Updated about 10 years ago on . Most recent reply
Building new apartments
Apartment demand and development is surging is some markets, including Texas.
What would be your criteria for developing multi-family? Would the numbers support buy and hold? Or for resale, what profit would you require to move on MF development?
I'm thinking quads, or sets of quads, but am curious about any size deals.
Most Popular Reply
I am a contractor in Lubbock and just ran a model for 30 units (5 bldgs of 6 units) single story (this is popular in Lubbock) My cost to build was about $85-$90/sf (excluding the cost of land). The huge variable is land and if you have to develop the land, or if it's already been platted, had utility hookups run, etc. Obviously, this is on a commercial deal, and so it becomes much more affordable developing if you build more units and spread the development costs over more units. If you're building a 2,3, or 4 plex obviously you're a little more limited on that, but your overall cost are not as great either. If you're in DFW, Austin, SA or Houston your labor costs are cheaper too. So, if you get the land for next to nothing, or maybe talk the land owner to partnering on the deal with you it starts to make a lot more sense.