Lot Property Brooklyn New York - build multi family homes

12 Replies

Hello everyone, 

Me and my partner have a 20ft by 120ft lot in Bensonhurst Brooklyn. The zone is z9. It was bought in 2012, for $275,000. The zoning says 6 units can be built on it. It is currently being rented out for parking spots. Any thoughts about building the units on the property. If so, how to start?

Thankyou

Hi Richard,

Couple of questions...

1. Do you own the land free and clear?

2. Do you have an estimate for the costs to build the 6 units?

3. Were you planning on contributing any additional information other than the value of the land?

I'm assuming you don't have any prior development experience. 

Thanks.

A friend of mine purchased a property in Greenpoint about 3 years ago.  He started by getting architectural plans drawn and then getting bids from contractors to get an estimate of how much capital he'd need.  Building is almost finished with 6 units.  

Promotion
Ashcroft Capital
A national multifamily investment firm
Three Reasons Investors May Prefer Real Estate
Read three reasons why investing in real estate private placements may provide several advantages.
Read More Here

@Richard Holzhauer One of my close friends is an architect who designs plans for these types of projects. I'm working with him on a few projects and he breaks it down to a science. He works to maximize the plans as far as space while limiting costs. In Brooklyn, it'll cost about $200 per square foot for the spec build (give or take 10% as a margin of error) which is usually the going rate. If you're looking to build at 1,600 square feet per floor, the project will get you to approximately 960K+ (factor in permits that need to be pulled and designs which will take another 50-100K in NYC depending on who you use).  In the end of the day, it's going to be a million dollar project, where you will need at least $300K raised in order to get the construction loan. Definitely worth it if you have 6 brand new units in Bensonhurst, renting between $2,500-3,000, and generating 15-18K a month. You'll also own a property that will be worth $2.5-3M off the bat. Feel free to message me for more details.

Originally posted by @Eric Schleif :

Hi Richard,

Couple of questions...

1. Do you own the land free and clear?

2. Do you have an estimate for the costs to build the 6 units?

3. Were you planning on contributing any additional information other than the value of the land?

I'm assuming you don't have any prior development experience. 

Thanks.

 yes we own the property free and clear. no we don't have an estimate to build the 6 units. theres no mortgage on it, no tax liens on it, and the taxes are always up to date. thanks!

Originally posted by @Darren Dennis :

A friend of mine purchased a property in Greenpoint about 3 years ago.  He started by getting architectural plans drawn and then getting bids from contractors to get an estimate of how much capital he'd need.  Building is almost finished with 6 units.  

 thanks alot, we appreciate your feedback, do you have any Contractors in mind that are trustworthy that we can contact.

Originally posted by @Solon Stephanou :

@Richard Holzhauer One of my close friends is an architect who designs plans for these types of projects. I'm working with him on a few projects and he breaks it down to a science. He works to maximize the plans as far as space while limiting costs. In Brooklyn, it'll cost about $200 per square foot for the spec build (give or take 10% as a margin of error) which is usually the going rate. If you're looking to build at 1,600 square feet per floor, the project will get you to approximately 960K+ (factor in permits that need to be pulled and designs which will take another 50-100K in NYC depending on who you use).  In the end of the day, it's going to be a million dollar project, where you will need at least $300K raised in order to get the construction loan. Definitely worth it if you have 6 brand new units in Bensonhurst, renting between $2,500-3,000, and generating 15-18K a month. You'll also own a property that will be worth $2.5-3M off the bat. Feel free to message me for more details.

 Thankyou for your input, we spoke to an investor at our local meet up in Staten Island and what he said was very similar to you. Its good hear multiple people the same thing. Would you and your architect be willing to meet us and see the property. if so how can we contact you further. we would love to learn more.

Originally posted by @Daniel Montes :

Get educated first an talk to a few architects it is not easy as it sounds,good luck an post on the project.

 thank you so much. exactly what you say is true. we will do our research and keep you updated. do you have any trustworthy architects and builders ? thank you

Hey Richard - I used to work in NY and we did similar projects. Definitely need to start with an architect to get an idea of zoning and other obstacles you'd need to overcome. My old office would be able to help you, let me know if you want me to pass along contact info. 

Joe

Hi Rich, something came to my mind is that if you tried to build and sell, you might want to consider building a 6 unit condos.  This way, you should be able to sell for a higher per unit cost.  However, if you decided to build and hold, try to get a conservative number on the property taxes.  The property taxes for a new commercial building could get you over $20,000 a year and it might affect your cashflow.  In addition, it might be easier for you to sell your land as it already appreciated.  If you can sell it for 400K, you could use it as down payment to buy a 1.6 Million investment property (asssuming 25% down) or may be two small multi family, etc.  I know its seems fun to build your own building but make sure you run your numbers and see which option work best for you.

Promotion
Innago
Property Management Software
Manage Your Rentals Better For Free. Save Time & Money.
Easily Collect Rent, Screen Tenants, Sign Leases, List Properties, Manage Work Orders, & Much More!
100% Free Try It Now