Re: OK what about this? - Posted by JFinke KC
Posted by JFinke KC on July 15, 2002 at 13:32:38:
Angela,
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.
Good Luck,
JFinke KC