Apartment Building Costs.

narommy

I know I'm going to get plenty of "how long is a piece of string" answers but here's my question a ball park answer will do. Please say whether your Guess included VAT or not?

How much would it cost to build a 4 storey apartment block with an underground car park. Say 40 units averaging 700 Sq Ft. 10 per floor.

Nothing fancy. Render and brick. In dublin.

This is just for a half baked idea i have so rough guesses are fine. Ranges would be even better

Thanks


I'm guessing €135+ 13.5% vat per Sq Ft,but i have no idea really

prospect

€135 per sq ft, i doubt it very much...

You are deff talking in the region of several million here.

el Bastardo

That's only if you're buying the land (which can be several million in the wrong part of Dublin). By building costs, I would have thought: planning (by architect/engineer), labour and materials.

narommy

at €135 for 40 units at 700 sq foot without the basement come in at €3.8m plus 20% for basement and contingencies. gives me €4.5m So yes Millions.

I'd already guessed at:
-€2m for all fees. legal, bank, and planning.
-A rough guess at €12k on top per unit for counci llevies
-A 12% deduction in proceeds for social housing of 12% of selling price averaged
-Interest at 8%


Just trying to see if somethin would work or not?

Also what range is building sites in dublin selling for. Say, city side of Dublin 12, 1.6 acre or .64Ha (without permission)

Reckin the one i've spotted is way too dear. would need to get 85 units ( would aim for 101 units) on .64ha averaging 700 sq ft €367k to be confident of breaking even and also need equity of €1m to get it off the ground.

FX Meister

Do you have any previous experience of building?

rooferPete

Hi narommy,

No piece of string content in this answer, I believe I have the perfect advisor for your project, no not me I leave project management at that level to the professionals and reap the rewards of their experience

When your ready to start spending on your real project costs let me know, and lets face it a few grand retainer is small change compared to what can save big money.

.

lomb

narommy wrote:

at €135 for 40 units at 700 sq foot without the basement come in at €3.8m plus 20% for basement and contingencies. gives me €4.5m So yes Millions.

I'd already guessed at:
-€2m for all fees. legal, bank, and planning.
-A rough guess at €12k on top per unit for counci llevies
-A 12% deduction in proceeds for social housing of 12% of selling price averaged
-Interest at 8%


Just trying to see if somethin would work or not?

Also what range is building sites in dublin selling for. Say, city side of Dublin 12, 1.6 acre or .64Ha (without permission)

Reckin the one i've spotted is way too dear. would need to get 85 units ( would aim for 101 units) on .64ha averaging 700 sq ft €367k to be confident of breaking even and also need equity of €1m to get it off the ground.

id say the price is dependant on the potential return. land without planning has a higher return as there is risk(or at least its supposed to, not sure whats happening in D4, that slightly over 1.6 acre site sold for 171 million) anyway a chartered surveyor/project management company as rooferpete says can give per sq foot costs. i have heard 100+vat banded about for apartments recently in the paper. i know normal costs are in the 150 range inc vat though.

u really want to know what u are doing, and no offense i dont think that you do. its a business that will punish you very severely if u get it wrong or can be very rewarding. start small and grow,and learn, there isnt any other way.

if u do want to go ahead with it look at current zoning(CRITICAL), current usage,adjacent building heights, adjacent building types( a mature area will meet resistance with high density development),recent planning applications locally for precedent, read the development plan, check densities, overdevelopment considerations, parking provision(minimum), check theres no river near by or if its on a flood plain or prone to flooding(an ABSOLUTE killer many bits of residential zoned land are USELESS because they have been entered on a computer database as prone or chance of flooding, and databases change... so whats ok one day, the land may be worthless the next), check rights of way, title, highway provision and access, and position of access (CRITICAL), site shape and size, presense of trees(take an axe to them b4 applying for planning or a protection order could be issued on them screwing ur plans and rendering the site worthless, listed buildings or monuments or anything of archtectural interest(another killer, many developers have torched building and left them like this until they get planning for something..dirty business..)

well the above is pretty much everything i know about land development, but i wouldnt be building 80 apartments anytime soon even if i had the dough. just dont know enough, and even if u know what u are doing ,the risk means that unless u have 3 or 4 things on the go(and the money for it and can balance risk it can wipe u if the one thing uve sunk everything into goes up the swanny. the old saying eggs and baskets is apt...

lomb

narommy wrote:

I'd already guessed at:
-€2m for all fees. legal, bank, and planning.
-A rough guess at €12k on top per unit for counci llevies
-A 12% deduction in proceeds for social housing of 12% of selling price averaged
-Interest at 8%

u forgot stamp duty at 9% on the site also.

narommy

lomb wrote:

u really want to know what u are doing, and no offense i dont think that you do. its a business that will punish you very severely if u get it wrong or can be very rewarding. start small and grow,and learn, there isnt any other way.

