I Would like information about cost of new construction.

[John Grinston]

Im looking into building a multiunit in my area.I would like to know what a good price to expect per square footage for a simple build.

[Karen Margrave]

Try to find some builders that are active in the area and talk to them. Materials costs are so high right now, and labor, that it's not even feasible to build new construction in CA unless you're a big builder. I'm sure your area is much lower. Good luck. 

[Chris Seveney]

@John Grinston

Speak to people who would be building it - cost to build changes quickly in todays world do to supply chain issues - also get an understanding for how much time it would take as well

[Eliott Elias]

Call up builders in your area and ask what they're paying for new construction right now

[John Grinston]

The realtor that I'm working with said that I would need an approval letter prior to getting prices.Do you all think its possible to talk prices before being approved.I don't want to start funding only to find out that the construction price is out of my budget.

[Julie Nealey]

Hello John, 

What is your background and area you are looking to build? Do you already own the land?

[Julie Nealey]

I ask because to develop, price per sq ft is only a small portion of the capital needed to bring a development to fruition. 

[John Grinston]

Quote from @Julie Nealey:

Hello John, 

What is your background and area you are looking to build? Do you already own the land?

 Thanks for the response.This will be my second purchase.I plan you use my Va loan and other funds I have.I’m in the  Virginia Hampton Roads area.

[Julie Nealey]

Quote from @John Grinston:

Quote from @Julie Nealey:

Hello John, 

What is your background and area you are looking to build? Do you already own the land?

 Thanks for the response.This will be my second purchase.I plan you use my Va loan and other funds I have.I’m in the  Virginia Hampton Roads area.

 So you have developed before, so you know all the expenses that come with it. I am from Washington State and we our price per sq ft is right around 275.00 for standard, I imagine your cost is different. Good luck!!!

[Patti Robertson]

Hi there.  I'm also in Hampton Roads and an investor.  I hate to be discouraging, but I'm not sure this will be as easy as you think. Norfolk is strict on zoning so first you will have to find a lot in a neighborhood that will allow for your multi.  I've been working on one myself and we had a lot in a neighborhood that allows multis and is really deep.  The city said my lot isn't wide enough for what they will allow, although it is wide enough for a single family.  We got luck and the house next door went up for sale, so we bought it.  A lot of ducks need to be in a row to accomplish your goal.  I'm not saying it's not possible, but am just suggesting you also look for buildings that are already build that you can buy. Not only will your numbers look better, it will be much easier to achieve.

[Mike Wood]

@John Grinston If you are planning on trying to use the VA to fund a new construction house, you would need to find a lender that will do that. While the is a VA construction loan program, for all the people I have talked to, they are impossible to find. Generally construction loans are very capital intensive, generally needing 25% of total costs, and are not easy loans to qualify for, especially if you dont have any building experience. You may be able to find local banks that will do construction loans on a single family residence you plan on living in with lower down payment/capital, but not multifamily.

To use ball park numbers, I would say $125-175/ft2 is likely the lower end of the market for construction costs in your area, not including land and finance/soft costs.  Local general contractors will be able to give you ball parks, but they would be very general with wide ranges.  For specific pricing, you would have to have building plans and location determined.

I see zero value in working with a realtor on a new construction.  They wont have any experience in it and wont really have a good way to get paid for their time (contractors aren't likely to pay there commissions).  

[Barry Ruby]

@Julie Nealey Julie I am a ground up developer and I run a lot of pro forma analysis.

With rare exception, hard cost alone (not including site work) typically comes in at ~70% of total project cost.

It absolutely pays to perform early due diligence to determine hard cost.

[Barry Ruby]

@John Grinston along with reaching out to local builders that are actively doing similar product, running a residual analysis can be very helpful.

Send me a DM and I’ll send you a workbook that will let you do this kind of analysis.

