Do you already own the land? What do you mean by spending $400K to build an apartment complex. Does that include all your permitting and costs for getting water, utilities, etc., as well as the putting in all the fixtures, etc., or are you just talking about construction costs? I guess my point is that there are so many variables that it's hard to give you much of an answer without a lot more information. Seems like you should meet with a couple of local contractors to get more info.
The best way to find out is draw some basic floor plans sit with contractor and figure our cost/square foot. As Steve said there are a lot of variable, so your questions cannot be answered without knowing all these variable.
The construction industry can be a monster if you have no background in taking a project like this, but that why you have professionals like contractors and architects to make this process easier.
Thanks for the responses! I am currently looking at a nice 3.3 acre chuck of land. The land has not been zoned for what i want to do, but it would take about 6 months to get it zoned. I was hoping to get some figures before talking to a contractor, just so i can get the best deal. I know i have to get a lot more info about costs, utilities and all the local costs. I have a lot to do and right now im putting all my info on a excel spread sheet pieces at a time. Just trying to find the
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best angle to approach the situation. I could use any info and knowledge anybody has, ill just plug it in my portfolio... Steve i have not done anything yet, starting fresh.
As far as building costs I know nothing. As a landlord be sure this chunk of land is an area where there are potential quality tenants. Such as near a college or university where parents sign the lease and there is always demand. Research what the rents will bring then calculate how long it will take to get back your initial investment and much monthly cash flow it will generate. It's hardly worth it if you are just breaking even.
I think it would be a real stretch to buy the land and do everything you need to do on $400K, and Shabby Daze has some very good advice. I'm not far from the Wyoming border, so I know the state is fairly sparsely populated. Just make sure you know the market before you take this on.
Part of your research should include local rental vacancy rates...cost per sq foot/ bedroom etc. In my community average home rentals run about 600 per bedroom...so a 2 bedroom runs 1200 a 3 at 1800. These are Home rates not apartments...apartment run much less.
In some rural areas these rates can be a fraction of what can be had in more urban settings. WY is the least populated state and, Douglas seems to be out in the middle of nowhere. Is there really that much demand for housing in you community?
Ya thank you for the advice! I guess i will go ask local contractors what the going rate is per square foot. Shabby Daze you are very right when saying north Dakota would be a good place to build. Chesapeak Energy is one of the main job providers in ND, they are most definately heading this way and getting ready to drill, so tenants will not be an issue and Wyoming is starting to expand on its own already without the big boom thats going to happen very big opportunity. I was just trying
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to get average square foot building costs, i might take another approach and put trailers much cheaper and same renting price i havent decided and dont know building costs yet.
I know that over in ND and Montana, the oil companies are buying up big homes and turning them into what are essentially dorms for their oil workers. You might consider just buying, flipping and sitting on some existing properties if you think there is a boom on the way.
Boom and bust are common historical trends. I have a client in Cheyenne who was relating a story of home prices near Laramie when the "down turn" began some years back. Homes in general lost 30 to 50 percent of there value, as the market had its share of foreclosues etc.
Nichter's , good point there is a lot of variables that would play into drilling. I always need someone to bring me back down to earth and way the opportunity costs from all angles. If i get started on buying, zoning, building and renting now i might hit the boom at its peak. I appreciate all the chatter.
figure that your zoning costs are going to be close to $50 grand with lawyers, designs and fee permits to apply alone. Then add another $50 grand on lot improvements, water run off, sewage, electrical. You may find a smaller amount of units might need to be done to fit into the budget. Perhaps stand alone trailers until cash flow starts then build on another part of the property as the cash begins to flow.
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Check the property mineral rights also. If they are drilling in the area, it is very likely that somewhere hidden in the deed of the property is a mineral right for big oil or gas to set up shop on your land. Happened to a good friend of ours, Cleared several thousand square foot for his horses then next thing he knows he gets a knock on the door and they put a gas rig on his property right in middle of the clearing. He had no idea about this in his deed and could not stop him.
The construction industry can be a monster if you have no background in taking a project like this, but that why you have professionals like contractors and architects to make this process easier.
In some rural areas these rates can be a fraction of what can be had in more urban settings. WY is the least populated state and, Douglas seems to be out in the middle of nowhere. Is there really that much demand for housing in you community?
Don't bet the farm on it. CHK re-assigns more leases than it actually develops, and with gas prices way low, actual drilling could be years away
Check the property mineral rights also. If they are drilling in the area, it is very likely that somewhere hidden in the deed of the property is a mineral right for big oil or gas to set up shop on your land. Happened to a good friend of ours, Cleared several thousand square foot for his horses then next thing he knows he gets a knock on the door and they put a gas rig on his property right in middle of the clearing. He had no idea about this in his deed and could not stop him.