All Forum Posts by: Mark Graffagnino

Thank you @Crystal Salton.

Thanks very much @Jesse LeBlanc.

I'd like to have an appraisal done on a rental property before I put it on the market.  Are there any appraisers on BP or does anyone have a recommendation.  Thanks.

@Chan S. my lease reads like this for early termination: Resident may terminate this agreement by doing all of the following: a) Giving Management sixty (60) days written notice, b) Paying all monies due through date of termination, c) Paying an amount equal to the Security Deposit as an Early Termination Fee, d) Returning dwelling in a clean, ready-to-rent condition, and e) Paying a pro-rated portion of expenses for repainting and cleaning based on the ratio of the number of months then remaining in the initial term to the number of months originally in the initial term.  I have a separate clause in the lease that says they need to cooperate with showings once they have notified us of their desire to move.

I have filed suit against a former tenant who gave me 1 weeks notice and then bolted, so I'm going after her for the 60 days, plus the other fees, so I'll see what the judge says about my early termination clause pretty soon.

@Jay Hinrichs I am not sure about the permitting, but I was talking with him about costs going from a developed building pad, so not site development.

Forgot to add, I have a friend who is a homebuilder in the northern Atlanta suburbs.  This is what he told me last fall:

For a $700K spec home his cost is $135/sf.  Custom can push to $225-250/sf.

@Brandon Richardson I am in the same business and can confirm that, yes, we are paying $120-130/sf for multi-family construction costs.  Now we are talking about 5-6 story construction with elevators, maybe a podium slab and usually structured parking.  Commodity prices are in the tank but the labor market is driving costs up.

And I can also confirm that these amenity packages are insane.  The architects and interior designers have done a masterful job of forcing developers to "keep up with the Joneses" after they convinced the first idiot that people living in apartments absolutely must have these ridiculous amenity packages.

@Jay Hinrichs I think you are right on target.  I am hearing that lenders are starting to pull back on multi-family deals on Atlanta.  "Back in the day" the developer I worked with was getting non-recourse construction loans but I have not heard of that any time in the recent future.

@Mike Wood the $800K would be representative of about a $20M construction cost.  If this deal was a 150-unit garden style deal, construction costs would probably be closer to $15M.

Eli, 

Thanks again for putting this together.  Had a great time meeting some new colleagues and enjoyed the great discussions.  Looking forward to the next one.

Hi Gloria,

I've been in the apartment development business in Atlanta for over 20 years.  There's definitely not enough space, or time, to get into all the facets here, but in general, ground up development is a very expensive and time consuming process.  Once you are able to find a site that is already zoned for multi-family- because rezoning to multi-family is very difficult- and tie up the site with an earnest money deposit, you've then got to engage professionals for: surveying, land planning, civil engineering, geotechnical, environmental, architectural, MEP design services.  You also have engage attorneys for doing your due diligence on entitlements and working towards your closing.   And someone has to be putting your hard cost and soft cost budgets together to make sure the deal actually works financially, concurrently with getting your land disturbance and building permits approved.

I'd say on the average new apartment deal I've been involved with the developer has invested about $800K over a 9-12 month timeframe from signing the contract to buy the property to closing on the loan.

I'm not familiar with the Orlando market, but metro Atlanta is going crazy with apartments right now.  Everything is urban infill because all the feasible suburban garden style sites have been developed already.

Best of luck and feel free to reach out with any questions.

Mark