New Construction Multifamily / Apartment in Dallas
Specialist · Dallas, TX · Member since 2010 · 511 posts · 252 votes
Hi,
I am planning multifamily / apartment construction in Dallas Metroplex.
Here is my planning, let me know your suggestions and recommendations...
Please message me if you build similar project in past and like to discuss.
Thank you
@Greg Dickerson Thank you Greg for your insight.
We have few lands sorted out. Need to decide best one based on other due diligence.
Yes, we need site work, permits, utilities etc.
We are planning Class B construction.
In that case here's a brief summary of the process. First step would be to get the property under contract contingent upon getting all entitlements for what you want to build. You do not want to close on the land until you have all your approvals to build what you want.
Once you have control of the property you begin the feasibility and due diligence process. You determine highest and best use by analyzing the market and by talking to realtors, property management companies, appraisers, builders and developers in the area.
Next step is to do a quick feasibility analysis to determine if the project will work financially. You do this by calculating the NOI to help determine value and work backwards. You also need to look at the comps as well to validate your assumptions. Start with the potential gross income then subtract the operating costs to determine NOI, divide that by the CAP rate in your area to give you the value, then subtract development costs, building costs, commissions and interest expense. You want at least a 30% margin above costs and the NOI needs to be enough to pay the debt service after stabilization and then some.
If the project looks feasible from a financial standpoint the next step is to check with the city or county planning and zoning department to get an idea if your concept will work, if you can build what you would like to build and what is required for all approvals including site plan, building permits, proffers, water/sewer tap fees, bonding requirements, inspections, setbacks, lot coverages, parking requirements, height restrictions, C/O process and time frame for all approvals.
You also need to check with the utility companies and get an idea of availability and cost estimates from them for water, sewer, power, gas, cable, installation and connection requirements, tap fees, hookup charges, transformer location and relocation, power line and power pole relocation issues. Check to see if you have to install any manholes, fire hydrants, curb, gutter, sidewalks, street signs, street lighting any specific street design or access requirements, Check DOT requirements for access, stop lights and permits, traffic studies, DWQ requirements for permits, permit fees and time frames.
Once you have an idea of what you can build and what is required in terms of permitting and infrastructure you want to talk to some civil engineers, architects and commercial general contractors that do the type of projects and build the type of buildings you want to build so you can get an idea of costs, time frame and requirements.
This is a brief and broad overview of how the development process works what's required before you get too far down the road or purchase a property.
@Mark Allen, I am agree with you, I am interviewing multiple GC and planning to partner up with GC and/or other experienced investor. Please let me know if you know someone in DFW area.
I am planning to phase out, will build more units in phase 2.
What is your opinion on number of units that can be good start if I decide to go bigger and partner up with other experienced investors?
What are Pros and Cons of developing Multiple Fourplexes or Town Homes development project compare to Garden style apartment?
You do not have to partner you just need the right team. If you want to panther make sure you find a partner with experience.
4 unit and townhomes can be good as well. Easier and faster in some cases. You need to run the numbers to determine the best cost to net income ratio and let that guide you. You also need to compare to existing properties as you may be able to purchase an existing building cheaper than you can build.
@Greg Dickerson
All that knowledge, I wish I had known you 20 years ago, now I feel to old to take on something like this. Lol
Yes me too! It’s never too late.
Awesome back and forth. Any more information @Shital Thakkar ?
I think coming here and knowing that you would be getting some tough input and willing to humble yourself is a great step forward. I can’t wait to hear how far along you are. As we speak I’m so ready to start something like this is SA TX. I would personally go the single home route. keep us posted.
@Estrella Carolina Mckinney, Here is update...
One change in previous plan is going within DFW city limit, rent range is higher that can increase NOI significantly and overall value.
SA TX is great market, specially 35 corridor between SA and Austin...
Feel free to message and we can discuss on more details...
How is your project doing? How far are you with the construction?
