Building three Duplexes in the valley, on one taxlot.
My partners and I just broke ground on a 6 unit build. Its been about a year of red tape and other issues, but we finally got it off the ground!
I thought it would be fun to do a thread as we progress through the project and share what we are learning, as this is the biggest project we have done.
So far what we have learned is everything takes longer then expected. The engineering, both structural and civil took months to start due to a backlog of projects. The city approval added even more time. From the financing aspect, I was surprised how simple and easy getting a commercial loan as compared to a personal loan.
Here are some basic numbers. We have a build contract for 1.2 mil. We are financing for around 900k of that, and using cash for the rest. The appraised value upon completion is 1.8. We are building 3 bd 2.5bth units, that will rent for 2000-2200 a month. From a numbers standpoint, it looks really good.
Our current plan is to keep the project, and as such we have the ability to covert the loan over to a 10 over 30 commercial loan.
I will add to this post as the project progresses.
The first foundation is being set up, the contractor sent me this today.
@Jeremie Edwards This is awesome. Look forward to seeing the progress!!
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Real Estate Agent
- 610-703-6173
- http://www.morrowwargo.com
- [email protected]
@Jeremie Edwards Congrats on finally being able to break ground after a year of being held up, hopefully the rest of the project doesn't have any delays! It sounds like the numbers are solid and you have room to operate. I am excited to see the project progress over time and what it looks like upon completion!
Thanks for sharing the numbers and experience so far with your project. Real estate development discussion seems to be relatively scarce here on BP, so this is great. I am planning to implement a similar build-to-rent strategy with my vacant lots in Bend, so this post was informative and encouraging. Please do post updates!