Good points.

Firstly I've got the Stamp Duty factored in. I've also added a 20% contingency onto all build/interest/professional costs

I'm in daydream mode at the moment. (a proper way of getting screwed) Changed my planned location already.

Starting small is fine but small sites can be more expensive and leave you at a disadvantage.

I've seen some people i've worked with practically loose money on projects that you think they couldn't loose money on. These were mainly those who bought the sites ready to go. These people are have vast experience but it doesn't work out?? So risky.

Anyways it's all highly unlikely to work out as there is a slight shortage of collatoral on my part and also there would be a slight credibility issue on my part. Imagine walking into a bank and asking for €4-6m and only putting up the €400k and without detailed costings.

I need a partner with more experience that would be willing to share project with me??

prospect

Isn't €135 per sq foot a bit optimistic from the outset?

That is roughly the cost of building a house, which will only have one plumbing system, one electrical system, one kitchen, 2 or three external doors, etc... etc..

Surely apartment costs per square foot are significantly higher?

lomb

prospect wrote:

Surely apartment costs per square foot are significantly higher?

nope, economy of scale, ie same kitchen, same electrics, same foundation,same roof etc.
u are forgetting an apartment building is made of precast concrete which costs buttons.
id say 100-120+vat is about right depending on finish and quality. a leading expert was quoting 100 in the papers recently.

lomb

narommy wrote:

I've seen some people i've worked with practically loose money on projects that you think they couldn't loose money on. These were mainly those who bought the sites ready to go. These people are have vast experience but it doesn't work out?? So risky.

unusual, property is rising 20% year on year, although i know building costs are rising also, but the site is where 75% of the value is. between the time of purchase and sale u are looking at a year if its ready to go. in this time u have already made money. they may have paid too much, tenders and auctions and even private treaty sales, can lead to a smokescreen and paying way over the odds. in all seriousness that 171 million for the d4 site is LUNACY, who knows what the story is. i dont think the developers have taken into account a cooling in the market for apartments due to bad news about service charges and delapidations, and furthermore supply hitting prices. ie an increase in apartments in d4 at 1 or 1.5 million will hit prices. its the top end of the market, its not starter homes, so it could all go pear shaped. sure as everyone knows when it rains it pours;)

perhaps they paid a premium because the possibility of increasing density and failed. usually knowledgable people dont lose money most of the time because if they did they wouldnt be driving aston martin db9s, and bentley coupes:D perhaps the loss is a ficticious one;)

patrido

narommy wrote:

Good points.

Firstly I've got the Stamp Duty factored in. I've also added a 20% contingency onto all build/interest/professional costs

I'm in daydream mode at the moment. (a proper way of getting screwed) Changed my planned location already.

Starting small is fine but small sites can be more expensive and leave you at a disadvantage.

I've seen some people i've worked with practically loose money on projects that you think they couldn't loose money on. These were mainly those who bought the sites ready to go. These people are have vast experience but it doesn't work out?? So risky.

Anyways it's all highly unlikely to work out as there is a slight shortage of collatoral on my part and also there would be a slight credibility issue on my part. Imagine walking into a bank and asking for €4-6m and only putting up the €400k and without detailed costings.

I need a partner with more experience that would be willing to share project with me??

i like your thinking - gearing up your 400k to do somthing big, rather than just buying one house and using it as a pension fund.

a bank is quite likely to give you a stack of money but they will expect a very serious proposal, professionally presented and they will compare it with all the other proposals from more experienced people when deciding who to give their money to.

you could consider doing a course with someone like the ices group. you would build up contacts through them, that would either give you advice and help (in return for a small cut of your profit) or bring you in on projects as a partner. a lot of experienced relatively small scale developers would be very happy with your 400k.

i'm not doubting your abilities, but most property developers have started small. i know several people who have gone into this field... they buy a 3 bed semi, professionally convert the attic and sell on at a profit. or buy a run down house, renovate or convert it to apartments, etc. others buy property and get a 6-10% net yield from rental, then sell at a profit a while later. they hone their skills, build up contacts, and get to know reliable contractors / solicitors / architects / engineers. they get to know how to pick good projects, and how to sell their ideas to financiers.

when they have several years of experience, they move on to developing their own bigger projects.

