Cost to build a Duplex

Charlotte, North Carolina
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Cost to build a Duplex

John Mason Wallace
Unknown · Member since 2016 · 16 posts · 11 votes

I'm looking to start building "missing middle" housing in the Belmont neighborhood of Charlotte, NC. It's one of the few pockets of the inner neighborhoods that are affordable.... though, that's quickly changing. The lots are now going around 100,000K a lot.

A shotgun styled duplex might do the job, a little less than 900 per unit. I can get the architectural drawings for around 1500$.

The one issue is I'm having trouble getting an idea of what the costs for building a duplex are. I'm looking at around $110 per sf, though I'm hoping it could be a bit cheaper.

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Jonathan Taylor SmithBusiness Member
Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes
10y

I've been curious about the same in Raleigh / Durham, NC; however I've gotten figures from $90 to $125 per SF. Since the range was so wide and I'm not going to be doing it this year, I did not put in the effort to get a more precise figure.

But my point of concern with buying a lot and building my own duplex is how to make it cash flow on par with the units I purchase and rehab. I'd like rent of 1.5% of my all-in cost, so if each unit will rent for $900 * 2 = $1,800, then my all-in cost cannot exceed $120,000. And I cannot see getting the lot in a desirable location and new building for that price; yet I can could buy existing and rehab for that and less. Am I missing something?

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  • Jonathan Taylor SmithBusiness Member
    Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes
    10y

    I've been curious about the same in Raleigh / Durham, NC; however I've gotten figures from $90 to $125 per SF. Since the range was so wide and I'm not going to be doing it this year, I did not put in the effort to get a more precise figure.

    But my point of concern with buying a lot and building my own duplex is how to make it cash flow on par with the units I purchase and rehab. I'd like rent of 1.5% of my all-in cost, so if each unit will rent for $900 * 2 = $1,800, then my all-in cost cannot exceed $120,000. And I cannot see getting the lot in a desirable location and new building for that price; yet I can could buy existing and rehab for that and less. Am I missing something?

    Blue Chariot Realty & Management4.915 Reviews
    WebsiteView Page
    6Reply
  • Seth Borman
    Rental Property Investor · Phoenix, AZ · Member since 2016 · 553 posts · 314 votes
    10y
    I think I recognize John Anderson's organization at work here. In working on a fourplex along the same lines. The way that it works out on my pro forma is that I have to attract a great tenant and have some maintenance free years at the beginning to build up a capital reserve. All my real gains are from appreciation and my equity at reversion (year 10). Right now I'm at a 7.5% cap with an 8% cash on cash return and a 19% levered IRR. I like the deal enough to proceed. You'll have to make a similar decision.
    3Reply
  • John Mason Wallace
    OP
    Unknown · Member since 2016 · 16 posts · 11 votes
    10y

    I'm seeing people trying to rent their homes at around 1400K which is rent I need but their charging only about 1.20$ a square foot. I need around 1.60$ a square foot.

    My target return on investment is about 9% but the numbers are against it.

    ".... great tenant and have some maintenance free years at the beginning". Good lord don't assume that.

    1Reply
  • Seth Borman
    Rental Property Investor · Phoenix, AZ · Member since 2016 · 553 posts · 314 votes
    10y
    Originally posted by @John Mason Wallace:
    ".... great tenant and have some maintenance free years at the beginning". Good lord don't assume that.

    I've got enough money built in to pay for contingencies, it would come out of profits. 

    1Reply
  • Kevin Breed
    Licensed Contractor · Carolina Beach, NC · Member since 2016 · 83 posts · 22 votes
    10y

    @Jonathan Taylor Smith is about right with those SF numbers. @John Mason Wallace as a builder, with a fee factored into the cost, for a project like yours...l would be around $110-$125 depending on grade of finishes you wanted.

    3Reply
  • Jim Adrian
    Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
    10y

    Those sq ft numbers of $90 to $125 seem to be on target.  A lot will depend on level of finishes.  I would start with a 20% contingency knowing you will use some of this.

