All Forum Posts by: Travis Heppe

@Bob Okenwa thanks for the suggestions.  Seems like "cultured marble" bathroom vanity sink tops are going for $150 or so on the cheap end, which should fit the budget.  $80 sounds about right for what to pay for light fixtures.

My current project is a new build-to-rent in Apache Junction, AZ. Median income is currently 25k, vs 31k for USA as a whole (though I believe that demographics will likely push that upwards over time). My units are larger 3 and 4 bdrm townhomes, 1600-1800 sf each, intended to serve families.

With a mid-range construction budget, what items are worth splurging on to get improved rents?  I know it's heavily market-dependent, but here's what I'm thinking... LVP flooring, laminate bathroom countertops/sinks, Amazon for lighting, Home Depot for faucets, toilets, and bath.  In other words, go middle of the road with most things.

Where I'm thinking of spending a little extra is on low-end granite countertops and a fridge with an ice maker.

@David C. did you pull the trigger on solar?  I'm thinking along the same lines as you were 1 year ago, and trying to figure out if it makes sense. 

If I manage to hit my target of $165/sf and average of $2k per month of rent per unit, I'll be pulling in 0.6% of the total cost every month in rent.  With numbers like that, I expect to be only slightly better than break even for cash flow in year 1.  The real magic will happen only after I've held it for a number of years.  It's definitely not a get rich quick scheme.

Both the $165 and $2k numbers are subject to variable market forces, so I need to re-evaluate the market after we get permits.  If the numbers don't look good enough, we'll wait.

@Percy N. Not really. The land is zoned multifamily residential, so there is limited range for what can be done. Guidance from the city is a strong preference for a development that will blend in with the surrounding duplexes. We feel that our project achieves that.

The architect initially advocated for 16 smaller units, but that would have precluded keeping parcels separate, which would have complicated the financing plan.

I'm about $30k in for the soft costs so far. There's a lot more ahead.

Here are updated renders on the project: 

https://photos.app.goo.gl/UZHp...

Yes, the $125-200/sf is all after land purchase.  There will also be additional costs unrelated to construction of the buildings: landscaping, architecture, permit soft costs, land prep.  I'm budgeting $600k for non-construction costs.

@Anna Catron I don't know how to answer your question. We'll get there when we get there. I guess that my best advice would be to leave a very large buffer.  

@Nick Barlow 

The dimensions of the buildings needed to be within some tight tolerances to work around easements, which meant that an off-the shelf design wasn't going to work. Given that, the scale of the project is not large enough to capture any economies of scale for prefab.  We looked into it, and that was where the $250/sf number came from.  We politely declined.

@Cristian Portillo get a good architect.  If you're going to build multiple 4plexes, try to split into separate parcels so that you can qualify for conventional financing.  Good luck!

Any progress?  What steps are you taking to make the goal a reality?