All Forum Posts by: Mike Wood

@Maurice Stewart You will need two different contractors, one to separate the pluming in the house (think local licensed plumber) and a second plumbing utility contractor to install the meter on behalf of the SWBNO (they no longer do this).  

Your licensed plumber will have to separate the water service and submit the "water card" to SWBNO that starts the process of getting a second meter.  The building plumber cost will depend on your house particulars.

Once your plumber completes the separation of the water service, you will need to contract with a SWBNO approved utility contractor for the installation of the second water meter.  I am doing this right now on a gut renovation, and that cost is $2340. That does not include my plumber costs.

There is one (1) company that does both (he is both a regular plumber and utility contractor), but his price for the meter was very high, $3600 from what I recall.  Its best to get you plumbing separated first (including running a new service line from the house to the property line) then arrange with the utility contractor to get the second meter.

I would not be surprised if it costs $4-5k when all is said and done, and could be more.

@Leilah Davis While I am not a realtor, I am active in this part of the city. I am surprised that you cant find comp's in your exact area (St. Claude to N. Roberston, Elysian Fields to Desire), as there has been alot of activity in that area, including some very pricey renovations.  Without know how you are defining your comps, its hard to say why you are not finding any.

Are you only looking for new construction, if so that is likely your problem (you will need to look at renovated properties and adjust, there is just not enough new construction going on in alot of NOLA neighborhoods).

I think its not accurate to think your house will be considered a comp with anything on the riverside of St. Claude, we both know that is not the case.  If your picture is accurate for the house locations, I am not sure if most of them are very accurate for comps.  The house to the east (Bartholomew St maybe) is not the same area as your property.  

You will have to account for the fact that you appear to be very close to the train tracks, which has always been an issue for that area. 

I would say that if you are working the number to get a higher price, your likely doing it wrong.

@Brittany Burfict As @Braden Smith mentioned, investor loans require significant down payments (minimum 25% down payment on a 2-4 unit property, using conventional financing [i.e. 30 year fixed rate]), and using a business to purchase the real estate will push you into a commercial loan which could require even high down payments and shorter loan terms (typically 20 years or less). 

Its likely easier to purchase using conventional financing based on your personal credit and income than to use a business, assuming that your business is the very well established with considerable revenue and history.  Even then, your personal credit and income will likely come into consideration unless your talking about larger deals (5+ units).

@Lauren Salvani Permitting is easier for a gut renovation, which will shorten the time frame.  If you truly gut to the studs, you will save some money as you will be reusing most/all of the following; foundation, framing, exterior sheathing.  These save me about $35/ft2 over a new build cost.  Where I am, we dont have any impact fees or other large fees associated with new construction, so that would be something to consider in your area.

The downside with a gut renovation is your stuck with the basic house (for example, most older houses have 8ft ceilings, which would most likely be cost prohibitive to raise during a gut renovation) and are often difficult to open up enough to do a true open concept floor plan.

The upside is new construction is more valuable that a renovation.

@Nicholas Graphia  Sounds like you will be the only leaseholder and will attempt to sublet a bedroom.  I assume that you will qualify for the entire apartment ($1200/month) by yourself.  If you can't, this wont work as you will both need to be on the lease and thus sorta equal tenants.

I also suspect that your not going to find someone willing to spend extra money to be your roommate.  They can just as easily find another random roommate and split everything 50-50.  Rents in NOLA are fairly steady and easy to research.  I cant imagine that your prospect roommate's wont know what your paying and then ask why you want them to pay more.

You may also run into issues with the landlord by allowing adult occupants to live in the property that are not on the lease.  I know that my lease specifically states that is not allowed.  If a new tenant started to do what you are asking, it would be a violation of my lease and I would likely require that person to be added to the lease, or a new lease to be drafted up.

@Cameron O'Connor  Even with a very low chance of flooding, I believe that keeping it makes sense to always have flood insurance.  A flood event is not a small or cheap event for property.  Flood events are typically whole home catastrophic level events. Think 2 feet of water does not sound like much? It means that all flooring, furniture, base cabinets, 4ft of drywall, most trim work, all floor and wall insulation, alot of the electrical (wall plugs are only 14in above the floor), none solid core doors, etc will need to removed and replaced.  

