All Forum Posts by: Thierry Van Roy

Thanks for offering advice in any case. I think I might have located the original architect, so he should be able to tell me how much work is left. Complex situation, ugh.

Any resources you can recommend me to grow (!) some insight into building costs for apartment buildings? I wouldn't dare comparing myself to contractors or architects, but I was able to grow my knowledge of historical buildings through study, so might as well continue asking newbie questions while I'm at it.

PS
I'm in the old continent, so BP contacts won't help me much.

I know it's a long shot, but I am asking for a pretty wide range. The "it depends" is the only correct answer, so you're 100% correct, but the problem is that I have to place an option bid and the price I'm willing to offer stands or falls based in very gross estimates on how much the work is going to cost me.

The thing is this: I might get it at 350 USD/sqft and these apartments sell for an easy 650 USD/sqft. But selling is only my exit strategy (I intend to hold), so the construction can't cost me an additional 300 USD/sqft.

Are there any resources on the numbers behind apartment construction I can look at perhaps?

I've been asking around everywhere, but the clock is ticking and I'm not sure whether I'll get the chance before it gets snatched away from under me by a 'greater fool'.

So this is going to sound stupid, but the situation is unique so bear with me. I have the opportunity to get an 18-unit building under option, but I may have to move fast. After winning the option bid, I can do the full inspection, so it will only cost me the inspection fees if I decide to bail.

Having said that, I need a very gross estimate ballpark figure on what it'll cost me. No replacement is necessary, I only need to get it finished.

Summary:

• The hallway (200ft) needs to have walls put up, right now all wiring and pipes are exposed.
• 1 floor is a construction site (3.300 sqft) with a ceiling height of 130ft (very high). There's wiring, plumbing, gas and underfloor, but no floor, no walls, no windows, no plasterwork, no nothing. That's the largest part to work on. Just imagine a large cube with everything stripped and ready to work on. Example, only imagine this with new materials, wires everywhere and a lot bigger.
• Two units need all of the plasterwork and flooring installed (800sqft each), but at least the walls are there. (Imagine this)
• The other 10 units are 90% done. Still needed is some finishing touches, the light fixtures, equipment installation (kitchens, baths are there, just not installed yet). I can even do this myself.

Now suppose I want everything move in ready. No grand luxury, no expensive materials. Also assume there aren't any structural errors or impossibilities in my plan (that's what the option is for).

In other words: construction costs to get a bunch of empty, habitable units.

I'm estimating about 700,000 USD in costs.

My question: is that safe to assume? Am I over-/underestimating? Is it more like 500,000 USD, perhaps? Or more like 900,000 USD? Or am I completely off? A variance of 100,000 USD is fine, but I'll get in trouble if going 200,000 USD over budget.

Depending on the ballpark figure, I can make a winnable option bid. But I have to move fast, so I don't get the luxury of doing a decent inspection now.

If you guys can help, I'll be sure to document the process should I win the bid ;-)

Also, is J Scott his book applicable to my situation? It's not exactly a house I'm working on here.

Oh, I forgot: it's a classified building (monument), both the inside (stucco etc.) and the outside. The city will have my head if I were to try that ;-)

(Not cheaper either, by the way, I can get government loans for this kind of building at a sweeeeet 1% interest rate!)

The owners inherited the building from the late head of the family. They're out of state and the broker says they've never even visited the building (!). It's been pretty much empty for the past 10 years.

The broker is very motivated as he's tired of keeping this thing listed. He has to communicate through a family representative. I suspect the owners are trying "speculative vacancy", letting it deteriorate (lower taxes) and hoping the location will appreciate over time until a greater fool drops by. But the city isn't going to stand for this, as it is a classified building they'll eventually do a brutal inspection.

There's mold in the corners and asbestos in the roof. It's amazing, really.

I'm thinking the same way: might as well give it a go, handing a reality check to the owners.

A broker told me this total rehab project might sell better if my offer were to be "documented".

I'm essentially writing a report which shows the gargantuous scale & scope of the project as to dissuade the owners of (a) ever trying their own hands at it and (b) expecting a better price.

But globally, the thing just looks as if I'm intentionally ripping on their property. It's a big house at an A-location, but it's old and has deteriorated for years. Example: The wooden supports are affected by deathwatch beetles, though I'll still need to bring in an expert to see whether they're still active. Also, moisture is going up and down the walls on all floors.

i.e. A total strip job.

I could write a book, is what I'm saying. But should I?

Has anyone ever done this?

Does this kind of thing ever help?

Thanks, it's starting to make sense now. The city is notorious for its red tape, so it wouldn't surprise me if they threw up their hands because of it.

Welp, I'll see whether I can get through the broker and sort out a deal.

Thanks a bundle!

Thanks, that's great advice!

Still, how does running out of money work for a multi-million EUR fund? Do they abandon projects if they go over budget? Is that normal?

I estimate you would get more bang for your buck if you just finish it up and sell the units individually, but they apparently don't think so.

well, learn up I would say then. This isn't an entrepreneurship forum, so we can't advise you on that part, but be prepared when you get back. Start thinking about your niche, as you seem to be very mobil you need to start wondering how and where you will be able to invest. It would be a great luxury if you could go wherever the market is primed rather than having to return to your home in a saturated market.

You seem to be taking pride in being a "salaryman", is the local mentality affecting you a bit? ;-)

Where do you plan on buying real estate? The Japanese market has been worthless for over twenty years now (except for the ski resorts), so do you expect to buy from a distance? BP recently released a book on the matter.