Multifamily Construction- Fourplex

18 Replies

I’m wondering if anyone on here is building small multifamily? 

My hometown outside of Houston has been growing for the past ten years and is going to grow even more when a major highway is complete. There are 3 small apartment complexes here but very few other multifamily renting options. 

Can anyone’s help with the average cost per square foot to build a four plex?

Is this a horrible idea?

@Jim Hiler Thanks I’ll check that out tonight. I’ve been driving for dollars and see a new multifamily every now and again. Somebody is out here doing it.

try googleing fourflex investment group they build in houston

@Forrest Holt   Keep me updated....

Jim Hiler, Developer in Florida (#CGC1523624)

@Michael P. Thanks. Glad to see people are actually building them. I’ll check them out this evening.

Following! Interested as well. I see that the few multifamilies that do come on the market in Houston were built in the 1930s....

If there were new small multifamily properties built are there any investors here that would want to buy them? My partner and I are looking into building some in the Alvin, TX area where there is a shortage of rental properties.

You'd probably be sold out pre-construction.  I would buy.

This post has been removed.

Originally posted by @Michael P. :

You'd probably be sold out pre-construction.  I would buy.

 Have you considered the I-35 Corridor between San Antonio and Austin? There is a duplex new construction development in New Braunfels as well as a development in Buda TX, just south of Austin.  Let me know if you would like some info.  

Sterling Williams, Real Estate Agent in TX (#682359)

A few thoughts come to mind here for me: with abundant land cheaply available, isn't any new build along the corridor undercut by the next newer build a year later?

I often wonder who is the fourplex renter, the person who doesn't want a SFH for same price but more homey feel, or the person who wants closer neighbors and apartment renter vibe but without social buzz or amenities of apartment. It feels like a vehicle more for owners than renters.

Which brings me last concern: if the cost is almost 4x SFH, this would seem to mandate partner involvement for many newish investors, in which case, why not just solo purchase duplex?

This is just my devil's advocate assessment, not pessimistic don't ever buy real estate table talk. No haters, please! Just asking the questions I think a shrewed buyer or renter would...

I would think it would be somewhere between $85 and $120 a square depending on the upgrades. @Forrest Holt , did you ever find out? @Jeffrey Nordin , where is the abundant, cheap land? 

@Nicholas Miller, it's in Texas It's all relative, of course but the basic premise remains. Texas is one of the few places that still builds starter homes, you can't even really find them here in CA, the cost to break ground is too prohibitively expensive. While SA corridor is no desert, it's certainly not constrained by space or forest or old service lines like a New England or urban CA city. Relative to many places, Texas has abundant cheap land, which is still desirable unlike abundant cheap land in Mississippi, for example. No disrespect, but the jobs aren't flooding into that locale.
Originally posted by @Jeffrey Nordin :
@Nicholas Miller, it's in Texas

It's all relative, of course but the basic premise remains. Texas is one of the few places that still builds starter homes, you can't even really find them here in CA, the cost to break ground is too prohibitively expensive.

While SA corridor is no desert, it's certainly not constrained by space or forest or old service lines like a New England or urban CA city.

Relative to many places, Texas has abundant cheap land, which is still desirable unlike abundant cheap land in Mississippi, for example. No disrespect, but the jobs aren't flooding into that locale.

 A starter home in California is called a condo. ;-) Jobs aren't flooding into Mississippi but there is a nice trickle right now. Unemployment is at 4.6% which is phenomenal for Mississippi. A tire factory is being built near where I live. But at least here in Jackson, there are still plenty of existing housing available, so building new units doesn't make much sense. 

Hi Jeff, Insightful comments. I think buying 4plex , living in one and rent out rest can quickly building up wealth. You can only put down less than 5 percent.

Originally posted by @Jeffrey Nordin :

A few thoughts come to mind here for me: with abundant land cheaply available, isn't any new build along the corridor undercut by the next newer build a year later?

I often wonder who is the fourplex renter, the person who doesn't want a SFH for same price but more homey feel, or the person who wants closer neighbors and apartment renter vibe but without social buzz or amenities of apartment. It feels like a vehicle more for owners than renters.

Which brings me last concern: if the cost is almost 4x SFH, this would seem to mandate partner involvement for many newish investors, in which case, why not just solo purchase duplex?

This is just my devil's advocate assessment, not pessimistic don't ever buy real estate table talk. No haters, please! Just asking the questions I think a shrewed buyer or renter would...

Thanks @Mike Chern, I certainly agree that any loan vehicle that allows 3.5% down vs 25% down is better. I guess my other questions were not welcome on the forum. Getting a little Facebook-y on here...

@Nicholas Miller talked to some people and it’s averaging 120-150. I’ve seen really nice designs but I’m looking for more conservative builds. Finding a good deal on land seems to be the most important aspect

That is absolutely key. The only way to make money on new construction is finding cheap land. What I am trying to do is find a property with an Assett on it already. Example would be a house on 3 acres. I would rehab and sell the house with 1/4 acre for the amount I paid for the entire property. Now you have remainder property free to build on. Something along those lines. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.