Multifamily New Construction

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  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    4w

    The gap exists because the numbers simply do not work in many areas. Construction costs, financing charges and other soft costs often exceed what achievable rents or sale prices can support. Even in areas where construction costs are not upside down relative to property values, entitlement and permitting complexity can create too much additional cost, uncertainty and risk. Most difficult part is finding a location that supports today's cost associated with going vertical balanced against permitting and entitlement risk.

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  • Chris SeveneyBusiness Member
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    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4w

    Which part of Massachusetts? This will be a very cash intensive journey and as others mentioned reason why there is not a lot of it is the numbers do not work right now 

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  • Denise SuppleeBusiness Member
    Realtor · Willow Grove, PA · Member since 2017 · 962 posts · 636 votes
    4w

    New construction can be a great opportunity, but I'd be careful about assuming that a gap in the market automatically means it's a good investment. I'd look closely at what similar properties are selling or renting for and make sure you've accounted for all the construction and carrying costs. And I would spend a lot of time getting comfortable with the builder and their track record. With new construction, the numbers can change pretty quickly if you miss something in the beginning.

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