you either need to get this experience, or get in with a partner with the experience. and you won't find that on a gardening/diy forum. i know one or two people around here like to think they know a lot about everything, but if you go into a bank and ask for 6 million and use this forum as a reference... well you know what the reaction will be

lomb

patrido wrote:

a bank is quite likely to give you a stack of money but they will expect a very serious proposal, professionally presented and they will compare it with all the other proposals from more experienced people when deciding who to give their money to.

no offense patrido, the bank wont give a nickle without security and land without planning isnt worth alot and is bad collateral.
they will give the money if he can cross secure it to other property he controls if he has any, and the proposal is sound, but i doubt it personally. as u say it takes a few years to build up experiance and contacts and u note the flow of things etc anyone can lose money...

patrido

lomb wrote:

no offense patrido, the bank wont give a nickle without security and land without planning isnt worth alot and is bad collateral.

like everything else, land without planning is worth it's market value. in most cases the bank will make sure you don't pay more than this to purchase it. every step of the way they will be watching their exposure to risk. that's what i mean by a serious proposal.

they wont give the whole 6 million in one go up front... they will release it in tightly controlled stages. their security is the deeds to the land which is usuallly worth more than the portion of the purchase price they put up. 400k more in the current context.

most people think the price paid for the site in ballsbridge was crazy beyond belief, but ulster bank have put up a large proportion of that price. if they'll do that, they will finance a serious viable small scale apartment development. they do it all the time.

narommy

patrido wrote:

.

you either need to get this experience, or get in with a partner with the experience. and you won't find that on a gardening/diy forum. i know one or two people around here like to think they know a lot about everything, but if you go into a bank and ask for 6 million and use this forum as a reference... well you know what the reaction will be

My self and my friends (who come across several development projects) all agree that a track record is the key factor. To get the plan right and to get access to the cash.

As for the money, my €400k would only be accessable on presentation of a good plan but that needs the money to get the plan together.

Who are Ices??

Maybe mews are the way to start off?

But over the last 7/8 years i've seen several sites and said to myself that that would make a brilliant site for somethin or other and without fail they are developed shortly after.

My favourite was a house at the corner of Constitution Hill (comming from parnell square turn right to go up to Phibsboro) A smal ramshakle house Dreadful yellow windows that sold quite cheaply a few years back and not there must be 15000 sq foot developed on it. I'm really gussing at the size because i Haven't seen it in the bright yet.

Anyways.I'm a bit sick of the "should have" thoughts. Feeling very speculative at the moment.

The other problem is that i have a full time job and commitments that i need to meet. Thus my time is limited. (I believe that using good professionals would help in this regard)


As for Mr Grehan's purchase in Ballbridge, I've heard that if he gets 6 storeys he'll break even and anything over that will be profit.

Also I read that it was expeected that Sean Dunne would 2 beds at €1m but that Ray Grehan would have to sell at €1.5m. If I were Sean I would sell mine at €1.5m too and rightly clean up.

These guys can bid these prices because they have made so much money to date that they can afford to loose €50m.

narommy

I'm attaching a copy of my working. It ain't the clearest but ye wise people should be able to figure it out. There are 2 adjacent "sites" I've only included one of them. Based on precedent in the are the site would appear to be developable and 44 units could not be described as excessive

lomb

narommy wrote:

If I were Sean I would sell mine at €1.5m too and rightly clean up.

.

i would sell it for the maximum the market would bear, and if thats 900000, 1.2 million, 1.5 million or 3 million thats what i would charge most certainly.
many properties are sold too cheap, hence they sold with people queing overnight. thats a fatal mistake for a developer, sad but true...

rooferPete

Hi narommy,

That proposal is better some I have presented but not enough for the numbers you are asking for, then again meet the right lender on the right day and you could on a winner, just remember it's a gamble so you don't put up what you can't afford to lose.

Hi lomb,

I reckon part of the reason for properties being sold using he que system is some of the money borrowed can be at a premium, I know one lender who calculates the interest rate based on the potential profits.

Best thing to do with the likes of him on your back is get the cash flowing and fast, the trick is to take the profit while it's on the table because by tomorrow the overhead could turn it into a loss.

The high rollers very rarely play the game with their own cash, the likes of Ulster Bank will have spread the loan out among a few cash rich investors, that's where the safety is the more names on the board the thinner the risk is spread.

If the bank can walk away with 20% profit on the loan that's not a bad day's work by any standard the remaining 80% is spread among the pension funds and insurance companies.

patrido,

The best position to be in where banks are concerned is owe them plenty and make your payments on time, it doesn't matter if it's the subbies money you are using, sometimes even better for the banker because he gets another piece of the action funding the contractors.

My concern on a poject like this is the bank can walk in and take it over anytime because there appears to be a lack of ready cash as back up.

Always have a Solicitor read the fine print before signing for the loan

.