Hello BP Team. I am looking at a project that is a historic building that sits in an Acre and is 8700sf . very walkable to lots of amenities,restaurants,grocery, schools, government offices e t c.
in the past i have remodeled SFH ,renovated industrial builings to retail centers (sizes up to 15000sf)
Project Scope: i am thinking retrofiting and add an addition and have aprox 32 units of apartments with elevator, and finishes stainles appliances,granite tops, study says that target tenants are milenials,retiress and due to proximity to government offices government employees.current rents go for 1bed 900-1000 and for 2 bd 1100-1200 . the sf need for 1 bed is 800sf ( should be able to rent according to the study for $1200)and for the 2 bed is 1200sf( should be able to rent according to the study for $1400)for this area.
14 1 bed x $1000 =$14000 x12=$168,000. year
18 2bed x $1200 =$21600x12=$259,000 year
total yeqarly income $427,000.00 -8%$34,160)vacancy (study says 3% for this area)=$392,840.00 yerly gross income.
using current rents for fast stabilization as the goal is a non recource loan.
i have couple questions that i would greately apreciate your input.
1)is it worth going after tax credits and how do i find more information?
2)how much should engineer,architect fees should cost according to the project overall cost?
3) how much should a complete 1 bed unit cost compared to a 2 bed unit?
4) how much per sf should cost or what guideline to use?there are numbers from $150-$200 per sf.
5) what financial institutions should i look for
6) how much this project should cost overall to make numbers work ?
7) what finishes should i consider in order to attract best tenants
8) how do i choose a top notch Property Manager in order to market the project for leases upon breaking ground?
all feed back is greately appreciated .
We would very much like to talk with you about this project in more detail. All your questions are good ones and the only one I can give you a definite yes/no is regarding tax credits.
If you are talking about LIHTC then my answer is no. Unless the project is in a qualifying location, the cost, time, and restrictions would most likely not be advantageous. If you are talking about historic tax credits, then maybe. If the property is under historic controls, then the additional cost of compliance would make the tax credits attractive. If not under historic control, then getting tax credits needs to be weighed against the cost and hassle of getting the credits. Lastly, if you are talking about energy and other tax credits then most likely yes.
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