I would think it would make more sense to work on flood mitigating the property such that you can get an elevation certificate that indicates that lowest floor for FEMA designation is the first floor and not the basement. Since we dont have basements where I live, I cant say exactly how to do this. But around me, if we can elevate all mechanicals to above the lowest floor, than that does reduce our risk and the elevation certificate (for example, a raised house with the first floor (no basement) elevated 3ft above grade, but the AC compressor is on a slab on grade, will get an elevation at grade, not 3ft above, since the mechanicals is at grade, raising the AC compressor raises your elevation). Also, if the property is raised above the surrounding area, the actual elevation may be higher than what FEMA assumes. An elevation survey is typically cheap, like $250-300 and go forever.

I would also caution about flood insurance rates. They are likely to go up, not down, in the future.  The flood program has been running a huge deficit for the past decade, and eventually, the government will not want to subsidize it any more.  So you already very high premium will go up.

@William Coet I do not do most of the labor (only exception is tile work).  I have a contractor that I use for alot of the labor tasks and then other dedicated subs for other labor.

So I guess that short answer is yes, I subcontract most of the build.  I have not used a GC/Builder on the last couple of builds, doing that myself.  Most of my sub's are guys/companies that I have used multiple times, but sometimes I end up with a completely new sub on jobs (like plumbers, which I can find anyone that is worth using twice).

@Trey Kern  At $70/ft2, that must be builders cost, not including GC or builder fees.  My guess is that is very simple construction with nothing but the minimum finishes.  Heck, where I am at, $60/ft is a gut renovation without GC/Builder fees and new construction costs me $80/ft2 before any finishes (cabinets, countertops, appliances, bath fixtures, hardware, flooring, etc).

Materials alone (not including the above mentioned finishes) ran me $39/ft2 for my last new build (finished less than 12 months ago).  

My new builds run between $90-100/ft2, with no GC/Builder costs.  My finishes are medium grade, so I can see ways to make them cheaper (if I wanted to, which I dont).  

Hopefully to everyone else, it makes sense that $/ft2 comes down with house size, assuming the same level of finishes.  That because you only only building one kitchen, and bathrooms are typically the same size.  So for a 3/2 @ 1,100ft2 will cost more per sq foot than a 3/2 @ 1,600ft2.

@Jacob Kline I am also in the south, and while I believe it may be possible to build in the $85/ft2 range (everything super cheap), I would be surprised if that is a real price given that you are trying to build a 3/2 in only 1100ft2.  My guess is that you will be lucky to finish this at less than $100/ft2. I also agree with others that the size is very small, my 2/1 rentals (duplexes) are 900-1000ft2 per unit, I absolutely can not imagine a 3/2 done well at 1100ft without closets for bedrooms.

No where did you mention that you think the sales price would be?  Given that land is less than $5k, I doubt that house prices are very high.  If you are looking to make at least 20%, then surrounding houses would have to selling for more than $135/ft2, if your costs are right (if the cost are $100/ft2, then your comps need to be in the $155/ft2 range).  Have you looked at what level of finish typical new builds in the area are done to? My guess is they are not super cheap (cheap cabinets, Formica countertops, roll vinyl or cheap carpet, one piece tub/showers, etc) that will be required to keep your costs super low.

While I personally purchase all my own material for my builds, its not as easy as you think.  Additionally, since you are responsible for material, any material shortage will cause delays, and your contractor may charge extra to account for the fact the they can not keep working on the project.  For your first job, I definitely would not recommend this if you have zero construction experience.

As for missing anything, have you accounted for flat work (driveway, sidewalks, ect), landscaping, fencing & appliances)?

Given this is your first build, I would recommend that you start with a turnkey builder that will do everything. Use this as an opportunity to learn what needs to be done and when, so that you can take some of that responsibility next time. 

@Maurice Stewart PM sent with recommendation.