@Greg Dickerson @Srini Karanam From the units we are currently building- Your price of $100 a foot may be off- but I am using the costs from building in Oregon. All in cost w/ land/loan/hard and soft costs come in at $145-170 a foot for your standard meat and potatoes apartments. Would love to see the break down of where your costs are coming from- Here is what it looks like for a 18 flex: From 2017 Notice you do not see land costs in there. Wow is it expensive to build- With your price in TX- I wonder if I am getting ripped off? This is from 2017- prices are at least %10 more now
| DESCRIPTION | ESTIMATE | Add 3% | Adjusted |
| 3655 Pleasant View Apartments | 12% | ||
| BUILDING PERMITS | $56,000.00 | $6,720.00 | $62,720.00 |
| ELECTRICAL DEVELOPMENT | $3,700.00 | $444.00 | $4,144.00 |
| UTILITIES/TEMP POLE | $5,000.00 | $600.00 | $5,600.00 |
| EXCAVATION | $350,000.00 | $42,000.00 | $392,000.00 |
| RETAINING WALLS | $0.00 | $0.00 | |
| CONCRETE PUMP | $1,500.00 | $180.00 | $1,680.00 |
| CONCRETE | $10,000.00 | $1,200.00 | $11,200.00 |
| FOUNDATION/CONCRETE-LABOR | $16,100.00 | $1,932.00 | $18,032.00 |
| CONCRETE CUTTING | $500.00 | $60.00 | $560.00 |
| TESTING/CONSTRUCTION STAKING | $0.00 | $0.00 | |
| ASPHALT | $40,000.00 | $4,800.00 | $44,800.00 |
| CONCRETE FLAT WORK | $14,000.00 | $1,680.00 | $15,680.00 |
| FRAMING LABOR | $80,000.00 | $9,600.00 | $89,600.00 |
| ROOF TRUSSES | $15,000.00 | $1,800.00 | $16,800.00 |
| BUILDING MATERIALS | $150,000.00 | $18,000.00 | $168,000.00 |
| WINDOWS & SKYLIGHTS | $14,000.00 | $1,680.00 | $15,680.00 |
| EXTERIOR DOORS | $24,677.83 | $2,961.34 | $27,639.17 |
| ROOF COVER | $17,000.00 | $2,040.00 | $19,040.00 |
| STAIRS | $40,000.00 | $4,800.00 | $44,800.00 |
| SIDING LABOR | $44,000.00 | $5,280.00 | $49,280.00 |
| GARAGE DOOR | $0.00 | $0.00 | |
| GUTTERS | $3,200.00 | $384.00 | $3,584.00 |
| PLUMBING | $60,000.00 | $7,200.00 | $67,200.00 |
| FIRE | $50,000.00 | $6,000.00 | $56,000.00 |
| HEATING | $15,000.00 | $1,800.00 | $16,800.00 |
| AIR CONDITIONING | $25,000.00 | $3,000.00 | $28,000.00 |
| ELECTRICAL | $110,000.00 | $13,200.00 | $123,200.00 |
| MASONRY | $0.00 | $0.00 | |
| INSULATION | $20,849.00 | $2,501.88 | $23,350.88 |
| SHEET ROCK | $85,000.00 | $10,200.00 | $95,200.00 |
| INTERIOR TRIM | $22,000.00 | $2,640.00 | $24,640.00 |
| TRIM LABOR | $20,000.00 | $2,400.00 | $22,400.00 |
| CLOSETS | $4,000.00 | $480.00 | $4,480.00 |
| FINISH HARDWARE | $9,000.00 | $1,080.00 | $10,080.00 |
| UNDERLAY LABOR | $14,151.00 | $1,698.12 | $15,849.12 |
| CABINETS | $34,000.00 | $4,080.00 | $38,080.00 |
| COUNTERTOPS | $20,000.00 | $2,400.00 | $22,400.00 |
| BLINDS | $2,000.00 | $240.00 | $2,240.00 |
| TILE | $0.00 | $0.00 | |
| TILE LABOR | $0.00 | $0.00 | |
| MAIL BOXES | $2,500.00 | $300.00 | $2,800.00 |
| PAINTING | $41,000.00 | $4,920.00 | $45,920.00 |
| CARPET | $9,258.00 | $1,110.96 | $10,368.96 |
| HARDWOOD FLOORS | $22,000.00 | $2,640.00 | $24,640.00 |
| KITCHEN APPLIANCES | $48,616.60 | $5,833.99 | $54,450.59 |
| LIGHTS | $8,500.00 | $1,020.00 | $9,520.00 |
| MIRRORS | $3,000.00 | $360.00 | $3,360.00 |
| FINAL CLEANING | $4,000.00 | $480.00 | $4,480.00 |
| PICK UP. GARBAGE | $5,000.00 | $600.00 | $5,600.00 |
| LANDSCAPING | $16,000.00 | $1,920.00 | $17,920.00 |
| DECKS | $9,600.00 | $1,152.00 | $10,752.00 |
| FENCE/TEMP FENCE | $24,000.00 | $2,880.00 | $26,880.00 |
| MISC. PICK UP LABOR | $17,000.00 | $2,040.00 | $19,040.00 |
| JOB TOILET | $1,200.00 | $144.00 | $1,344.00 |
| ARCHITECTURAL AND ENGINEERING | $41,525.62 | $4,983.07 | $46,508.69 |
| RENTALS | $10,000.00 | $1,200.00 | $11,200.00 |
| TRAILER/STORAGE/SECURITY | $0.00 | $0.00 | |
| TRASH ENCLOSURE | $0.00 | $0.00 | |
| SURVEYING | $3,000.00 | $360.00 | $3,360.00 |
| SUPERVISION - 12 MTHS | $56,000.00 | $6,720.00 | $62,720.00 |
| FIRE INSURANCE | $1,500.00 | $180.00 | $1,680.00 |
| LIABILITY INSURANCE | $15,000.00 | $1,800.00 | $16,800.00 |
| FIRE ALARM | $5,000.00 | $600.00 | $5,600.00 |
| SUBDIVISION 10 lots | $5,000.00 | $600.00 | $5,600.00 |
| CONTINGENCY 5% | |||
| PROFIT AND OVERHEAD | $146,572.13 | $17,588.66 | $164,160.79 |
| TOTAL | $1,870,950.18 | $224,514.02 | $2,095,464.21 |
| $150.06 |
@Greg Dickersonundefined
Every area is different and the construction cost can vary. In Ohio, a two story town home would cost around $80/sq ft to build (1300 sq ft units). Smaller units cost more per sq ft. This is not including cost of the land, no basement, 1 car garage, with some brick and vinyl for siding, 9 foot ceilings but no granite or high end finishes. It may look cheap for many people, but I do have GC license and I manage everything myself and hire sub contractors.
what is the currnet cost for building apartments in dallas?