Hi! I am a newbie in the real estate investing world, but ready to jump in. I am starting on my first rehab and really excited about that! I live near a fairly small community (about 4,000 pop.) that is on the interstate and starting to grow rather rapidly. I have found some land right off the interstate that I would like to have developed into an apartment complex or duplexes. The problem is, I don’t know where to start. Any experts out there that can guide me through the process to figure all my expenses, who do I need on my team, anything??? I know this is a big step for a newbie, but I know these would do excellent! All of the old apartment buildings in this town are downtown off the interstate a few miles and everyone is wanting to get out closer to the jobs and interstate. I would love your advice.
Developing your first aparment complex can be a very challenging project. Do you have any experience in rehabbing residential? It is no where near the same, residential to commercial but at least it is a start.
Where is this property located? What is the current zoning for the property? How many units will the market support?
These are just few questions to get you started. If I had to break it down:
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Look to see how the property is zoned. What would it take & costs to change the zoning if that is needed.
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Talk to several construction companies to get a rough idea of your areas construction costs.
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Try to find another builder/investor that might be willing to partner with you.
Regards,
Patti
You’re going to need a lot of your own cash in this deal, this isn’t a Carleton Sheets no money down special…
The problem is, I don't know where to start. Any experts out there that can guide me through the process to figure all my expenses, who do I need on my team, anything???
This is another good example of “If you have to ask…” you’re not ready for it.
Someday down the road when you are ready for it, I’d recommend you pick up the book called “Be a Successful Residential Land Developer” by Woodson. It touches on just about all the book knowledge you’ll be required to have. I have several friends who are developers, the biggest difference between developers and rehabbers (beside developers destroy eco-systems) is that their phones NEVER stop ringing. Development is probably one of the most involved and difficult things to do in RE. It emcompasses every little land, RE and construction related trade along with more government garbage than anyone likes to deal with.
I know around where I live, building a new house costs about $115,000 BEFORE you lift a hammer. The government hits you with more junk fees than any lender in the world; library impact fees, forest impact fees, school impact fees, landfill impact fees, sewer impact fee, utility/ sewer/ water hook ups, etc. It makes you wonder what the hell property taxes pay for. Those fees all run around 5-30K. Then you have architects, surveyors, draftsman, attorney fees, permits, etc. just for the municipality to say you can build it. This is the reason why most builders build a few hundred properties at once, it’s the only way to make it cost effective. If your going to develop anything, make it the absolute biggest thing the market will bear and the government will allow.
Good saying and very fitting.
But remember this… the more problems you can solve (i.e. more headaches you can dish), the greater the profits. 