2 story 12-plex versus 3 story 16 plex? FLOOR PLANS?

Question

I am some what new to real estate investing. I currently have a 4-plex and a house I am renting out. I am wanting to expand my real estate in the near future and looking for my best options. Would you guys recommend investing into multiple smaller multi-family buildings (4, 8, or 12 plexes) or consolidating units into one 16-20plex building? My thoughts would be that I get better Cash return on purchased price if I were to purchase a single larger unit complex. Although buliding a 3 story complex would require sprinklers systems, multiple exits, and most likely more code regulations.

Also, does anyone have a good website that offers floor plans for 12-20 plexes?

Paul Choi · Answer

The cost of building these days is extremely expensive.  you have to look at what it costs for the hard and soft costs (plans/permits/engineering and materials/labor) plus the cost of the land.  It will probably be more expensive per square foot and per unit than buying existing.  China and India are gobbling up alot of construction materials, pushing prices up and with low unemployment, contractors are charging higher rates.  All ingredients for higher price per square foot when building new.

When deciding whether to buy an existing 4 unit, 12, 16, 20 or whatever, break it down to the unit level.  How much can the unit be bought for ($40k/unit, $90k/unit, etc.).  Figure out the average monthly rent for that unit, take out 35-40% in expenses, then subtract out debt and that's your cash flow.

Then calculate the total cash flow annually for that property and plug in your downpay cash in and initial rehab done if any and you will get your cash on cash roi.  This is simple watered down way to do it but at least it gives you a idea quickly on the profitability of the asset.

Thirumal Kunati · Answer

I own .41 acres B1 Zoned lot in Winchester VA, looking to build 2 stories 12 unit Apartment/Multi-family house.

I tried online for stock plans but did not find, can anyone please suggest me where can I find similar plans?

Karen Margrave · Answer

I think you're better off not going the 3 stories, due the added cost involved, and probably not as attractive to tenants.

Anthony G · Answer

Most of the bigger complexes (over 4 or 6) are just sets of 4-units or 6-units next to eachother.  Some even have fire walls between them.   So you could look at plans for those and just build a few of them right next to eachother.  The exception would be buildings taller than 3-stories.

Casey Marley · Answer

There are not many buying options for the size of plexes I'm looking for in this area.  Because of that, I was looking at construction rather than buying existing structure.  I have an option to purchase property from a relative so I am getting a great price on the lot compared to others in the area (1 acre is going for 150k in some areas, I would be receiving 2.5 acres for 60k).  It is located dead center of Wasilla, AK which is one of the fastest growing cities in the nation.  I would plan on eventually building 2-3 plexes on this lot if I were to go the construction route.

The majority of buying options here in AK are 4 plexes built in the 80's or older.  If i were to go this route, my concerns would be the overall cost of purchasing several buildings (cheaper to buy one 16 plex rather than four 4-plexes) the upcoming maintenance costs.

Sounding like I should be patient and wait for some larger complexes to sell?  Anyone else have the same experience as Ryan to buying old versus building new?

I have google'd plexes and any similar key wordsi could think of, not finding many options for around the 16 plex range, finding mostly 4-6plex floor designs.

Ryan M. · Answer

Are we buying a existing building or building a new one?

Even if someone gave me a buildable, zoned lot I wouldn't build. We can buy in some cases 50 cents on the dollar than what it would cost to build a new like frame building. I see your from Alaska so maybe the availability isn't good on existing locations.

Karen Margrave · Answer

You can do a google search for "plexes". There's so much that would go into answering you, depending on your local market. Obviously it depends on the type of project you would be developing, location, quality, etc.

2 story 12-plex versus 3 story 16 plex? FLOOR PLANS?

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