All Forum Posts by: Junaid Khan

Hello All!

My wife and I own two single family homes next door to one another.  One we rent out, the other we live in.  We have equity in both properties and need help figuring out the best way to leverage that equity into additional properties.  We are open to renting out our primary residence, and renting an apartment ourselves, if that helps anything.  We miss the amenities of apartment living and realized our family does not need as much space as we have. I have outlined some details below and would appreciate any insight.

Our background:  We flipped properties from 2018-2022 and are still licensed general contractors and real estate agents, but have not been very active in either the last two years as we both took W2 jobs in 2022.  We are wanting to get back to being self-employed but are at a loss for what steps to take next.  We were both laid off over the last couple of months and would prefer not to go back to Corporate America.  PLEASE HELP!

Primary - 4bed/2bath, 2200SF, 3car attached, 1/2acre lot

Mortgage = $330k, Payment = $2100 PITI, Value = $450-475k

Rental - 4bed/2bath, 1600SF, 2car detached, 1/2acre lot

Mortgage = $190k, Payment = $1600 PITI, Rent = $2100/mo, Value = $330-350k

-Market rent is closer to $2500, but we kept the rent low to help the family that lives there.

I have spoken to several banks and so far things are looking good.  The project seems viable and the lenders are telling me the numbers make sense and that they would consider lending on the project given we can pass the underwriting process.  

Now I need to come up with some plans so that we can start getting bids from subcontractors. Then we can create the Sworn Construction statement to present to the lenders.  

Do you guys have some suggestions on Architects?? 

Thank you again for the additional responses.  I have been thinking of potential partners if that is a necessary, however I would prefer to pursue other options before going that route.  I have taken it as a personal challenge to see if my wife and I can make this a reality without the financial backing of an investor.

Some additional info about myself, I have a bachelors in business and Construction Management, and at one point helped my family manage nearly 90 rental units.  I am no longer apart of that business, but do have both construction and rental experience in my background.  Not sure if that makes any "real" difference,  but thought it may be worth adding.   

According to city specs the lot size is 12,315 sqft.

Rental income in the surrounding area is between 1400-1600 for 3 BR homes and duplexes. I was not able to find much for 3BR apartments.  There is always the option of building smaller units, but I thought it would be in our best interest to take advantage of the lot size and build larger units.  

Thank you all for your input, I appreciate all of it.  I will start by calling the lenders mentioned and see where that gets me.  I did not specify unit size, as I do not have any plans yet, however we would like to build 3 BR/2BA units as there are many families in that area and we think the extra bedroom and bath would be a great advantage compared to other units renting in the area.  I completely agree that they would be no where near 2500sqft, I just shared that because that is what allowed based on the square footage of the lot and zoning restrictions.

I may very well be underestimating the costs, that's is why I wanted to reach out to this knowledgeable crowd.  The finishes on the building would be very basic as the lot is in a lower income part of town.     

Hello all, this is my first post here at BiggerPockets, so I appreciate any advice and/or criticism you have to offer.

My wife and I have bought and sold 2 properties for profit in the last couple years and we are currently working on our third, which should be the most lucrative of all.  We recently inherited a vacant lot in Minneapolis that is zoned for a 9-unit apartment building with units up to 2500 sq.ft. each.  We are looking for advice on the best way to finance the construction of a new building, as well as what we should expect the overall cost of construction to be.  Currently we think we could build 9 -3BR/2BA units for roughly $1mil.  

Background:

-Both work with total annual income of roughly $90k

-Both have near 800 credit scores, zero debt other than our mortgage of $1600 (tied to sale mentioned below)

-Once we sell our current project we should have $130k liquid cash available to put towards down payment. 

-Land is owned free and clear