7 Unit property with 4 units gutted

[Andrew Feil]

Hey Everyone!

I am looking into a deal which is a total of 7 potential units. Right now there are two buildings, 1 a duplex and 1 a 2 story building with a 1 bedroom apartment finished and the rest of the building completely gutted to the studs. The duplex and the one bedroom apartment are all rented. Right now the current owner has plans drawn up from an architect for 4 two bedroom apartments in the remaining space, approximately 600 sq ft each. The 4 new apartments are going to need all of the interior framing, windows, electric, plumbing, heating and also new siding for the building. The list price for both buildings is $169,000 which I think is reasonable since finished duplexes sell for $100-120k in my area.

So my question to you guys is, has anyone had any experience doing apartments like this? I am trying to figure out a number per unit so I can go to my bank with a good estimate of how much I will need to get these 4 units finished completely. Obviously this is going to vary a little bit per area and I will also be doing some of the more high dollar work like a new service drop and a lot of the heating/cooling install myself. My initial number which my contractor and I came up with was $40,000 per unit. (I am going to get a second contractors opinion this week.) Some people have thought this was too high, and then others thought it was too low. What are your thoughts???

Thanks for your help!

Andrew