[John Grinston]

Quote from @Patti Robertson:

Hi there.  I'm also in Hampton Roads and an investor.  I hate to be discouraging, but I'm not sure this will be as easy as you think. Norfolk is strict on zoning so first you will have to find a lot in a neighborhood that will allow for your multi.  I've been working on one myself and we had a lot in a neighborhood that allows multis and is really deep.  The city said my lot isn't wide enough for what they will allow, although it is wide enough for a single family.  We got luck and the house next door went up for sale, so we bought it.  A lot of ducks need to be in a row to accomplish your goal.  I'm not saying it's not possible, but am just suggesting you also look for buildings that are already build that you can buy. Not only will your numbers look better, it will be much easier to achieve.

Thanks ,I’m looking in the Williamsburg area.There’s tons of multi units for sale in Norfolk but not in Williamsburg.Does Williamsburg changed anything?

[John Grinston]

Quote from @John Grinston:

Quote from @Patti Robertson:

Hi there.  I'm also in Hampton Roads and an investor.  I hate to be discouraging, but I'm not sure this will be as easy as you think. Norfolk is strict on zoning so first you will have to find a lot in a neighborhood that will allow for your multi.  I've been working on one myself and we had a lot in a neighborhood that allows multis and is really deep.  The city said my lot isn't wide enough for what they will allow, although it is wide enough for a single family.  We got luck and the house next door went up for sale, so we bought it.  A lot of ducks need to be in a row to accomplish your goal.  I'm not saying it's not possible, but am just suggesting you also look for buildings that are already build that you can buy. Not only will your numbers look better, it will be much easier to achieve.

Thanks ,I’m looking in the Williamsburg area.There’s tons of multi units for sale in Norfolk but not in Williamsburg.Does Williamsburg changed anything?

I don’t expect it to be an easy process at all.What builders did you go with ? 

[John Grinston]

Quote from @Mike Wood:

@John Grinston If you are planning on trying to use the VA to fund a new construction house, you would need to find a lender that will do that. While the is a VA construction loan program, for all the people I have talked to, they are impossible to find. Generally construction loans are very capital intensive, generally needing 25% of total costs, and are not easy loans to qualify for, especially if you dont have any building experience. You may be able to find local banks that will do construction loans on a single family residence you plan on living in with lower down payment/capital, but not multifamily.

To use ball park numbers, I would say $125-175/ft2 is likely the lower end of the market for construction costs in your area, not including land and finance/soft costs.  Local general contractors will be able to give you ball parks, but they would be very general with wide ranges.  For specific pricing, you would have to have building plans and location determined.

I see zero value in working with a realtor on a new construction.  They wont have any experience in it and wont really have a good way to get paid for their time (contractors aren't likely to pay there commissions).  

Thanks for all the information, I’ve found a lender and I also have the money to put down.You’re saying I should just work directly with the builder and lender ? 

[Isaac S.]

Do yourself a favor and buy a value add apartment building....good luck!

[Julie Nealey]

Quote from @Barry Ruby:

@Julie Nealey Julie I am a ground up developer and I run a lot of pro forma analysis.

With rare exception, hard cost alone (not including site work) typically comes in at ~70% of total project cost.

It absolutely pays to perform early due diligence to determine hard cost.

I completely agree, 100%. Because I am fairly new to this, I am curious if you have any workbooks or pro forma template for mixed use development to help me to more fully analyze a project? Thank you so much. Mad respect for ground up developers. 

[Richard Boyd]

Quote from @John Grinston:

Quote from @Patti Robertson:

Hi there.  I'm also in Hampton Roads and an investor.  I hate to be discouraging, but I'm not sure this will be as easy as you think. Norfolk is strict on zoning so first you will have to find a lot in a neighborhood that will allow for your multi.  I've been working on one myself and we had a lot in a neighborhood that allows multis and is really deep.  The city said my lot isn't wide enough for what they will allow, although it is wide enough for a single family.  We got luck and the house next door went up for sale, so we bought it.  A lot of ducks need to be in a row to accomplish your goal.  I'm not saying it's not possible, but am just suggesting you also look for buildings that are already build that you can buy. Not only will your numbers look better, it will be much easier to achieve.

