Two family houses (building UP,not out), taking up one lot are going for 450K and up. The current gutted out house on one of the 2 lots,is a 3 family.I’m trying to research how much it would cost to build an apartment bldg. like what is next to these two lots OR to build a simple 2-3 family house on the OTHER lot.Maybe I should just see if I can flip it but because of the area,the proximity of the property to the city,the subway, and shopping,fixed up…it wont stay vacant for long at ALL.
There’s an Abandoned house that sits on two lots, but the house only takes up one. It is totally gutted because the family initially wanted to rebuild it,but the dad died and now they’re sick of it and want to just get rid of it.The area is such a hot spot that one bedroom apts. rent for around 1400 a month. A 2 family house in the area goes for 450K and up.There is enough room on these 2 lots to build an apt. house. That’s what exists next door to it anyway. It’s zoned as commercial or residential. They are asking 500K but are flexible. I would LOVE to have an apt. building there. Any ideas, suggestions, or comments?
I think I have more questions than answers. you say $1400/month for a one bed. How many units do you propose to construct? Will the current zoning cover multi-family dwellings (this is usually separate from commercial and residential)? Will you be tearing down the current house?
$500K for a gutted out house and vacant lot sounds pricey to me if duplexes are going for $450k. Of course, I don’t know you market. The question is do you? Whats the FMV of this house in good condition? Also, what would the vacant land be worth?
Some other questions: How much would it cost to build an apartment building in this area? Have you ever managed a multi-unit before?
And the biggest question: Do you have enough cash? You better or you better have a partner that does.
I’m not saying this isn’t a good idea. It could be very lucrative, however, you should answer all the questions I’ve asked and more, then think about those answers before pursuing this venture.
Your biggest issues: Will the purchase, holding and building costs justify the rents you can get with a decent cashflow. How will you finance this project.
