How to estimate cost to build multifamily in NYC?

Question

BP Newbie here looking to get some help or direction on how to properly estimate out the average cost to build an 8 unit condo building in Brooklyn, NYC. I've been an investor and fix-and-flipper in NY for 4 years now, with 20+ projects under my belt, but this will be my first ground-up multifamily development project.

Essentially I'm purchasing a 2 family property that is zoned and sized to be able to build out a 4 story 8-unit structure. Based on area comps, I'm purchasing below market value. Currently on the block, there are 2 projects of the same nature in various phases of construction (both are beyond the midway point of nearing completion).

I'm at the point now where I need some assistance in how to estimate the cost to build the 8 unit condo that I intend on building, should numbers make sense. Otherwise I have the option of renovating the existing property as well. I plan on purchasing the property cash (I have the liquidity available), but should I go the route of doing the condo development, I would need to get a development and construction loan.

I would also certainly be open to suggestions and referrals for architects, attorneys, lenders, contractors etc. if anyone is willing to do so.

Looking forward to being a part of this community!

Amit Gera · Answer

Thank you! Yes the primary plan would be to demo the current structure, however, we are also exploring the option of expanding, but in order to take advantage of the full FAR, it would require, horizontal, vertical and lateral expansions.

Account Closed · Answer

@Amit Gera

Okay got it, I’m in contract on a town house in cobble hill brooklyn.  We are going to do a full gut, extension up and back.  The construction cost are coming out to about $350 a sf, not including demo.  That number can obviously fluctuate wildly with material choices.  Best of luck, keep us posted!

Account Closed · Answer

Amit,

Congrats on you purchase, when you say "ground up" do you plan on demoing the current structure, expanding, or just converting?  I have a few friends who have done condo conversions in Brooklyn, and it's an extremely complicated process  that has several stipulations.  If you clarify whether your are building or converting, I could help you put some loose numbers to your plans.

Menachem Hodakov · Answer

There is probably a ton more money to be made if you do condos. Would you consider doing a joint venture with a seasoned condo developer who has done plenty of boutique project like this?

Marcel Itzik · Answer

Hi Amit,

I planned to build on top of my townhouse in bedstuy  couple of floors. It was few years ago the quote back then was around $300 a sqft.  With today inflation its probably around $400. on top of it all the architects and permits.... I ended up taking the money and bought a 4 family in crown heights. Which have a huge lot. Planing maybe in the future adding up 4 apartments.