    2Reply
  • John Mason Wallace
    OP
    Unknown · Member since 2016 · 16 posts · 11 votes
    10y

    Thanks guys, but it looks like the land is too costly for a duplex. Time to make way for the four-plex (or two duplexes really).

    Problem is I'm having difficulty finding a contractor now. Most of the contractors on google are the very professional but expensive re modelers and custom home builders.

    0Reply
  • Kevin Breed
    Licensed Contractor · Carolina Beach, NC · Member since 2016 · 83 posts · 22 votes
    10y

    @John Mason Wallace I will send you a message to connect. Even though I am in Wilmington I might be able to help you out. 

    1Reply
  • Jason Layman
    Spring Lake, NC · Member since 2015 · 71 posts · 25 votes
    10y

    Has anyone on here ever built there own?   I would like to know the results.  

    4Reply
  • Clifford Kearns
    Investor · Culpeper, VA · Member since 2016 · 20 posts · 5 votes
    10y

    I am a general class A Contractor in Virginia. The best and cheapest way to do a duplex is buy a modular unit you should be able to put that together for about $75 to $80 per square foot. The time line is the best because you can get the construction done and ready to rent in 45 to 65 days!

    4Reply
  • John Mason Wallace
    OP
    Unknown · Member since 2016 · 16 posts · 11 votes
    10y

    Modular construction is like a forbidden fruit. I keep getting told not to do it but the savings are hard to ignore.

    I'm guessing 80$ a square foot for mid-range materials. 95$ will make something nice.

    0Reply
  • Bryan Vincent
    Investor/Real Estate Agent · Atlanta, GA · Member since 2014 · 63 posts · 18 votes
    8y

    Why is modular considered Forbidden Fruit?

    and would you be able to build something with the same style as the homes in Nashville for a similar price?

    0Reply
  • David Tiemann
    Investor · Hereford, TX · Member since 2016 · 53 posts · 42 votes
    8y
    Your numbers are pretty close to what it would cost in my area. I am a builder and have run the numbers over and over for years. I can always do better buying existing and remodeling them. Even with all the advantages of being a builder, drawing the plans, in-house crews, connections with subs, etc., it just doesn’t pencil out for me in this area. You can find real estate deals that are deeply discounted with some hustle. However bricks, sticks, and labor are not likely to be discounted the same way.
    4Reply
  • Eileen Murray
    Real Estate Agent · Niagara County NY · Member since 2017 · 121 posts · 77 votes
    8y

    @Bryan Vincent- I don't know in those areas, but recently I've noticed RE listings on mobile homes set on foundations listed as "modular".  It really  undermines the reputation of a true quality modular build. If realtors are confused as to the difference between modular and mobile, I'm sure the average tenant or buyer is too. 

    On a personal note, I put up a modular and I loved it!! Plus you couldn't beat those thick middle walls whe the teens had their music blasting!! I wouldn't hesitate to build or live in a modular home again!  ( bonus- it's fun watching the cranes swing your house around in the air to set it on the foundation!) 

    4Reply
  • John Mason Wallace
    OP
    Unknown · Member since 2016 · 16 posts · 11 votes
    8y

    It’s funny seeing this thread revived. 

    I have long since hit a wall trying to find a lot and build a project and seeing it pencil out. Most of the issue is lack of experience but I suspect now it just isn’t the right time to be a small scale Developer, at least for a newbie.

    Labor shortages, hiking land values, expensive construction, hostile regulations. It ain’t easy.

    I might become a minor partner for a fourplex project in Optimist Park. A more experienced developer is finally building missing middle in the area. My way to finally dip my toe into land development.

    ———————

    From what my pro formas suggest and talking to another developer once, land values have to be pretty low for a duplex to work. 50,000$ lots signal the time for a triplex or even a fourplex.

    There is a modular construction company that has a factory not far from Charlotte. Clayton Building Solutions. If their reputation holds up, and if they can save construction costs, might be a way to get these projects to pencil in.

