Hi there,
My wife and I have rehabbed and flipped a number of houses and have actually made money on each one! Anyway, we have an interest in diversifying a bit into also owning some apartments. We have been carefully looking at this for a long time and we are experienced business owners and not graduates from the late night informercial, get-rich-quick in real estate courses.
One of the things that intrigues us is the new construction of a 4-unit apartment complex. We have a variety of stock plans for such a complex which can be tweaked but I am interested in resources to help determine rough construction pricing for such a complex. I know there are a LOT of variables in determining construction costs, but is there a resource for some generalized, cost-per-unit to build information before going and getting bids from a ton of different builders?
Thanks,
Dan
it probably works out to some average cost per sq ft. Any commercial builder should be able to give you that general ballpark.
Dan,
I work for a general contractor in Alabama and have ownership interest in an LLC with a modest porfolio of single and multi-family properties. We recently completed an 8-unit, two-story building close to the University of Alabama campus, so I might be of some help to you in arriving at a general budget figure-per-foot.
Cost-per-foot is very sensitive to site location. Some cities adopt stricter building codes which require additional expenses, such as fire sprinklers, ridiculous handicapped accessibility requirements, etc. These things can have a drastic effect on your final costs.
Your floor plan can make a big difference, as well. Try to avoid building anything that is not rectangular in nature; buildings/units with many corners and offsets are far more expensive due to increased labor, etc. If you’re able, design a floor plan with all the plumbing in a straight line. In other words, a two-bath unit with a bath on either exterior wall and a kitchen/laundry room in the middle is more costly to build than one that features both bathrooms in a straight line behind the kitchen. Once you “mirror-image” your units side-by-side, you’ll see the convenience and efficiency.
Use vinyl wherever possible. Avoid brick. If you can install something that you won’t ever have to paint, like vinyl or aluminum, do it.
I would budget $72-$74/ft. here in Alabama for a four-plex, but that does not include builder’s profit. It would help to enlist the aid of some local speculative builders in your area, mainly those who focus on entry-level single-family housing. Those guys are typically obsessed with budget management, and they know every trick in the book on saving a dime without sacrificing quality.
Hope this helps,
Rob