Can Multifamily Construction Costs Be Reduced Below $100/sq.ft?

Question

As the title states, are there ways to reduce construction costs below $100/sq.ft for small scale multifamily (10 units or less) while still building a quality product? Quality meaning strong, dry and durable but with lower cost finishes.

Can this be accomplished using workers who are laid off from seasonal work, or laborers who are experienced, but maybe don't want to be grinding away at high volume, quota based work?  For example, occasionally there are guys who left union work because they want don't want to travel, and they pick up odd jobs that allow them to stay close to home.

Sue Hough · Answer

“Balloon” is referred to a style of framing which allows open cavities from the top floor all the way to the basement, eliminating the lumber in between. It was very common prior to 1930 in part due to the fact it allows heat to travel from the lowest floor up when homes were relying on single boilers in the basement or small fireplaces on each floor. It is less expensive, although it’s not allowed in the Chicago market because it does pose a higher spread of fire, due to the fact there’s nothing between each floor preventing the fire moving.

Good luck,

Sue Hough

Good luck,

Sue Hough

Matthew Perimian · Answer

Jason,

I am working on a 36 unit new construction multifamily in Lawrence MA, we were just quoted 135$ a square foot from a large construction company out of RI. To get costs down we chose balloon framing. If you get guys who really know what they are doing you can save a decent about this way but if they mess it up it will be much more costly to fix their mistakes.

Sue Hough · Answer

@William Coet I think our current housing growth would make it very difficult to achieve construction even close to $100 per square foot.  Having been a General Contractor in the Chicago market for over 15 years, we are experience a large labor shortage and the numerous and ever changing tariffs are driving material prices up.  Currently, I am experiencing prices for new residential construction at mid-level finishes with full basements between $180-$240 per sq ft.

Matthew Permian’s prices are a lower due to the number of units and, based on the size, I believe it is a commercial building.  The taller you go with a building the lower the overall square footage costs for the following reasons; the foundation is smaller proportionality to each unit, the roof covers the same square footage irregardless of the amount of floors beneath it, permit costs are less at that level, framing becomes much simpler as well as plumbing.

Please be careful of soliciting workers who are out of work or do not want to put in grinding hours.  There are usually reasons for out of work construction contractors in this climate and they are not good for you.

Good luck,

Sue Hough

Jace Holt · Answer

@William Coet This price varies significantly from market to market. Your going to need to name the specific market the construction is being done. In East Idaho, everyone I have talked to recently is well over $100. In 2017, I had a quote for $83-85 per sq/ft for a very large project that unfortunately did not got through. In 2018 those same building costs went up 15%.

Jason Turgeon · Answer

It would actually be really helpful if people could share their recent quotes/actual costs and regions. One of the hardest parts of this game is trying to figure out how much to budget for various renovations or new construction.

@Sam B. mentioned in his posts about Houston that he could do a cosmetic renovation for $18/sf and full gut for $40/sf.

A very experienced rehabber I was talking to in Boston the other day told me he budgeted $175/sf for his full guts here. My own renovation a couple of years ago that was a partial gut came in over $100/sf and we didn't touch the exterior or HVAC. Not sure how much more to add a completely new structure but site work, foundation, framing, and connections to utilities add up. I can't imagine anyone building a quality product for under $200/sf in this town.

Greg Dickerson · Answer

@William Coet There are a lot of variables that go into construction cost. It’s not just about the labor.

Cost are at all-time highs right now  and seem to be increasing on a regular basis.

To answer your question the scenario you are contemplating is highly unlikely as there is no shortage of work right now.

Best thing to do is talk to multiple general contractors to find out what the costs are in your area and plan for the costs in the budget. Good news is interest rates are at record lows which sort of offset construction cost.

Ken Buck · Answer

Following - we have all the resources to do this modular but haven't gotten to it yet

Jay M. · Answer

Are you sure you meant "balloon"?  That doesn't make sense.  Is this turnkey?

Matthew Stokes · Answer

The best answer to this question is maybe? Like Greg said there are a lot of variables that go into building and each of those variables differ depending on what part of the country you're in, someone in California or Boston reading your post would say $100sqft is impossible. In South East Idaho where I live it would be doable but you would have to do a lot of work and network like crazy, to get the lowest material costs and the lowest labor rates. I have been able to find guys who will do my work as a side job and they offer me a pretty good rate but you need to make sure they meet the quality standards you are looking for.

Can Multifamily Construction Costs Be Reduced Below $100/sq.ft?

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