Has anyone analyzed new construction and how did you do it?

Question

We are considering building a brand new triplex and would love a tool to do an analysis.  We have the figures for total cost to build, cost of loans for new construction and the estimated time frame to complete it before we would have renters.  We also know the possible rent amounts and rates for the conversion from a construction loan to a 20 year loan. Also given that it would be a brand new property, we would assume we wouldn't calculate for normal maintenance, and capex for awhile. Of all the great tools on this site, none of them really fit our particular situation. Any suggestions would be greatly appreciated. Thank you in advance!

Lauren Thomas · Answer

@Tim Herman...yes, thank you...all good points. Beyond that though, we will have a year of money going out but no income coming in so I was looking for some sort of calculations for that.  I definitely agree with your point of still setting aside for maintenance and capex.

Tim Herman · Answer

@Lauren Thomas So you are not going to have normal maintenance or capex. So when you turnover a property you won't paint in between tenants. Your tenants won't have a clogged plumbing line. Reserves are for future expenses. The minute your property is finished there is a need for capex reserves. Everything wears out. Let's assume a 1000 sf of flooring per unit. 3units *1000 sf = 3000 sf. My area it is $6 sf to replace with a moderate lvp. Life span of 10 years. 3000 sf*$6 sf=$18000. $18000/10 year life span/12 months in a year=$150 per month for 1 item in a capex budget. Still have to account for appliances and hot water heater 12 years,hvac 20 year, bath and kitchen remodel 20 years,etc. You won't spend any of that money in the first years but you need to set it aside or be prepared to take it out of your pocket. The rental calculator should work just fine.