Thanks ,I’m looking in the Williamsburg area.There’s tons of multi units for sale in Norfolk but not in Williamsburg.Does Williamsburg changed anything?

 Hey John, I am the CFO for a few construction companies. One in the Williamsburg area. 

As many people mentioned developing a multifamily unit is a lengthy and expensive project and doing so with your VA loan might be difficult but there are some things you can do now to get a better understanding of your project. @Barry Ruby mentioned running a pro forma analysis to estimate the total project costs. Have you thought about buying a multifamily unit that would certainly save you time?

[John Grinston]

Quote from @Richard Boyd:

Quote from @John Grinston:

Quote from @Patti Robertson:

Hi there.  I'm also in Hampton Roads and an investor.  I hate to be discouraging, but I'm not sure this will be as easy as you think. Norfolk is strict on zoning so first you will have to find a lot in a neighborhood that will allow for your multi.  I've been working on one myself and we had a lot in a neighborhood that allows multis and is really deep.  The city said my lot isn't wide enough for what they will allow, although it is wide enough for a single family.  We got luck and the house next door went up for sale, so we bought it.  A lot of ducks need to be in a row to accomplish your goal.  I'm not saying it's not possible, but am just suggesting you also look for buildings that are already build that you can buy. Not only will your numbers look better, it will be much easier to achieve.

Thanks ,I’m looking in the Williamsburg area.There’s tons of multi units for sale in Norfolk but not in Williamsburg.Does Williamsburg changed anything?

 Hey John, I am the CFO for a few construction companies. One in the Williamsburg area. 

As many people mentioned developing a multifamily unit is a lengthy and expensive project and doing so with your VA loan might be difficult but there are some things you can do now to get a better understanding of your project. @Barry Ruby mentioned running a pro forma analysis to estimate the total project costs. Have you thought about buying a multifamily unit that would certainly save you time?

 Thanks for the information. I would much rather purchase an existing one in the area. I haven't seen a single mf on the market, what do you suggest?

[Richard Boyd]

Quote from @John Grinston:

Quote from @Patti Robertson:

Hi there.  I'm also in Hampton Roads and an investor.  I hate to be discouraging, but I'm not sure this will be as easy as you think. Norfolk is strict on zoning so first you will have to find a lot in a neighborhood that will allow for your multi.  I've been working on one myself and we had a lot in a neighborhood that allows multis and is really deep.  The city said my lot isn't wide enough for what they will allow, although it is wide enough for a single family.  We got luck and the house next door went up for sale, so we bought it.  A lot of ducks need to be in a row to accomplish your goal.  I'm not saying it's not possible, but am just suggesting you also look for buildings that are already build that you can buy. Not only will your numbers look better, it will be much easier to achieve.

Thanks ,I’m looking in the Williamsburg area.There’s tons of multi units for sale in Norfolk but not in Williamsburg.Does Williamsburg changed anything?

 Hey John, I am the CFO for a few construction companies. One in the Williamsburg area. 

As many people mentioned developing a multifamily unit is a lengthy and expensive project and doing so with your VA loan might be difficult but there are some things you can do now to get a better understanding of your project. @Barry Ruby mentioned running a pro forma analysis to estimate the total project costs. Have you thought about buying a multifamily unit that would certainly save you time?

I would recommend trying to buy them off market. Shoot me a DM and we can talk more about what you are looking for.

[Cindy M.]

We have a few ground up development projects in the works and finally getting approvals on them.  It is discouraging because the build price is still high and we had a some initial quotes prior and it is no where we thought we would be.  Excited to actually build but need to get good GC's and have them sharpening their pencils.. still trying to work through it..

From what I have learned, it is not worth to to do ground up construction on small projects now with costs being high. Especially on small single family lots.  Possibly high end homes or large developments.  Otherwise, purchase existing and flip/rehab etc.. as prices are slowly dropping...