New Construction Philadelphia Duplex Video and Numbers!

8 Replies

Here's a video walk through of a new construction duplex in the West Kensington neighborhood of Philadelphia I recently completed and got leased up. I sourced the lot on the MLS, took the project through architecture, zoning, and permitting, then GC'ed the build myself. The lower unit rented for $1800 and the upper unit for $1900. ARV is $550k on the low end and up to $600k in this crazy market. Depending on appraisal this project will come close to if not fully cash out. It has a 10 year tax abatement so in essence you only pay taxes on the land, not the improvements, for the next 10 years.

Video Walk Through of Upper Unit

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Originally posted by @Jibu V. :

@Troy Sheets

Looks awesome. Love the rooftop deck. Could you share your numbers on this?

Thank you! As far as sharing numbers, I mainly work with out-of-state passive investor partners on most of my deals and unfortunately I’m not sure they’d be comfortable if I shared much more. I can say I try and purchase my lots at around $30k/unit but depending on the area I can sometimes get them for less, or if it's a corner lot, I may go as high as $40k-$45k/unit. Higher projected rents let you pay more for lots, corners get you slightly better units, more light, more lot coverage so I can pay a bit more for them, however they also cost more to build due to more windows, more siding, more sq footage to build due to more lot coverage, etc. You have to weigh all those factors and many more to figure out what you can pay. There are lots in some areas that even if you got them for free you'd lose money as the rents would never cover your development and construction costs.

@Troy Sheets Great project man, that area along American st. has been blowing up the past year with a ton of commercial development and new constructions popping up all over the place. 

Nice project! Sounds like it worked out well for you. Mind sharing what the total hard costs ended up looking like with all the material cost increases? 

Nice project! Sounds like it worked out well for you. Mind sharing what the total hard costs ended up looking like with all the material cost increases?

Originally posted by @Steven K. :

Nice project! Sounds like it worked out well for you. Mind sharing what the total hard costs ended up looking like with all the material cost increases?

Probably 20% increase in hard costs. Painful but in the areas I buy in they've got plenty of room to grow in both rents and ARV, which even with Covid delays and increased costs, I still landed better than initial projections. I was running my rent comps at around $1550/unit and got $1800 and $1900 per unit. Projected ARV was $500k and we're at least at $550k, perhaps with the right appraiser on the right day we could get closer to $600k ARV. Still waiting on the appraisal for refi on this one.

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