Any one in the central florida build quadplexes

17 Replies

Hello BP I recently move to Orlando and have been searching for multi-family and have seen there is a shortage of duplexes , triplexes , and quadplexes has anyone built any in the last few years that can lead in the right direction 

We had a lot under contract in Oviedo with plans to build a quad. Contractor estimates and building materials proved to be too expensive so we had to release the contract. We are looking for a contractor that’ll build a 5 or 6 unit in New Smyrna now. Looking forward to seeing the reply’s on this post.

I'm in Cental Florida and I am looking into doing the same thing, building duplexes and triplexes. I have had some trouble trying to find any to buy. If you want to talk about it more message me.

There was a duplex for sale in Oviedo recently- built in 2017, I think, and quite small (each side just over 1,000 sq.ft.) but nice. It was listed at $300,000 and went faster than you can blink! There don't seem to be many (or any) small multifamily in the Orlando area. Building costs are high, and the prices don't appear to make sense for builders. 

@Joseph Whitton @Kerwin Montilla

I have been searching for multi-family units in central FL as well and have struggled to find anything that cash flows. Have also considered buying land and constructing new units. What have been something things you two have found in your research on this? Would love to collaborate. 

hi, any one considered ft.myers?  Even further down here in Miami. There is a shortage of inventory and rental is the way to go. I'm based in Miami and have a builder that can work in miami or ft.myers. 

@Kerwin Montilla great thread topic!  I have a few clients looking for multi family in the Apopka and surrounding area NW of Orlando. I just today mailed out 25 letters to owners of 40 different duplexes in my area to see if any are open to offers. Very few tend to hit the market but I know of so many perfect properties/locations that I have to find a tired landlord somewhere.  I'll be driving around to find other duplexes I don't know of around town as well.  There are a few that have just closed recently and a few are pending (not my buyer or listing) that fall within the 1% or greater rent to purchase ratio....none currently available.  Further analysis would have been required to be sure myself on each of those being a good deal, but all looked to be good investments with light rehab netting a decent market rent increase over current under-market month to month leases.  

I have talked to a few of these clients and a few other investors about the prospect of building duplexes or quads. I don't have the capital to do it myself (yet), so I haven't gone beyond the collecting of some rough numbers and running some approximate numbers. I've gotten a rough estimate from a GC of $80-90/sqft to build a concrete block duplex with 2/2 sides based on a pre-made plan signed off by an architect. There is then the land purchase, impact fees if unpaid, utilities, possible septic/well, site work, etc over and above the build cost (which of course could vary from that one estimate). Lots in my area are rather cheap while rent is fairly high, and depending on the deal and whether it's a small house with multiple vacant lots or just raw land. $20-30k for a buildable lot isn't unreasonable....before the other expenses. A recent deal I saw was a small 2/1 house on one of what was in fact 6 lots zoned R6 (urban residential I believe, does permit multis) for $135k. The house wasn't anything spectacular, maybe worth $85k on its own lot and could get $850/mo in rent. If kept or sold that way, each of the other 5 lots were basically $10k. The old existing house was built a few feet below the flood plain, so no major flip would be worth it and insurance may be expensive. I figured if held it could be rented until the other five lots developed, tearing it down to build a sixth at the end. A few feet of fill on the other lots for the new builds and no flood insurance would be required. FEMA flood map actually specifically avoids newer neighboring houses right up to their raised foundation. I know the listing broker on that property, and sadly (to us BP folks anyways) the buyer is a neighbors son and wants goats and chickens on the land :(. It is literally right in between brand new East and West legs of a new toll road that exit close by, development all around, ZONED FOR MULTI, six individual buildable lots, and he wants chickens and goats....

The one problem I have found is that it seems it would cost nearly the final value to build a duplex from rough numbers I have run. There are so few that are sold each year that finding comps to support value is often nearly impossible. Trying to show what a new or flipped duplex is worth compared to a more dated one is difficult because that dated one may be the only comp in 12 months and or 3 miles (and I hate even going a mile for comps). An appraiser wouldn't have much to go on and its too small to value based on NOI. There may be a 10-15% profit margin to build and sell a duplex, but again my numbers don't include specifics beyond best guesses and rough estimates. My thought, though, is that a brand new duplex would cash flow well beyond what an equally priced single family would as a hold, despite that building a single family would likely have more profit margin on build to sell scenario. With CapEx and Repairs so minimal after a new build and excellent cash flow, it seems the smaller forced equity would be worth it.

