All Forum Posts by: Milan Mehta

Numbers look great and a great return.  I notice you figured a 30 year loan.  Are you getting a residential or commercial loan?  Commercial loan terms are typically less.  Totally agree with you about deals being hard to come by.

@Mat Zalk It looks like the relevant info has been stated here already, however as an Architect and Developer that have been at both sides of the table, I always suggest to my clients to start with standard AIA contracts.  For your project you are describing, I would recommend starting with A105 Standard Form of Agreement Between Owner and Contractor for a Residential or Small Commercial Project.  (A simple google search will show a sample template) This is a good starting point and you can modify as necessary.

Sounds like I have some trash talking  material for next time!    Thanks for the research @Benjamin Von Blon

Will be there!

Thanks @Dawn Brenengen!  As I am now officially a NC resident, this will be my first meetup!  Looking forward to meeting everyone!

Eric,

I like your model because I do it myself!  I am an architect that also invests and love to build my own work from the ground up.  I am in LA about twice a year and would love to get together next time I'm in town to pick your brain on your strategy.

Depending on your lender, they will appraise and underwrite your loan based on construction drawings.  However, your proforma should include hard costs and soft costs.

Having a 3 bed/1 bath seems odd to me.  Why not 3 bed/2 bath?  It's much more typical.

Too many unknowns related to site, type of construction, location, etc. to comment on construction cost.  $1 mil seems extremely low.  You mention you are demolishing buildings on the site?  This can also add to the cost.  You are not building on a ready lot for example.

Will the units be separately metered?   Typically,  there is a big price tag for this.  Will the tenants pay for the utilities or are they covered in the rent?

@Yvette Alasti I would check with your local permit office to be sure as it varies from state to state, county to county and city to city.  Where I livefor example, you need a permit to move an outlet.  It sounds like you are just replacing what is existing rather then re-laying out the home?  If that's the case, typically you do not need one, however some jurisdictions have provisions to require permit when you pass a certain cost threshold.

As some have already mentioned, it really depends on your jurisdiction.  I am in Maryland where the state and the county I live in are historically ahead of most parts of the country in adopting new codes and environmental regulations.  I have also built homes in central Pennsylvania where the some of the building codes are older and the local jurisdiction are not quick to change to newer codes for various reasons.

As an architect, I would suggest getting a professional helping navigate through this process as the good ones should be familiar with the codes and the permitting process so there are no surprises.

It's great that you are asking these questions and are trying to learn the process.  I strongly recommend spending some time at your local permit office and asking these questions.  You will definitely find out information that will save you time in the future.  Typically if you can describe what you are planning on doing, they can quickly give you info regarding what type of drawings are required, how long the review process typically takes, etc.  They can also let you know if you will need professional engineers as well as an architect to prepare the drawings and also how they calculate fees.