I am looking to develop multi-family properties in the Phoenix, AZ area. Currently I am in the due diligence stage and looking to get estimates of what it costs to build per square foot. I am planning the structures to be low-end to mid-end
duplexes, triplexes or fourplexes that have a unit size of 900 square feet to 1,000 square.
Any input is appreciated.
Ask contractors, most investors will have a trusted contractor that they will hold onto for dear life because they do quality and affordable work, you will need to find that person who has experience building multifamily properties. You will likely get a lot of high bids, but eventually you should come across someone that has a bid significantly lower than the average retail contractor and can show you examples of their work. I wish you the best of luck. If I had to guess though I'd say about $100 a square foot maybe a bit more, not including land
Another angle is to ask qualified property managers for their referrals to GCs they work with.
Are you finding lots of mulitfamily zoned lots and decent financing? What type of impact/hookup fees does your jurisdiction have?
I'd say around $100 / sf not including land. I have found it harder to find someone to build a four-plex because ADA laws come into play. And a lot of the little guys don't have insurance to build more than a duplex. I'm interested in hearing about what you find out.
Get a local architect, zoning expert and real estate attorney on your team. They will be invaluable.
Many problems using a price per square foot option. Search the forum. It has been discussed several times. It all boils down to the finishes and expected construction composition. Widely varies.
Thanks for the advice everyone. I will keep you updated on my status and experience
I don't want to burst your bubble, but I have been looking in to this in Phoenix for a little over a year.
At first I tried to build on land I already owned, that had an existing fourplex on it. Wells Fargo was the Mortgage holder and sent me a long list of things I had to do in order for them to release it to me.
The second thing I ran in to was most contractors want $150/sqft down here. I specialize in low income housing around South Phoenix, so if I wanted to build a 3000/sqft fourplex I was looking at $300k(Plus other costs) for a building that would bring in maybe $500/month before maintenance costs.
If you have access to people who can see a development project all the through, where it actually brings in decent cashflow let me know.
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