All Forum Posts by: Christian Sobiech

Hello BP community,

I'm a long time reader and listener of the BP forums and podcast. I'm at the tail end of my new construction duplex project and considering financing options right now. The background to this project is lengthly, but i'll give the short version. I acquired a building lot back in 2018, the lot had a home on it previously before it had a fire and was reduced to just a foundation. I went through a zoning board variance process in 2020 to receive approval to build a two family home on the property. After receiving the approval in late 2020, I began navigating through various construction options. In 2021, I choose the modular route instead of stick building. Now I am almost to the finish line with the house being set, just the finish work remains for the two units. I choose to do this project without any initial construction loan or outside financing, which makes it very similar to a traditional BRRRR. I'm currently looking at cash out financing options. This property is in an LLC. I've talked to a couple local banks that offer balloon loans. Ex: 10 year balloon, 10 year fixed at 5.25%, 25/75 LTV. I'm familiar with ARM loans, but not balloons. I've read on some BP posts that people had success negotiating a guaranteed loan renewal at the end of the balloon. What are people refinancing with? I'm a relatively new investor with a focus on buy and hold rental properties. I have 1 commercial loan at the moment for a different investment. Greatly appreciate any advice!

No equity for the capital invester? Then its basically a loan.. most HML are 10% and points.. maybe try an inner ciricle for private money?

Can anyone recommend a modular company in the New York area?  I'm currently shopping around, but finding it difficult to have good price comparisons.

I would strongly suggest to not invest anymore money into this property, only necessary cap ex and R&M.  If it's rented why do additional unnecessary improvements?  At the current amount invested 198k and 1500 in income your sitting at .75%, even if you raise rents by 30% you wont hit the 1% marker and thats on the back end after operating it (your suggesting it needs improvements to get these rents?).  Granted the 1% rule is very general and if you're in an expensive market you need to aim way higher.  You seriously need to take a look at the opportunity cost of your cash. Also be VERY careful with inherited tenants.

Right, 150s/f at 2200 living space = $330,000 construction + land acquisition.  Rentals 2bd town home style will rent for 1800.  Total rent= $3,600.  To me thats meets the 1% with brand new everything.

Selling prices right now for multi families are between 166 sf - 206 sf in my surrounding market.. definitely not buying 50-75 a foot without some major rehab work or you're in war zone territory.

I should specify a little more, this is in Orange County N.Y.  Generally two-families in my area are selling between 300-400k and these are properties that need work to get up to market rental rates.

Hello BP! This is my first post, but I am a long time follower/fan of the podcast and forums.

I'm a buy and hold investor, I came across an opportunity a couple years back of obtaining a building lot.  The lot had a 2 family on it, but burnt down with only the foundation remaining.  This past year I spent acquiring a variance from the town ZBA to be able to reconstruct in the same foot print and rebuild a 2 family.  

I am now all approved to build a 2 family, the footprint is 32' x 35'.  Total living square footage would total 2240.  My location is upstate NY in the tri-state area to give you an idea of my location because I know that also plays a huge role in determining building costs.  My goal is the build 2 separate unites.  Each unit consisting of 2 bedrooms each with 1 full bath and 1 half bath.  My septic is approved for this size.  These units would be rentals.

I'm trying to weigh out my options to be the most cost effective with my build.  I've talked to a modular company that would work with me and not through a builder.  The modular company initially came out to around $95 per sq ft.  This includes insulation, roof, siding, frame, electrical, plumbing, windows, stair sets (1st floor to 2nd floor), light fixtures, kitchen cabinets, bathroom toilets, vanities, shower/tub, panel boxes (delivered not installed), sheet rocked and primed, transportation and setting of the boxes.  I would also receive plans for the foundation, I would have to get them stamped by an engineer.  The exterior would come 85% completed, I would be responsible to complete the remaining 15% of the siding/roof after the boxes are set.  My additional costs that I can sub out would include to complete the project; site work, demo existing foundation, new foundation installation, septic install, remaining 15% exterior on the roof/siding, landscaping, front porch installation, interior flooring, kitchen appliances, final coat of paint (delivered with primer), stair sets to basement, furnace & boilers along with installation, water tank & pump with installation, electrical (panel box set up, utility meters, electrical connections), plumbing connections.  All this would add to my initial $95/sq ft, just getting rough estimates would bring it up to $150/sq ft. 

Now, I know the stick build option is available.  This would require additional soft costs to even get a good idea of how much it would cost to construct (with modular the soft costs are built in for the site plan).  A lot of builders are hesitant to give me an estimate just based on sq feet without having a set of plans.  My other problem is that I'm having trouble comparing this modular company price with another because many other modular companies will only work with a builder.  I do want to mention I will have assistance from a family member who has experience with home construction.  I understand that each method has pros and cons.  I've also made headway with a construction loan and have obtained a pre-qual.

My main questions at this point is should I invest the money to acquire plans from an architect and get quotes to stick build, then compare?  Should I continue to shop around and try to get estimates from other modular companies.  Does the $95 sq ft seems high for the modular section?  

Thank you to everyone in advance for any potential advice or opinion.  I can also share my spreadsheet to anyone interested!

Wow this is great information!  I have a property recently approved for a 2-family.  I'm interested in the modular route.  The property is in upstate NY.  I was quoted around $94 per sq ft for a duplex style (2240 sq ft).  I'm not going the turn key route so I would be responsible for the following GC work; Site work, foundation install, furnace/boilers install, water tank, septic, connect plumbing, install panel boxes (panel boxes provided by modular company) and connect power, interior flooring, appliances, complete the siding/roof (15%) as it is delivered 85% complete, landscaping, front porch, final coat of paint inside (comes primed), 2x stair sets to the basement.

My question, do you think the $94 a square foot is high?  The duplex would consist of (2) units each having (2) bedrooms, (1) full bath and (1) half bath, and is multi level.  Inside everything completed except final coat of paint, flooring (was looking to do the water proof click system in the entire place).

Thanks again for the information, very helpful sounds like you're having a good experience with modular!