New Construction Duplex Development

[Amir Castillo]

Hello everyone, 

As last resort I am reaching out to the bigger pockets forum. There isn't much information / YouTube videos on new construction duplex developments. The goal is to build & sell, but worst case scenario maintain the property for a couple of years if it doesn't sell. I have attached a spreadsheet I've created on the following cost of developing a duplex. Currently seeing what has sold in my market, checking rent comps then working the number backwards.Professional input would be appreciated. (Linked for free use as well) Thank you in advance. https://www.icloud.com/numbers/001gDqWRq6WawXhBzkGU0fOpg#Dup...

20%-15% land accusation

50% construction 

25%-30% sweat equity

- Permits 

What is the laundry list of permits needed to to get started with a new construction duplex? 

Architect & Engineering plans 

Rendering 

Surgery 1 & 2 

County permits 

Municipality Utilities District cost

These are the permits I am aware of, but I know there has to be more permits I could be missing. 

Cost Tracker
Lot Purchase Price 20% - 15%
Architect & Engineering Plans
Rendering
Survey 1 (Stake Corners & Elevation Cert)
Surveyor (Final Elevation Cert & Final Survey)
County Permit
Municipality Utilities District
Portable Toilet
Foundation
Silt Fence
Site Work (tree removal / 8in Dirt Scrape)
Concrete Slab
Framing
Lumber
Engineering Wood Products (Trusses)
Accessories & Lumber
Framing Labor $2.5 per sqft
Plumbing
Plumbing Turnkey
Sinks
Toilets
Faucets & Shower Trim
Electrical
Electrical
HVAC
Hvac
Interior
Windows & Material
Back Door
Front Door
Siding, Sheathing & Cornice Material
Siding, Cornice, Doors, Window Labor
Roof
Roof Deck Material
Roof Deck Labor
Standing Seam Metal Roof (optional)
Insulation
Insulation
Drywall
Drywall
Firewall
Hang, Tape, Float & Texture Labor
Drywall Touch Up Labor
Paint
Exterior Paint
Interior Paint
Extra Cost (Caulk & Paint Upgrade)
Carpentry
Door Handles
Cabinets
Interior Doors
Baseboards & Shelving (closets, utilities & Pantry)
Carpentry Labor
Counter Tops
Counter Tops
Mirrors
Mirrors
Garage
Garage Door & Opener
Driveway
Driveway
Flat Work (AC Pad, Walkways, Steps, Backyard Steps)
Tiling
Tile Material
Tile Labor
LVP
LVP Material
LVP Labor
Railing
Railing
Landscaping
Landscape Final grade
SOD
Flower Bed
Dumpster
Dumpster
Appliancese
Dish Washer
Stove
Microwave
Misc
Mail Box
Final Cleaning
House Plan Prints
Water & Electric During build
Refunds / Deposits
Refundable Deposit

[Chris Kersey]

Hey Amir, 

You are right, there isn't many resources out there that teach you how to do ground up development in Houston. It took me almost 2 years of talking with people and researching to push out our first project. I'm still learning everyday but now I Know enough to be dangerous. lol

What area are you looking to build in? The build to sell duplex market is some what saturated in certain areas of Houston causing a real problem for people using lenders to fund their projects. I like that you are open to renting the project out if selling doesn't pan out. 

Feel free to send me a private message with questions. I am a Realtor, RE investor and developer in central Houston (I build Duplexes).

-Chris Kersey 

[Jason Amaya]

Let me know if you need help

[Chris Kersey]

Hey Amir, 

You are right, there isn't many resources out there that teach you how to do ground up development in Houston. It took me almost 2 years of talking with people and researching to push out our first project. I'm still learning everyday but now I Know enough to be dangerous. lol

What area are you looking to build in? The build to sell duplex market is some what saturated in certain areas of Houston causing a real problem for people using lenders to fund their projects. I like that you are open to renting the project out if selling doesn't pan out. 

Feel free to send me a private message with questions. I am a Realtor, RE investor and developer in central Houston (I build Duplexes).

-Chris Kersey 

[Jacob Sherman]

For lending you'll most likely be at 50% of the land 100% of construction upto 65% ARV

[Robert Ellis]

if you can build at 50% of after value I'd hire you and I build the cheapest of anyone I know in our market and minimum rates. there's 3 builders that build at our rate. only place I can get us to 50% equity is in miami florida and that is new construction that is selling at $1000 per square foot and up and high density 300+ unit underwriting with incredible economies of scale. columbus has lower construction costs but lower exit. we focus on urban core. my best suggestion is look at urban not suburban for higher valuations. you can't control what new construction appraises at so do it in less risky areas. 

[Carl Millender]

can you send this spreadsheet to me

[Kenneth Bell]

@Amir Castillo Hello development is what I do for a living. First I want to say congratulations if you commit to development it will be rewarding I promise you. One thing you have done right is to create a strict metric for what a good deal loaoks like. Mine is 20% pad ready land 60% vertical and 20% profit and overhead all based on gross value. Some of the best advice I can give you is to focus as a real estate developer on making a good land deal first and foremost. If you focus on that first, the cost of construction will work out. There is a distinct difference between development and construction. People seem to interchange the words as equal but they are not. Also to make a piece of property able to be developed there are 3 main pillars.

Access

Compliance

Utilities

[Brian Bussey]

where are you wanting to build?

[Brian Bussey]

where are you wanting to build?

[Phil Avery]

Following, as I am also looking into getting into development. Everyone's reply has been very valuable thus far. Much appreciated. 

[Aubrey Ford]

Quote from @Phil Avery:

Following, as I am also looking into getting into development. Everyone's reply has been very valuable thus far. Much appreciated. 

Also Following. I plan to spend the next year or so educating myself on the markets near me and (maybe) do a duplex build to sell or rent. Always need multiple exit strategies right :)