Looking for Feedback on a MFH Construction

[Harish Nandipati]

Hello Every one,

I am planning a 15 Unit MFH in Tucson Arizona . I already acquired the land and taking bids from Civil engineering, Architects and Builders.

I am trying to get this project done under 90$/sft to be Competitive in the market. I am hoping to spend 10 to 15% in Soft costs, 10 to 15% in Closing, Financing and Appraisal, 40 to 50% in Hard costs. 20 to 25% will be the equity that i would like to have by the time its done. Please advice me whether is this some thing that i can get in the current market. Some of the builders i talked to told me that getting it done for 90$ is not unreasonable but i don't have lot of trust on the builders.  Could you guys please also advice me what i should spend on Engineering costs

Civil Engineering and Architectural ?

Any input is greatly appreciated

[Jon Anderson]

Harish,

I’m a local Tucsonan that’s very involved in the residential RE market. When you say $90/sf. Is that hard or does it include soft costs?  Then is your dirt in that number?  What kind of units / buildings are you thinking of?  Do you have any special entitlements you need to do, a.k.a. An FLD or rezoning?   Is it in the city of Tucson or Pima County (or worse Oro Valley). You may be in for 6 mo to a year for entitlements. Then you’ll have construction. Are you a licensed GC or are you going out to bid? Bidding can run concurrently with the DP. Civil engineers are loaded with work as well as architects, contractors and subs.  It’s a scary time for containing costs right now. In the last month lumber bumped 14% on one of my clients. And he has HUGE buying power. Good news is by the time you get started in construction, numbers will probably be coming back to earth. 

Jon