All Forum Posts by: Jennie Berger

Great info from @Prashanth Mahakali & @Jonathan Klemm. Both highly qualified in this arena. 

To help clarify a little--I can't speak for Jonathan & Prashanth--but our ballpark numbers to build something like you've mentioned would be between $170-$190/SF. This INCLUDES our markup to the customer (ie, you). If you went with lower end finishes, you can shave off $5-$10/SF.

With hyperinflation subsiding (we think?), the hope is that supplies and labor will not continue to increase. That being said, until you have full architectural blueprints completed, there is no way to know for sure what this type of project will cost. 

Yes, having your own land helps with regards to total overall cost of the project. However I'm not sure how it could be helpful to a developer... Our company prefers tear down / new construction work personally, but as Jonathan wrote, unless the building has structural issues or some other form of disrepair that makes it uninhabitable (safety wise), you may be better off with a renovation and converting it into a 2-unit, if zoning permits. 

Either way--and to save yourself time--whether you choose a rehab conversion to 2-units or a new build with 2 units, I'd first check to see that existing zoning even allows this. Do this by connecting with a local architect, builder / developer, or use the city map if you're tech savvy here. Once you've checked the zoning, you can read a quick summary of what's allowed here.

Let us know how we can help and good luck!

Jennie Berger

Property People

Hi @Taronda Ransom. 

Just sent you a message. If you'd like to connect and explore further, please feel free to reach out!

Jennie Berger

Property People

@John Warren Would you care to elaborate a tad on 'agency debt' please? What it is and how it compares to bank and hard money loans? I've never heard this before. Thank you!

@Mark Ainley Sounds like a fantastic episode. I'm going to listen to it this weekend. Thank you for sharing!

Hey @Mario Morales: We have mixed feelings about LVP in basements. Prior to the 9/11 floods (in Chicago), we had always used LVP. The 'waterproof' kind (or so the manufacturer says). More like water 'resistant-ish'...as long as you don't let too much water sit on the floor for too long...

One of our gut rehabs that we sold last November had a sump pump failure and their basement flooded. The LVP held up initially, but because they didn't get the water out soon enough (like, the same day), it really took a toll. They ended up having to remove and replace most of their basement flooring. Honestly, no sump pump could have withstood the amount of water many Chicago basements encountered that day. The city sewer (and water) lines are incredibly old and defunct. So even with a gut rehabbed home that has a fully waterproofed basement (drain tile, sump pump, etc.), nobody is impervious. 

Ironically, we built a new construction home RIGHT NEXT DOOR to this gut rehabbed property (at the same time) and installed LVP in their basement as well. They had ZERO issues on 9/11. Of course, they also had a brand new water and sewer line installed when we built the house. Though the new line is still connected ultimately to the city's older sewer lines, we install an overhead sewer with ejector pump on the new construction properties, so that helps as well. I believe these factors, in conjunction 'possibly' with the placement of the property (perhaps it was on slightly higher ground?), were their saving graces.

Bottom Line: If you're installing waterproof/resistant LVP in a basement, absolutely use a moisture barrier / underlayment AND make sure--if you're holding the property as a rental--to get water out of there ASAP.

Jennie Berger

Property People

Hey Veronica-

New construction is incredibly exciting...and can certainly be overwhelming at first. Though I admit, having done both gut rehabs and new construction, I find it to be a LOT easier. It is more expensive, but the process overall--once you learn to navigate it--is simpler.

I agree with @Sanat Bhandari! Parterning up / collaborating with a team who has already done new construction is probably your wisest move. While there are several ways to structure a partnership with a GC team, most lenders for these types of projects will want to see both parties on the loan. 

We are licensed general contractors with the city of Chicago who specialize in the new construction of single family homes and small multi-unit buildings. We've just (95%) completed a 4-unit condo build in Logan Square / Avondale, and are in the process of shelling up a new 3-unit condo building in Lakeview. While we primarily focus on our own developments, we also offer design build services to homeowners and other investors. 

I'd be happy to chat with you to see how we may be able to help. At the very least, perhaps I can answer some of your questions and remove some of the 'haze' about ground up construction so you can make an informed decision about how best to proceed. Feel free to DM me if you'd like to set up a time to chat. 

Happy New Year!

Jennie Berger

Property People

Hi Y'all:

Having regularly attended local real estate meetups over the years, we have met some truly incredible people in all facets of the real estate industry. I have encountered, however, very limited people (maybe 2?) who specialize in new construction / development of single family homes, and small to mid-sized multi unit buildings in the city. We have sporadically met other developers here and there, but would really love to meet and establish meaningful connections with a few more. Ideally, those who are more experienced, smarter, wiser, and talented than us.

I'm looking to gain more resources / people to rely on: 

-For new ideas / help / troubleshooting / brainstorming

-To help us better our systems & operations 

-To ask for / offer guidance when needed

-To share contacts, vendors, suppliers with

-To collaborate with potentially 

To that end, do you have any recommendations for networking events, organizations or groups I may research / join, and anything else I can do to expand my network in this arena? 

Thank you and Happy New Year!

Jennie Berger

Property People

I have considered doing this! We bought a property in Lakeview to tear down back in April. While waiting for the permit--and the final building plans to be approved--we knew we had about 6 months so I thought it would be an ideal location (close to Wrigley Field and all) to rent out 2 private spots in back of the home. Never pulled the trigger but I'm really curious what others have to say (for my own future reference), so, I'm chiming in here. (Sorry that's probably not helpful at all, @Christopher Koechle LOL :))

I'm with @Carlos Ptriawan on this one. If this is your first rehab, it might be best to take on a more cosmetic project. Albeit, I know that's very difficult to find in Chicago, with all of the old buildings. 

If you underwrote this deal very conservatively, and have $100k+ extra dollars in your budget (that includes a contingency for all of the unknowns, possible continued inflation, a surge in materials & labor pricing, longer hold times, etc.), then it could work by hiring a well qualified GC to handle EVERYTHING, like @Jonathan Klemm & Quality Builders, for example. 

Don't even consider hiring a 'so-so' GC for this. ESPECIALLY because you are not a GC, and most likely have little to no construction experience. So you cannot baby sit them to ensure they're doing everything 100% correct and getting all of the necessary permit(s) and inspections along the way. 

A lot of people do hire GCs that claim they can do it for this "great price". Bear in mind--with all due respect to the brilliant, diligent, and talented GCs here-- General Contractors in Chicago are a dime a dozen. And the majority of them will NOT tend to repairs properly. Which will end up leaving you with higher repair and capex expenses, and God knows what else, down the road.

Jennie Berger

Property People