All Forum Posts by: Kent Newmark

@Kent Newmark

thanks for the note, one of the key things to bring your cost down is to essentially be your own contractor..  hire the vendors directly and get bids, put terms in that doesnt pay them up front and pay them by the job not by the hour.  negotiate everything.  Go to the wholesalers directly and buy directly.  the other items with the city are all going to be based on your architect and engineer which youll need to find through network/interview they can really help save you or costing you if they dont have experience.

I am actually living in houston TX and i invest almost exclusively in los angeles or else i would glady join you for a coffee.  my father inlaw is the "boots on the ground" and we have partnerships on our deals.  we mainly have a team of people we go to for the various jobs required for build but one of the biggest cost savings for us was building on an existing site because we basically were able to extract value from the front house - we used the same land twice essentially.  it doesnt have to do with your build costs but it helps in scale

Kent Newmark We don't plan on working with residentials unless it is a full gut with full plans.

Hi @Kent Newmark

You're probably all over this but buying a tear down is very different from developing raw land. I help clients with one small part of raw land development, helping them get through the regulations related to biological resources and endangered species. It's a whole different ball game. If you're doing a tear down you at least have a sewer and one water meter plus you don't have a lot of the issues and cost you face developing raw land. 

I don't see it going less than 180. That's just build. Costs does not vary by location, it varies by finish, government fees vary by location. If it is zoned correctly, someone already beat you to it, if it didn't sell, something is wrong with it, 50% or 2% rule does not exist in CA generally speaking, not in SoCal, not in Bay area.

in los Angeles I did something similar and I cut a lot of costs and still couldn't get below $150 sqft build...La has so many hidden fees and every year the code gets more restrictive and costly.  For example new builds require rain barrel and fire sprinkler...That alone will run anywhere from 5 to 10k.  Soil test required?  5k min.  Engineering and plans? 15 to 20 or higher...Then don't forgot you'll need to get new gas and power meters put in the request your first day as that takes months and ladwp will absolutely mess up and cost you money as they are basically legalized organized crime.  

The project was A second house on a large SFR lot before they basically put a moritorium on "granny flats". It was one hell of an experience...We had the front house renovations done rented it out, then built second house in back. Two addresses. Two sets of meters, two everything. The kicker is the front house got evicted by the end of the project...But it worked out because we finished and they moved and we sold it a couple weeks after.

In all honesty going from SFR to multi was a very good margin but the time headache and capital I tied up to this learning experience basically could have been better spent on me buying more cash flowing properties in South la or long beach or finding flip deals as the time we did this there were reasonable opportunity to do so... Purchased oct 2014 sold March 16

Right now I'm actually converting a multi-family into a single family home in Chicago in a nice neighborhood and it's going to run me about $100 PSF. Keep in mind this is going to be a high end 4,000 SF home with Wolf and Subzero appliances, custom cabinetry and millwork, etc. If you're looking to do mid-level rentals with appliances like Frigidaire or GE, engineered wood flooring or laminate, and the mechanicals are in good shape (electrical, plumbing, HVAC doesn't need to be replaced), you're probably closer to $50 PSF.