NEW APARTMENT CONSTRUCTION WATERLOO

[RAJ]

HELLO ALL:
1. Can anyone give me a rough idea of construction costs per square foot for a new apartment building with 40+units with full bath and laundry per suite?

2. Also,I am ready to purchase my first apartment building after owning many single family homes. I note that the cap rate that many realtors report does not take all expenses into account such as maintenance,vacancy, management fees....- should the "real" NOI not reflect this?-otherwise how can one accurately price a property. I am looking to purchase an apartment building but find this inconsistency in calculation methods surprising coming from "the professionals" ( no disrespect intended).

3.What is the going cap rate for apartments in Waterloo/Ontario?

Thanks in advance.

 

[housingrental]

1. It`ll depend. $90-$120+ sq/ft frame. + fees + professional fees. More if solid.

2. Yes it should reflect. Yes they often don`t include it in marketing. Work with a realtor as a buying agent to help you build a better pro-forma. Who are you working with currently?

3. It depends. Size / age / location / condition etc... Smaller one`s generally less than 6%. Some closer to 7`s%. If real rough or other issue maybe you can do better.

What lot do you have that your looking to build on?

 

[Mike Milovick]

Hi Raj;

1. You are better off buying resale than building new in our market place - unless you are a general contractor - for this type of building. 40+ units will be a solid construction building. Older, solid consutrction buildings are still trading below replacement cost.

2. Many realtors make attempts at calculating cap rates. I do on all my listings. Do they reflect all costs - probably not. Is it fair to penalize a good operator that has kept his building well-maintained through regular maintenance (higher costs) with a lower cap rate? Probably not.

As part of your due diligence process though, through a home inspection you can quickly determine an appropriate budget for maintenance and repairs. If you have a CMHC contact, they can also give you a rough, conservative, idea on what to expect on this item as well.

For property management estimates, CMHC can help here as well. You can also get estimates from service providers.

Ultimately, my focus would not be on cap rate. It would be on return on investment - and how the real estate investment compares to other offerings available.

Mike


QUOTE (RAJ @ Jul 18 2009, 10:34 AM) HELLO ALL:
1. Can anyone give me a rough idea of construction costs per square foot for a new apartment building with 40+units with full bath and laundry per suite?

2. Also,I am ready to purchase my first apartment building after owning many single family homes. I note that the cap rate that many realtors report does not take all expenses into account such as maintenance,vacancy, management fees....- should the "real" NOI not reflect this?-otherwise how can one accurately price a property. I am looking to purchase an apartment building but find this inconsistency in calculation methods surprising coming from "the professionals" ( no disrespect intended).

3.What is the going cap rate for apartments in Waterloo/Ontario?

Thanks in advance.

 

[MacGraham]

This Post Has Been Removed - Please No Advertising

 

[housingrental]

What apartment building has sold in the last year in KW with a cap rate of 10% or more - when factoring in true operational costs and immediate repairs needed? Which ones have you bought?

QUOTE (MacGraham @ Jul 28 2009, 05:35 PM) Hi Raj,
It sounds like you`re seriously looking for property here in K-W. My business specializes in finding properties well below value for our investors. We don`t even look at anything with a cap rate less than 10.
Send me an email if you`re interested.
mac@top-notchproperties.com
Mac