Multi family builders

10 Replies

I build a triplex last year post 2040 plan in  MPLS, have another set to go once I get final approved from MPLS CPED, and a third planned.  Unfortunately, I don't build or renovate for other people.  Have lot for sale if you are looking to build and will be selling off a triplex lot 6 story/70 unit apartment site in Uptown if interested as well

Originally posted by @Bruce Runn :

I build a triplex last year post 2040 plan in  MPLS, have another set to go once I get final approved from MPLS CPED, and a third planned.  Unfortunately, I don't build or renovate for other people.  Have lot for sale if you are looking to build and will be selling off a triplex lot 6 story/70 unit apartment site in Uptown if interested as well

I'm honestly thinking that this is one of the only ways an investor is going to get his hands on a good investment property these days at a price that makes sense- build your own. 

That or get lucky and proposition an owner who's been living under a rock so long that he somehow doesn't know present day market values. 

Or settle for buying for "appreciation", wink.

 

@David A.

Taking the bull by the horns and doing the hard work certainly pays off.  You don't have to be a GC to do this, just be able to finance and hire a builder.  It takes more time and effort but if you're motivated, you can do it.  Most investors are just waiting for something to fall into their lap-I agree with David, think outside the box rather than competing in the same box as 100 other people.  

@Christian Barth could you lend some better details such as how many units, ideal configuration, multi-family alone or mixed use, what city/ county/ area? 

As for are there "any" multi-family builders.... that's almost like saying are there any places to get a drink. Now if you add in the factors of who can take on ____ build in ____ time, in ____ area, that could be a impactor, especially adding on "and do a good job of it". Also, $$$$. I have had some people ask if I can help do some townhomes for under $85sf, to which they said they are serious after I stopped laughing. 

@Bruce Runn curious what your per sf came in at? And what value point per sf do you put on self contracting vs using a builder 100%? I have been hearing some associates throw around some pretty crazy margin numbers lately. 

@James Hamling



The questions you are asking are my secret sauce if you know what I mean. I have found sharing accurate build costs is difficult as there is too great a range and there is a wide variety of costs based on what is required and what finish levels people want.  Just the cost/delivery delays of lumber is so volatile that it makes it difficult as it's gone up 100% this year.   I also can't quote someone else's margin  as I let another builder quote on one of my projects and his cost came in $120,000 higher on a triplex and I know that wasn't just margin.  

It is amazing that people think "anything" can be built for $85 sq/ft in Minnesota.  I'm still laughing as well.  

Originally posted by @Bruce Runn :

@James Hamling



The questions you are asking are my secret sauce if you know what I mean. I have found sharing accurate build costs is difficult as there is too great a range and there is a wide variety of costs based on what is required and what finish levels people want.  Just the cost/delivery delays of lumber is so volatile that it makes it difficult as it's gone up 100% this year.   I also can't quote someone else's margin  as I let another builder quote on one of my projects and his cost came in $120,000 higher on a triplex and I know that wasn't just margin.  

It is amazing that people think "anything" can be built for $85 sq/ft in Minnesota.  I'm still laughing as well.  

As a builder I totally get what your saying on all the variables and so on, I was just curious what your build came in at, more as a "this is where new-con for investing is worth it for me" kind of thing, not comparing build-4-build as that's not possible at all. Good example, whats a deck cost? I have built one for $8K and another for 25K, same size, it's the features, finish's etc etc that vary project cost a lot. 

 

Originally posted by @James Hamling :

@Christian Barth could you lend some better details such as how many units, ideal configuration, multi-family alone or mixed use, what city/ county/ area? 

As for are there "any" multi-family builders.... that's almost like saying are there any places to get a drink. Now if you add in the factors of who can take on ____ build in ____ time, in ____ area, that could be a impactor, especially adding on "and do a good job of it". Also, $$$$. I have had some people ask if I can help do some townhomes for under $85sf, to which they said they are serious after I stopped laughing. 

@Bruce Runn curious what your per sf came in at? And what value point per sf do you put on self contracting vs using a builder 100%? I have been hearing some associates throw around some pretty crazy margin numbers lately. 

 $85sf is sure pushing it but lets take a peek at a quick back of the envelope:

5000sf building, 6 units, 833sf per unit.

units might rent for 800-900 here in michigan. 

100sf = $500,000 for a building that grosses 4800-5400 per month. Not to mention how long you have to wait to even collect your first rents really making your IRR suck for years. This just isn't good enough to be worth it, not to mention the realities of going over budget.

Unless you are in an area that commands some serious rents your limit on replacement costs isn't very high, if your intention was to build a profitable rental for yourself.

San Fransisco and New York can probably stomach paying 200-300sf and up. I can't here. 

If you max out at $800-$900 for rent for a brand new apartment, I don't see how new construction could work where you are.   I'm in Minneapolis and I get $1400/month for a nice 100 year old apt in a duplex/triplex in a great location.  New 2 bedroom units hit around $1800/month  I built a triplex with 3 bed/2 bath apt's that I get $2400/month.   

@David A. comparing Minnesota (Twin Cities) to Michigan (Detroit) is comparing apples too cabbage, it's just so vastly different of markets as shown by you statement of "might make $800 - $900", I can rent nearly any rat infested bed bug crawling shed for $800+ in Twin Cities. They are simply not comparable markets. 

First thing anyone in real estate must learn is differentiations in markets and how to analyze them. There is some underlying fundamentals that translate to analysis for markets anywhere in the country, but in all my travels across the US and world, I have found every market is unique and has unique opportunities, advantages, hurdles and disadvantages. It's all about knowing the factors of the one your working.

On that line, building styles, inputs etc are vastly different throughout the country, making whats a good price in 1 market a rediculous number in another.