My cousins and I own 2 lots. One has my grandmothers house that needs to be torn down and the other is land. I have to come up with a business plan for a multi-family, 3-4 unit. I also need to find the funds to get this done. Any guidance on how to get started with the process and things I need to look for or know would be helpful. Would this be a good cash flow opportunity? This could possibly be a VA loan but I'm trying to figure out the best direction for me to go in with no money starting out.
@Tuesda Cook you should start networking with local real estate pros who are doing deals and developing. It seems like you’d benefit greatly by partnering with someone who has a lot of experience so you can learn from them with your first deal. Good luck.
@Danny Randazzo great advice! I am starting to go to events. Thank you!
@Tuesda Cook awesome!
A builder can help out with a lot of these questions. You'll need to check the zoning, get plans approved, identify utility and sewer hookups, hire subs, etc. Are you trying to build this yourself or hire someone?
I agree with @Frank Geiger talk to a local builder and/or even better an architect who has experience with Multifamily in the area. They should be able to help you determine how much you square footage you can build on the lots. Then you need to decide how big your units will be to determine how many units you will build. You will need to research your market and decide which type of product has the most demand. I.e. beds/baths, type of finishes, amenities, upgrades etc. From there you can run your proforma/underwriting just like a standard multifamily purchase.
When underwriting you may be able to reduce standard maintenance and cap ex reserves a bit due to dealing with a brand new product.
I know in my local area basic multifamily construction starts around $100/SF. Check with your local builders to see what the cost is near you.