Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
Hi all BoggerPickets...
I am curious about new construction cost for small multifamily projects. This would be for everything except land. We probably should assume a smaller mostly level infill site with rentable finishes. Location will probably be important for this discussion so if you could post where you are talking about. Maybe we could have best cost advantaged building practices.... Modular.. precast... stick frame... sips (structural insulated panel system ??).. block etc. My hope is that this could become a resource for any investor with a small house on a duplex type zoned lot. Thus helping all of us come up with a better value for some of these infill sites. Thanks for all your time and input.. Smole In :)
Lender · Denver, CO · Member since 2009 · 1k+ posts · 597 votes
10y
Clearly a lot of variables, but I can share a few real life scenarios. All excluding land costs and in Denver.
I finished a 7 unit town home project in August 15, near Sloan's Lake - we finished at $165 per ft - this is demo to door bell with all costs included
I am breaking ground on an 8 unit south of Sloan's in about a month - I am estimating $185 per foot again demo to door bell. About $140 a ft in hard construction costs - the balance is everything else.
Both of these projects are 3 and 4 story, modern, nice finishes with sales prices in the high $400's.
I just funded a single family house for a client last week - SFR about 5,000 finished sq ft - $140 a ft - completed value over a million.
Hi all, can I get your opinion on the last few posts... do you think this would be feasible and do you think they would sell/rent.... do you think the land could be subdivided for up and down duplexes, could you have 1 water tap for each duplex .. thanks for your thoughts
Lender · Denver, CO · Member since 2009 · 1k+ posts · 597 votes
10y
@Nate Wightman I am not one for reinventing the wheel. I see what others are doing, learn from it and executed accordingly.
The problem with the up / down is it becomes a condo split, rather than splitting lots and party wall. Additionally they value considerably lower for resale. I believe you can do one water tap, just will need multiple meters or hoa to split water costs and billing.
Although I do appreciate your creativity and legwork on nontraditional ideas, if anything you have mentioned worked and increased profitability, someone would be doing it.
Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
10y
@Travis Sperr Yes, I can appreciate that... however, my thinking is you would sell the entire vertical space bottom and top unit as a duplex (as a duplex townhome) one owner owns both the bottom and top... this eliminates the condo horizontal and vertical delineations...so 4 horizontal spaces could potentially sell for 1 mill plus... 250 / duplex
@Travis Sperr Yes, I can appreciate that... however, my thinking is you would sell the entire vertical space bottom and top unit as a duplex (as a duplex townhome) one owner owns both the bottom and top... this eliminates the condo horizontal and vertical delineations...so 4 horizontal spaces could potentially sell for 1 mill plus... 250 / duplex
I think you pretty quickly get into zoning and density constraints. Also limit your end buyer, investor or small pool of owner occs looking for this living situation.
Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
10y
Lots of variables but just for reference.
I was recently looking to build a 3200 sq ft heated and cooled custom home. Under beam was pushing 5,000 sq/ft. Huge porches front and rear, and a oversized 3 car garage.
10' ceiling throughout except 12' in living room. Granite, wood floors, brick house with hadi trim, spray foam insulation, tankless water heaters, high efficiency hvac, etc. Everything you could want without going crazy on the appliances and finishes.
Turn key not counting the lot cost my bids came in at $390,000-$432,000. All by very reputable builders including their 10-15% contractor fee. Bids were above market partially due to the lot being large (5 acres) and utilities and driveway being ran for 400' to the building site.
That puts my price per heated foot at 121-135 per sq ft. I had hoped to be in at $110 or less but was ultimately not feasible due to the amount of under beam sq ft compared to the heated sq ft and local comps.
Ultimately we decided against taking the plunge. The home likely wouldn't have appraised once complete as comparable homes in the area tend to go for $120 per heated sq ft including the lot, commissions, construction borrowing cost, etc.
For further comparative sake we found another home we liked that was basically a 9/10th version of the custom plan we picked out.
9' ceilings instead of 10'. Smaller porches front and rear, and a 2 car garage vs a 3 car. 2800 sq ft heated. Granite, wood floors, stainless appliances, stain grade wood molding and cabinetry throughout.
Builder is stating he can replicate the home on a typical level lot for $250,000. So about $90 per sq ft.
There's a tremendous amount of variation just on minor differences.