    2Reply
  • Brian Orr
    Rental Property Investor · Tampa, FL · Member since 2016 · 208 posts · 96 votes
    8y

    @John Mason Wallace I'm just noticing this old thread and your comment from last week. I've just been through months of trying to put together development in the Belmont area. Unfortunately just this morning we came to the decision to go another route. Though I found a pretty good builder from what I can tell, the overall costs are just way too high to sustain a duplex build and come away with anything in the black... Your latest post is exactly on point. But I may be interested in your syndicated deal, or future deals of that type. Could you send me over some info?

    1Reply
  • Chris C.
    Wholesaler · Easley, SC · Member since 2010 · 340 posts · 249 votes
    7y

    What's the opinion on a large duplex community?  75 to 100 units renting for 1100-1200 per month?  The idea is to sell some and keep some?  

    I acquired a great piece of land in a great up and coming area with road frontage on 2 roads.  Spoke with a builder last night and he said if we developed it with another project he is doing we could build for $80-82 per sf.  This does not include site development obviously.

    2Reply
  • Alex Franks
    Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
    7y
    @Chris C.

    Send you a PM

    Alex Originally posted by @Chris C.:

    What's the opinion on a large duplex community?  75 to 100 units renting for 1100-1200 per month?  The idea is to sell some and keep some?  

    I acquired a great piece of land in a great up and coming area with road frontage on 2 roads.  Spoke with a builder last night and he said if we developed it with another project he is doing we could build for $80-82 per sf.  This does not include site development obviously.

    0Reply
  • Nicholas Lohr
    Investor · San Francisco, CA · Member since 2015 · 302 posts · 206 votes
    7y

    90 - 125 per square foot?! damn maybe I should move to NC?  I'm smack in the middle of building a duplex in downtown Sacramento CA right now. Even with me GC'ing it all myself we are at $205 per square foot easy.  Thats not including the land.  ($450,000 for 2200 sq feet)   This includes all the "soft costs" though.  

    0Reply
  • David Hutson
    Rental Property Investor · Tampa, FL · Member since 2013 · 404 posts · 421 votes
    7y

    @Chris C.,

    Let me know how that goes.  I have been looking at doing something similar.  I think it makes sense but haven't run scenarios to do this as I haven't picked a location yet but it does sound like a good idea.

    0Reply
  • Francine Brown
    Member since 2018 · 15 posts · 2 votes
    7y

    We are in florida and I would not build modular here.. the insurance costs would be insane.  We are looking into building a duplex/triplex and living in one unit and then renting out the other two. But, we are in beginning process of getting numbers.  We'll have to see how it goes.. It has to make financial sense

    0Reply
  • Will Wu
    Rental Property Investor · West Palm Beach, FL · Member since 2014 · 81 posts · 50 votes
    7y

    I have 3 parcels in Miami zoned for building one Fourplex and 2 Duplexes. I'm in the early stages of hiring an architect. I was told the cost for building will be around $120sq ft. 

    3Reply
  • Terrance ClarkPro Member
    Real Estate Professional · Hickory, NC · Member since 2016 · 169 posts · 45 votes
    7y

    Which type of zoning is needed to build duplex or quad? I would love to make this my first investment house hack a new build. in a good area.

    0Reply
  • NA NA
    Member since 2020 · 1 post · 0 votes
    6y

    Hello Daniel Davenport here. I am looking to retire in the US. Basically build a duplex, triplex, or fourplex whatever I can afford and live in one. Rent the other(s). I am willing to go anywhere in the US which makes the investment work. I am a military veteran. I don’t know the next steps. I have learned asking for help is best. Can someone help?

    0Reply
  • Chad Smith
    Rental Property Investor · NC · Member since 2017 · 3 posts · 0 votes
    6y

    @Kevin Breed I know this kind of an old thread, but I was hoping I could pick your brain. We’re looking at a multi family property that has a couple acres of undeveloped land. When you said that it should be about $125 per SF, is that including the land purchase? Or is the land purchase an additional expense? Thanks

    0Reply
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