New Construction cost/logistics

9 Replies

Ok, here's the deal. Louisville is still a red hot real estate market especially in the urban core but we've gotten to the point here the best neighborhoods have been gentrified and all the old housing stock has mostly flipped. Louisville took a bit longer because it has such a dense pre 1930 housing stock.

I just bought a couple infill lots and want to develop them. Anyone built multifamily from the ground up? What is the cost in your area for a "Home Depot" grade renovation?

And my main question..how do you go about it? I have a good GC but I worry there's lots of risk and would need to purchase "Builder's Insurance." Can that be bought for a small property like a duplex? Could I, for example, purchase a policy on a duplex I plan to build for like 150k? How much would Builder's Insurance be in general and who sells it?

Folks in Nashville, Denver, and Austin may be of most help here. Louisville is starting to see a nice uptick in infill in what few lots are left in good neighborhoods (Strict preservation city so not many tear downs allowed).  Also, if you are interested in any opportunity here, I am your guy. Besides the fact that our state isn't as sexy, Louisville has all the potential to be the next Nashville or Austin, just more historic and gritty.

your running a bunch of different concepts together.. suggest you really get a little more educated on the subject before just asking for advice on the internet.. we do a ton of infill building each market is different.. and there are about 3 or 4 different insurance products.. so you need to be specific..  

A good insurance broker can help there and a very good trusted GC along with the very all important real estate broker that specializes in new builds.. they will help you design the home and features that are needed to sell.

@Paul Passafiume

You are asking a bunch of questions that can be only answered by talking to a licensed architect and the Building Dept. No offense but lots of GC’s and brokers don’t really understand building codes.

By me all new construction >3family homes need sprinklers, plus 1-2hr fire separation between units, gets costly.

I'm no novice or "rookie" as you guys implied. And no offense to realtors, but I know this market much better than 99% of them. I know what people want and have done several flips. I retain 15 rental units.

I have a trusted GC but we've never done new construction other than taking an old home to studs.

So...when people do new construction, what insurance would you use for a duplex during the construction phase? No one in this market is using fire separation between duplexes and Landlord insurance does not require it.

OK since you are a veteran for insurance its simply a builders risk policy.

@Shawn M.   I understand the architect aspect but I own my plans.. so I only buy them once.

we are not building ultra customs .. although I have in Charleston were I spend 30 to 50k on architect because its what is required in the historic district but other than that 1500 to 2500 to buy stock plans.. pretty simple. 

GC is critical.. and a Good BRoker who specializes in new construction is critical.. unless you yourself are up all the trends.. I rely heavily on brokers.. My wife especially she sells 20 million a year of our homes here in ORegon.. LOL. and what she says goes.. :)

No offense Paul but you say you are not a rookie but you are here asking for advice on BP.  The irony of that.  I think @Jay Hinrichs is the perfect guy to give advice here and you should listen to what he has to say. 

Anytime I jump into an arena which I have no experience in. I find the guy who has the most knowledge and smarter than me and I ask questions and take notes.

@Paul Passafiume I am just completing a ground up duplex. Closing next week on another infill lot and going to build another. Costs in my area for "home depot" per square foot? Excluding land, tap fees, & engineering, etc.: about $135 sq foot. "No one here is doing fire separation" SERIOUSLY?? First of all does Kentucky not follow IRC for their building codes? Secondly - a few layers of sheetrock and a couple of upgraded doors is pretty cheap when we are dealing with people's lives... why wouldn't you want that? @Jay Hinrichs and the others are correct - you need to learn a little more about local code and build a good team. Nothing wrong with your concept. 

Originally posted by @Teri S.:

@Paul Passafiume I am just completing a ground up duplex. Closing next week on another infill lot and going to build another. Costs in my area for "home depot" per square foot? Excluding land, tap fees, & engineering, etc.: about $135 sq foot. "No one here is doing fire separation" SERIOUSLY?? First of all does Kentucky not follow IRC for their building codes? Secondly - a few layers of sheetrock and a couple of upgraded doors is pretty cheap when we are dealing with people's lives... why wouldn't you want that? @Jay Hinrichs and the others are correct - you need to learn a little more about local code and build a good team. Nothing wrong with your concept. 

 in some markets I build in we have to sprinkler the homes because fire flow at the hydrants is not adequate.. in our area you need 1500 gallons per minute at the hydrant sometimes they will over look other areas nope and that will add 6 to 10k per home. 

Plus very very few new duplex or four plex's are built in our market VERY few.. lots of attached SFR product by no multi family that is that small.

@Jay Hinrichs $ @Paul Passafiume yes, in my area part of the planning clearance is a "fire flow form" which assesses the nearest hydrant, density of usage, etc. Because I have done infill projects, generally this is all in place and had already been accommodated for in the street. So I haven't run into a sprinkler issue. Fire separation in side to side units is less expensive than up and down units. 1 hour separation is not terribly difficult to achieve. Building a whole subdivision or a large multi-family would be a different issue when it comes to water. Again, Paul needs to learn about his specific market to judge the financial feasibility. 

Originally posted by @Teri S.:

@Jay Hinrichs $ @Paul Passafiume yes, in my area part of the planning clearance is a "fire flow form" which assesses the nearest hydrant, density of usage, etc. Because I have done infill projects, generally this is all in place and had already been accommodated for in the street. So I haven't run into a sprinkler issue. Fire separation in side to side units is less expensive than up and down units. 1 hour separation is not terribly difficult to achieve. Building a whole subdivision or a large multi-family would be a different issue when it comes to water. Again, Paul needs to learn about his specific market to judge the financial feasibility. 

I built a 100 home project in Lafayette Oregon called Lafayette plantation  and we could not make fire flow.. so I had to run a 12 inch water line almost a mile to tie into our system to make fire flow.. that was maybe 200k back in the day.. so still cheaper than sprinklering the whole project.