Both @Bill S. and @Travis Sperr are right. In an ideal world, these could be great, but the moment you get into zoning and code, you'll learn quickly why it has not been done and it's because of the strict restrictions.
As an architect working on several multifamily residential projects with the city of denver right now, I can assure you you'll need to adjust your plans to fit their box. Parking limitations are generally one per unit, with setback requirements that dictate where you can or cannot park. I just had to change one of my projects because zoning code will not allow a garage or parking within a certain percentage on one side of my lot. There are site sensitivity restrictions, fire and building code (if you are separating between floors for up down you need to fire rate the floor like you would fire rate the party walls that separate units, which can get expensive), etc..
As Travis mentioned, once it becomes up down, it's no longer a duplex or townhome, it's a condo. Lenders will not lend on it as a townhome because you need to own the land beneath and above. Your terminology gets confusing too, it's either a duplex or townhomes, not both. Duplex indicates you have two attached units, if you have multiple buildings of duplexes on a zone lot, the zoning does not consider this a duplex. Your zoning code will dictate how many units and how many stories you can build, you can only build multifamily if you are zoned MU or MX in denver, and then usually there is the number of stories that follow, and 3 is typically the max.
Do you already have the land? If so, you can look up the zoning designation on the city's zoning website. You can review the zoning code for the parameters of what you can build, but I would highly recommend working with an architect. Then set a conceptual meeting with the city, show them your plans, and they'll let you know whether or not they'll let you go ahead and submit for the sit development plan.
I like modular for speed of schedule and being built in a controlled environment as opposed to out in the elements. There is the added risk of transporting the module to the site. I think it still has a bit of a stigma (unfairly deserved) probably because many people confuse it with manufactured housing. It is still required to meet the same codes as site built. The modular guys will tell you that you're getting a sturdier product because it has to survive transport. I would argue that you're over paying for extra structure that you wouldn't need on a site built house.
The size of the lot and the zoning will define the rules that you have to start sculpting your project. From there it begins with the parking. You have to accommodate the parking requirements or the rest doesn't matter.
Hard to comment further without knowing the location, size and shape of the lot and the zoning.
Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
10y
The zoning is MRU mixed use residential urban up to 60 feet high no max density.. setbacks 0-5 feet.. roughly 150ft x 150ft ... this is my situation... but also I think this may if possible be a great way to hedge an exit for any ones situation if the zoning allows. If we could rent until sick of it and then sell the land and upward to one buyer (one duplex) we could maximize both rental income and sales appreciation.. if it works???
Rental Property Investor · Jamaica Plain, MA · Member since 2015 · 60 posts · 88 votes
10y
Interesting discussion. I agree with the other comments regarding local zoning being a big constraining factor. It seems like "as of right" development is the way to go unless you have infinite patience.
That being said, I like a challenge. I recently considered purchasing a 20,000 sf lot in Boston that was zoned for 2-3 unit multifamily. I wasn't wild about the location so I didn't move forward. However, if I did my game plan would have been to treat it as a phased development. For this to work, the deal would have needed to pencil-out as a sole 3-family property. I would have used modular construction, made it super "green" and aesthetically pleasing with an efficient site plan that could be adapted for future development. After the initial house was completed (and cash flowing) I would have pursued the necessary zoning variances for future development, on the basis of the sterling building that had been already completed. The additional development would represent upside since I would be covered even if the necessary variances were not approved. Of course, this strategy would have hinged on acquiring the lot at a low price so the deal would pencil-out with just one structure being built.
Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
10y
Hi and Thanks @Bill Thompson I did some looking and up and down duplexes are out there but are a bit rare. I guess where i am now is trying to figure out if you could have a " townhome" with its own rental below it, in effect an up and down duplex. In this way the land that is sold with the townhome also includes a rental... or gallery... or..... anyway I appreciate your time Bill.
Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
10y
I believe Corpus Christi Texas is allowing vertical duplexes. owner must occupy one unit and they sell together. I am kinda stuck on this duplex (vertical) idea because it seems to have a higher net exit $s available.. duplexes in Denver area are $300k and up...so $150 per door. but 4plexes don't command $600k very often. Also, the duplex seems to have a higher market share available to purchase them.. thoughts on this anyone... thanks
Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
10y
Vertical duplexes are very common in Milwaukee where I come from. I love them. It's the original house hack. Live in one and rent out the other. Commercial mixed use is also very common. This is a very old typology that I also enjoy very much. Grocer has his business on the first floor and lives with his family on the second. Any form of live work where you have retail on the ground and residence above is very rich culturally. The part that starts to scare people is ... well what if the retail space becomes a bar or a dry cleaner. I think live work is a great idea.
Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
10y
@Emilio Ramirez Thanks for your time.. do you have an opinion on the "structure" of a live work or vertical duplex to be encompassed into the townhouse legal description. thus allowing the rental and the upper unit to be sold together as one townhome from soil to sky. If this seems feasible I think it would encourage more investors into building smaller apartments that could be sold off later as duplex properties or townhouse with rental/live work. Not sure if I am making my point very clearly.... It seems that this topic could have more legs.
Investor · Peachtree Corners, GA · Member since 2012 · 131 posts · 83 votes
10y
I just had a 2/2 Duplex, 1100 sqft each side, stucco exterior, builder grade finishes - quoted in Atlanta at $80 sq/ft but that did not include the slab. I thought that was high.
Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
10y
Hard to say nate. Probably need to talk to a lawyer to arrange the documents, but i think you could do either a single property from soil to sky with the live work arrangement or two properties one residential, one commercial. I was unable to find the MRU zonning you mentioned. Lots of MR-* but didn't see MRU. Didnt spend a lot of time looking. My @mention is not working on my phone, but might be worth reaching out to micki m. I know she was working on a live work project.
Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
10y
@Watson Smith to me $80 seems very inexpensive from what I have been reading.. It surely depends on areas. Stucco seems like a labor intensive exterior. could you switch to some Hardy type materials to cut down the labor... guess stucco will pay for itself over time.. are you able to have the duplex on one water and sewer tap or do you need separate taps for each unit. Modular also has some appeal for getting tenants in sooner... but they can cost more than 80 in Denver. up and down duplex or side to side... carports or garages.
"M-R-U Mixed Use - Residential - Urban The M-R-U district is intended to allow for compact multifamily residential development with varying densities as well as office and retail uses generally along local and minor collector streets. The Urban context reflects a more pedestrianoriented environment that requires buildings to be located within a short distance of adjacent public streets. Parking shall be located behind or to the side of buildings."
I am not thinking the zoning should be a problem.... more curious about selling 2 vertical units together... I am thinking you are probably right.... "find an attorney".. I will talk to the city also. thanks again. N
We call them "Over/Unders" here, many of them old Second Empire and Victorian houses converted into duplexes - or triplexes with on unit per floor - back in the 1920s - 1940s.
As far as building new, around here it's not really cost effective at this time ...
Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
10y
So, I just spoke with Lakewood and they seem to think vertical duplexes could possibly work in the townhouse format where each duplex gets its own water and sewer and the lot is divided like a townhome.... this is just preliminary but looks promising. Still, my hope is to be able to create a better exit by selling duplexes as opposed to a 4 plex or condo's ... when renting is no longer of interest.
Investor · Denver, CO · Member since 2016 · 213 posts · 57 votes
10y
Hi Roy, I am thinking I will need to sit down with the city and see. But I am thinking this is a much better strategy to get the most per door when we sell.
Investor · Chanute, KS · Member since 2016 · 155 posts · 60 votes
9y
The cost per sq. ft. depends a lot on your floor plan and design. $120 to $140, depending on area, is a typical average build cost, but there are ways to lower costs.
I have a floor plan for a slab on grade, ~1600 sq. ft. duplex, about 1750 per side with a maintenance closet separating the units. Carports on both ends, 3 x 5 windows with only one door, windows act as emergency egress. Siding and roof are metal and it has CH/AC. My costs are about $80 per sq. ft., depending on flooring options. The shell is $53K.
You may not be able to use metal where you live, so then the costs increase. If you can use metal on the roof, they looking at Conrad Blocks. These are a special cement block that is stained exterior with attached foam insulation and nailing strips for drywall. You use an electrical charcoal starter to make channels in the foam for electrical wiring. They could do 4 walls of my duplex for ~$20K. The finished unit looks very good and with a metal roof there is zero exterior maintenance. Try Googling Conrad Blocks and see what you find.