went through with it. The cost to build the 1800 square foot duplexes was 30k a unit/60k per building. I know in 2020 this number would be off by quite a bit. We are planning on perhaps using the same blueprints this time around.  Does anyone know the average cost to build in this area or in the more rural South? These would be VERY basic and modest homes. We plan to start with at least 4 and hopefully get up to 9 or 10 on the lot, but we haven't been able to tell yet exactly how many would fit. 

Land excluded, would a 450,000 loan with 15-20% down be enough to construct these homes?  

The rent goes for 700 to 900 in the area and considering these will be brand new, we will probably set rent at 800 to 850. 2bed/1ba. 

Based on my math and the rental tool, we would stand to profit 3600'sh a month on these things if we went with a 30 year loan. My dad doesn't want to do 30, instead he would rather do 20 (says he cant see paying the bank 500k in interest. The 20 year still yielded around 3100 a month cash flow. 

I guess my main questions would be A.) Could we even build 8 units for 450k? B.) What are your building cost predictions? C.) Would a 20 year loan be wiser? 

thanks in advance for reading and for your imput.

-Trent