If you’re investing into real estate, there will be multiple projects and deals to choose from. Sometimes these projects will coincide with each other, which will keep you busy. We have ongoing projects, expansions we’re looking to move forward, etc.. Read on to learn more about our ongoing projects, the process of expanding your business to another state, the struggles of construction deals and more.
Ongoing Real Estate Deals
We are excited for our Dodge Road project because we’re going to be able to build this project out. Our whole team is working on it and it’s going to be a $5.5 million deal once we have it all leased up and tenants living there. It’s going to be a great project.
We’re looking to expand out of the Western New York area and move more south. In North Carolina the rents right now are $1,000 a month. We can go up to around $1,400 per month which would be good for the value of the property. That’s how we’ll be able to get our increases, by spending about $10,000 per unit and then refinancing once we get the increase in rent. We’ll be able to do 2-3 units a month, which will run smoothly. The one thing we have to figure out is our team down there. We have to make sure we can get the manpower to get everything done, but we have different subtractors and workers who are going to help. We’ll also have some guys on our team now who will be able to help once we further our portfolio South. We are looking forward to these types of real estate deals.
Land deals are really competitive. Some of the deals we’re trying to put offers on have hundreds of people who want to put these deals under contract and build them out. However, we have pretty good relationships with the sellers of these properties and we’re able to, just through our relationship, put deals together. The sellers know, like and trust us, which is why we have an advantage over some of the competitors. That’s an important factor when you’re putting deals together. A seller always wants to know you’re going to be able to close on the deal. They won’t work with someone if they’re not confident they can close the deal.
This year, we’ve been worried about doing construction deals because the lumber index has skyrocketed. The index used to be around $1,900 and that went up from a range of about 300. Now it’s coming back down and it’s in the 400 range. With the lumber index coming down, land deals and buildings have become more attractive again.
Other materials are still higher in price, but now it’s becoming more realistic. You can build new construction projects reasonably again. Earlier this year we were worried about not being able to do our construction projects because of it being cost prohibitive. Now some of the costs are coming back into range, so it makes sense to start construction on new apartment buildings. That’s what’s fueling all of these new deals we’re trying to put together. In total, we have about 3 or 4 land deals that we’re trying to lock up. We won’t get them all, but we’ll get some of them. It’s going to work because costs are coming back down.
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