All Forum Posts by: Jay L.

@Jay L. You are not including soft costs. These typically run 20-25% of hard costs and include costs such as engineering, architecture and debt service. I'd estimate on the high side for your project since you will have broker fees to pay and some units will take longer than others to sell.

I would estimate your project costs at around $2.5m and you project total sales around $3m. If you had say 25% cash down, you would be looking at doubling your money.

As to lending and financing, I would suggest:

1. Build a pro forma, even at a high level

2. Call 3 or 4 medium sized commercial lenders and present the opportunity

3. If you have initial interest, option or buy the property and find investors

Very cool Nick! Thanks for providing a action plan. I will be attending to the local Real Estate investor meeting, next week and will be looking around for any leads moving forward. Thanks!

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Originally posted by @Al Wilson:

Having seen and starred in previous versions of the condo development movie, here are a couple of cautionary thoughts: Do you have experience with significant construction projects? Your building costs sound low. Has an architect given you a construction estimate? Have you factored in construction loan interest expense? What about site preparation expenses?

There are a lot of things that can go wrong with one if these. Personally, I would not do this one - not enough margin to keep it from going bust if something goes wrong. That said, good luck.

Plans have developed by an architect and were provided by the seller of the land. The architect came up with the construction estimates. I have not factored in the loan interest expenses or site preparation costs.

I will definitely be doing my research more into this, but I appreciate you bringing up other factors I originally didn't think of.

Thanks!

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Originally posted by @Chris Seveney:

Does that include land development costs, marketing/advertising/sales, permits, drawings, do you need to add any roads or extend any utilities ? What about development impact fees, or sewer tap fees etc. while I don't think it will cost you all your fee, those costs do begin to add up including carrying costs as well. You will most likely need to buy the land outright and then a lender could finance construction costs

No, the quote did not include land development costs - good point! You are definitely right, the marketing, drawings, permits, and utilities could add up pretty quickly.

Will have to look over these costs a lot more in depth. Thank you :)

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Originally posted by @Jean Taveras:

Depends on the quality, and marketing. You have to also factor in costs for commissions, closing costs, holdings etc. either way, you will have a good profit of 700k+ if sold within a year.

Thanks for the response Jean.

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I was curious to see if anyone has experience with financing and developing a condominium building? This is in a amazing location, by the way!

The plans for this property call for 6 Luxury Units, each around 1800 Sqft.

Land Cost: $250,000

Build Cost: $1,850,000.

The overall square footage of the building (including the ground-floor parking area) is 14,800. Taking this times $125/SF gives us an estimated construction cost of $1,850,000.

Total Cost: $2,100,000

Being a Realtor, I pulled comps for Condominiums in the Area, which show an average sell price of $253 SqFt and average days on market being 55.

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I think we could sell every single one of these 6 units at $505,000, and move them very aggressively at $485,000.

Total Sales: $3,030,000

Total Cost: $2,100,000

= $930,000 Net

Anyone accomplished something like this before?

Hoping someone can give me some guidance for lending or partners.

Thanks!

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Welcome @Brittany Johnson, I second @Michael S.. NOREIA is awesome!

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@Kimberly Lipari welcome!

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@Justin Harris Hey Justin, welcome! Excuse me ignorance, but what does hiring a VA mean? A VA loan?

How do you plan on financing the property? Will you be owner occupying? If so, a FHA loan on a duplex or tri-plex is a great place to start! I'd recommended the FHA route for new investors, but I'm sure other people have opinions also.

Do you have any cash to put down? There are some Bond For Deed (owner finance) properties for sale in the NOLA area, but they are a lot more rare, and typically require 10% - 20% down.

Thanks!

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Hey @Lee Griff it appears you have no desire to be a "landlord", so a fix and flip seems to be your best/only option.

I'd be very careful with foreclosures in the New Orleans area, there are some horror stories regarding tax and titles issues. But of course if it works out, then you could be sitting in a good position.

I would honestly try finding a rundown/blighted property being sold through the MLS, and they're are tons in the 504 area, and fix that up. Try looking for a blighted property that's in a upcoming area, and I can help you find something if you interested in working with a Realtor.

Let me know if you have any questions, feel free to contact me anytime.

Best,

James

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@Harry D Johnson look into some local Real Estate investment meet-ups. Check this one out New Orleans Real Estate Investors Association. I think it would be a great start to network.

Message me if you have any questions.

Thanks - James

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All Forum Posts by: Jay L.

Jay L. has started 3 posts and replied 28 times.

Post: Building Condominums

Post: Building Condominums

Post: Building Condominums

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Post: Building Condominums

Post: Hi I'm Brittany from New Orleans.

Post: New member from Louisiana!

Post: New member from the New Orleans ,LA area

Post: Investing in first house with line of credit or fha/conv loan?

Post: real estate investor jobs