4-plex Development

5 Replies

Howdy folks! I've got an opportunity to help a developer who is going to be buying, developing, and building a 4-plex community in my market. He has asked me to help market the properties. My area is a suburb of Austin, TX with little "affordable housing". The development will consist of approximately 20 buildings/4-plexes which will be managed (by the developer who has experience with this) and in a POA/HOA to help keep the development from going the route of down-trodden.

My questions:

-What are some ways to demonstrate the investment opportunity for potential buyer(s) given the lack of existing 4-plexes?  
-Is this a CapRate play, a GRM play, an IRR play, or all of the above or something I'm too naive to even know?

Thanks in advance,


Wade T. Funk

HI Wade.  That's awesome that you have that opportunity.  I bet they will move very fast.  

I would use the BP investment analysis spreadsheet...which will give you all the basic roi and cashflow. It's easy to add a row for cap rate at bottom if you want. I would skip IRR as i doubt any duplex investors will be sophisticated enough for an irr analysis.

I'm certainly not sophisticated enough for IRR, so I'm glad my need to learn it is mitigated in the short term! Thanks for the reply...I'll look in to that!

@Wade Funk Using the BP analysis is good, But perhaps you can also collect some statistics from local housing authorities, etc. regarding their waiting lists vs. available properties. I don't know if you will be building one at a time or in small segments, but you could also float some CL ads, etc. for the finished project and see what kind of a response you get from potential renters (like put up an ad for 48 hours with a rental price and features). This will both help gauge interest and show an investor that they have a ready market for their product. 

Originally posted by @Account Closed :

HI Wade.  That's awesome that you have that opportunity.  I bet they will move very fast.  

I would use the BP investment analysis spreadsheet...which will give you all the basic roi and cashflow. It's easy to add a row for cap rate at bottom if you want. I would skip IRR as i doubt any duplex investors will be sophisticated enough for an irr analysis.

 I'm an idiot, apparently!  Can anyone point me to the "BP investment analysis spreadsheet" mentioned here?  I see about 3,000 different spreadsheets!  Thanks...

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