If I had $500k right now, I'd buy an acre and build two duplexes with 1100-1200sqft 3/2 units and single car garages.  I could rent those units for $1500-1700 quickly in the right Apopka areas. 2/2 would be cheaper to build and still good rent, but my feeling is since a 2/2 already has two bathrooms, building a third bedroom with no extra plumbing is a no brainer if already building new.  If $500k were to build two duplexes on one lot worth $550k that grossed $6800 in monthly rent, I'd be much happier with having the resulting cash flow after expenses and assets being paid down than trying to pull off a $500k worth of single family flips or having 2-3 separate rental houses worth a bit more, but also harder to manage and with less cash-flow. 

I have stumbled upon a nice acre of land here in Wesley Chapel.  That is exactly my thought purchase the land and build a 4-plex and then add another 4-plex.  I just have to make sure utilities and city water/sewer are available on that parcel I am not doing the well and septic tank routine.

hey we should create a group and network and investigate thoroughly investigate this subject because to me it make good sense the rental market is very strong rent are real high so I dont see why not only thing im not familar is with the building aspect of things 

@Kerwin Montilla I love the idea of forming a group specifically about researching building new multi family. Let me know your ideas on method: GroupMe app, in person, etc?  

 I don't have any personal construction experience aside from watching a national builder (DR Horton) knock out my house and five others in about 60-90 days from slab to C.O. in 2009.  I'm fairly handy myself and can DIY just about anything that could go wrong on my own house, but having a good GC or project manager efficiently handling subcontractors is the real key to a successful build. As the investor, I don't think it is as important to have a deep understanding of the specific build costs and potential challenges personally as it is to have or find a good GC who already has that understanding to share with you through their bids and ideas.  Codes, material prices, etc change all the time and they are the ones living it on a daily basis to have a pulse on that.

I know that all the way up until the studs were ordered on my house build, my builder couldn't tell me whether I'd have metal or wood studs in my interior walls. They built them both ways depending on material costs, and at that time wood and metal were flip flopping in cost so you'd see trucks of either one arriving on different weeks to the job sites. I'm happy I got wood studs, call me old school, but I'm not sure it mattered, the outside is block which was what was most important in damp FL.  

 On a duplex build, you want a contractor that is in the know enough to call you and say "Hey, we can save 10% on this material order if we use equivalent product A vs product B, here are the pros and cons, which do you prefer?" rather than one who will use the cheaper one and charge for the higher. 

I would imagine that building two identical buildings (duplexes or quads) would be more cost effective than just a single build. Even with a GC, I'd want to at least stop by daily to make sure the right people were doing the right things and there were no surprises with wrong or short materials.   Watching my house be built was an art as they had all the subs doing what they needed building batches of 5-6 houses like a well oiled machine. However, they installed what I swear was a little tiny kids toilet in my bathroom at first when I ordered an ADA adult sized one, they forgot a recessed 'picture alcove' that was supposed to be in the master bath when framing/drywall, and other small details like that.  Quick fixes because I caught them when the subs were still in the house or working on the one next door, but I'm sure they would have been a pain to fix after closing.  Despite the RE market crash after developing the roads and selling a few houses, the builder of my neighborhood managed to sell 100 houses and complete the neighborhood by the end of 2012, before the market really picked back up at all.  Prices were low, but there was still profit in it for them. 

Since I have no construction experience and at this point, and no capital yet to invest, my interest in this project discussion is predominantly from a learning experience and 'seeing what's possible' standpoint.  I'd be game to run comps on value and rent, search for suitable lots, do some county level research on zoning, anything to sort of grease the wheels for another's capital to make them money.  I would happily put any net buyer's commission from being the buyer's Realtor on the land acquisition into the deal for whatever small percentage equity or profit of the total that ends up being. If there was room to earn more 'skin in the game' by any other time, strategy, or management aspects, I'd be up for that too, but just the learning experience of seeing a small multi build through to completion would be amazing as I plan to do exactly that with my own somewhat conservatively leveraged capital down the road.  I just think the small multi asset class is one locally that would perform incredibly well and that could use a lot more inventory on the rental market.  

The street I rented a half duplex on in 2008 (and one of the streets I've direct mailed duplex owners from to find sellers) was interesting in development concept.  It was at the back of a neighborhood of 1950s and 1960s single family houses, some maintained and some distressed.  You can tell by the shape of the entire parcel that it was once one parcel of 15-20 acre vacant land before development.  The road becomes newer asphalt before you reach the first duplex, so it was all developed together. With basically an F shaped extension of the old road, different investors built 33 duplexes in the late 90s and early 2000s.  My landlord on the street back then had paid cash to build one 5 years before I moved in on an extra lot he bought from another investor that didn't want it after most had been built. It was vacant one month before I moved in, and his first two tenants stayed 5 and 6 years.  He didn't know much about the story of who started the development, but he was happy to snatch up the last lot and build a duplex on it.  Most duplex property styles on the street were built in multiples of 3 or more identical buildings next to each other, and likely by the same investor for each 'batch'.  The duplexes range from those with larger 900+ sqft  2/2 units with a one car garage to 750sqft 2/1 units with nothing but concrete out front to park on.   When I rented there in 2008, my 2/2 with a one car garage was $850/mo.  The smaller 2/1 units were $750, and the larger units were $950. I believe the last I saw my old unit rented was for $1050 and it wasn't the biggest one on the street. All duplex units in town seem to stay consistently full and hardly ever come available.

