I recently bought a teardown in the Penrose district of St Louis from a ************** auction -- now that I own it and have paid the back taxes the city is sending me all kinds of letters about the dilapidated state of the property, etc. So I need to move fast and get out of harm's way (legally speaking.) I have already found a good contractor who is going to be putting a construction fence around the property this coming week, and I am going to start a Missouri LLC to protect myself legally. But would be interested/grateful for any tips/tricks/techniques you could provide about next steps I should take; e.g., finding a lender to get a constructions loan, finding an architect to design 4-plex, dealing w/ city bureaucracy moving forward, etc. Thanks in advance for any help/advice you can provide!
Hi David @David Ballard Finding a contractor to build is easy. They spend your money. How are your going to protect yourself financially? Please visit the area. One must know the local market to know how much building you can afford to build. Your project may qualify for a bank loan outlined in the Community Reinvestment Act, in which the big banks are encouraged/required to lend in low income areas. If you want a reference for an architect, send me a private message.
@David Ballard . My first question.. You have visited Saint Louis correct and The Penrose neighborhood ?? You know that’s not a great area. You’re most likely never going to appreciate and not cash flow that well either after brand new construction ?? I mean it has been a few years since I been over in that area but when I did live in Saint Louis that area was terrible. Unless that area is gentrifying you’re in for a long and expensive ride..
Hi @David Ballard . I'm also interested in 4 family development in the Saint Louis area. My challenge has been finding areas that will support small scale new construction cost, while producing a good return. Looking at some other properties for sale in Penrose, it appears that properties for sale are going for $15 to $40 or so per square foot including the ground and building. I know that what you build would be new, and likely nicer, but it would seem difficult to compete with the price someone could charge for a renovated property. What kind of square foot cost are you thinking you can build for (all in), and what rent do you expect to be able to get? I know lots of architects, and would usually go that way, but in this case it may be less expensive to buy a stock 4-family plan from a modular builder. Your contractor would still be needed to finish it.
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