A similar but smaller project would be incredible if orchestrated right.  Find a deal on 5-10 acres in a currently nice and improving area where 6-10 duplexes or 4-5 quads would fit.  No single investor would need to fund the entire deal or even end up partnered with anyone on a property when done like on a big apartment syndication. However, capital could be pooled to buy the land while subs, floorplans, bulk materials and timelines could be shared between investors to save money, and each investor ends up with a duplex on its own lot in their own name. 

Maybe we can name this B-/C+ duplex neighborhood "Bigger Pockets Estates"? :)

@Russell Holmes @Kerwin Montilla @Anthony Perugini
Hey all, I would love to join a group if you all are serious of taking a deep dive to uncovering what it will take to build new multi units in Central FL. A friend of mine and I have been discussing the same thing for a few weeks but only the initial stages. I would totally be up for meeting up and dividing action steps to find real costs and leveraging options.

That is a great question @Kerwin Montilla ! There certainly is a great shortage of duplexes/quads/tris in Central FL areas. It seems that builders and developers are only interested in building townhomes and condos here!! I've been looking to purchase quads and dups in Killeen, Tx. (Ft. Hood) area because they are cheap (most under 200K) and because there's none here in Orlando...which would also be very expensive, I might add! I found an acre land in Apopka area that I'm thinking about building a Triplex or maybe even a quadplex. If that't what you want you'll have to build it yourself...I'm just lucky that my husband is a stucco/plastering sub-contractor with lots of General contractor friends! 

@David Baier I would love to get a group going of all who are interested in building small multis and see who has expertise where to get a project moving.  I haven't researched it much deeper than some superficial numbers since I don't currently have the capital yet to put into a project myself.  It seems that with how slowly land seems to sell, there wouldn't be any of the "wild west hunt" for good investment property and instead could be carefully calculated for lowest construction cost, highest durability/energy efficiency, etc. making sure it is a good solid asset with very low maintenance.

I just saw a pair of duplexes in Sanford hit the MLS and go under contract in two days. They are still pending so who knows what the offer was, but that fast I bet it was near list. They looked as if they would cash flow decently from my analysis, but weren't in an ideal location or of perfect repair. The rent and price reflected that, but the structures were still aged. They will likely make a good investment for whoever buys them, but if the same identical property were in a higher rent location, it would be a phenomenal investment. The problem I'm seeing with hunting multis is that you have to open your geographical area up really wide to find ANY in central FL. Building small multis, you'd get to look specifically for an area or a pocket where rent is high, land is relatively cheap (Apopka, St. Cloud right outside Lake Nona, Clermont, Some up and coming parts of Orlando, etc) and plop a rent-maximized brand new property right where you want that asset.

I like the idea others have mentioned about building a fourplex and then another afterwards on the same lot. I almost wonder if that would be the holy grail of maximizing the residential financing up to four units. You may be able to build with residential loans and numbers on each building (or at least the first, two quads on one lot may not pass as residential) and then get a value on both using NOI numbers being technically 8 units. A nice 2/2 fourplex unit could easily rent for $1100+ in the right location.

There is A LOT of land (not necessarily for sale, just raw land everywhere....some for sale) down near the new Apopka Florida Hospital. Before they spent $203 million building the hospital campus, the area wasn't all that desirable. They picked the location for a reason however, it is at the hub of two toll Roads (414 and 429) and is surrounded by lots of land for medical offices and naturally residential is growing in the area too. A new Apartment Complex there, Marden Ridge, is charging, I believe, $1100 for a 1/1, $1400 for a 2/2, and $1750 for a 3/2 apartment all because it is right by the hospital. A couple of quads in that area would be perfect. There is a builder, Centex Homes building two-story 8-unit buildings in a neighborhood right near the hospital as well. Each unit is a 3/2 (I think) has a garage and prices start about $220k per unit. I've seen quite a few as rentals on the MLS as soon as the sale closes for $1750. I think they are banking on appreciation a bit being happy with those numbers, but I think there's a sweet spot in more modest two and three bedroom units aiming for $1100-1400 rent range with simpler builds.

@Kayla Oliver-Pratt where in Apopka is the land that you're thinking of building on?  If you go forward with it I'd love to stop by and see progress (and meet another local eXp agent!).  Apopka is in desperate need of more nice rentals, a triplex or quad would be great!  If you're not very familiar with Apopka, I'd be happy to connect to let you know of some of the projects and growth happening in town.