New 4 plex build cost

mike zayonce

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REIN Member
Hey everyone I'm looking to buy a property in Edmonton area zoned to build a 4plex and was hoping someone could help me with a rough idea of cost to tear down and build a new 4plex. I wouldn't do it for probably 5 years but I'm hoping to get an idea on the cost. Take care
 

Martin1968

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What is the plan? Building units to rent out as a MF building or building separate title units to sell off.
 

Thomas Beyer

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Assuming 1000 sq ft per unit, budget $200/sq ft hard cost or $200,000 PLUS soft cost ie architect, permit, off site levies like DCCs, insurance, utilities, demolition, interest on loans, legal fees for strata, surveying, taxes, engineering .. so maybe $1M for 4 units.

Likely NOT (!!) worth it unless each unit can be sold for $350,000+. Can they ?


What did you pay for the land?
 
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Martin1968

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Buying a Rental 4 plex is a lot cheaper then building. Also keep in mind the upfront cost as besides buying a lot you would need a construction loan (unless you have lots of cash on hand) so do your homework on whats involved.
The only option to make money if you were to build is to build large luxurious units in a good neighbourhood that can fetch a high sale price.
 

mike zayonce

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REIN Member
Thanks for the replies guys the house would cost about $195,000 and is in need of some freshening up and is older but very rentable for roughly 1400 -1550 a month. I was just trying to explore different exit strategies for the future if I purchase it.
Take care
 

Thomas Beyer

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REIN Member
Thanks for the replies guys the house would cost about $195,000 and is in need of some freshening up and is older but very rentable for roughly 1400 -1550 a month. I was just trying to explore different exit strategies for the future if I purchase it.
Take care

Upgrade only sensibly and rent it out managed impeccably. Don’t over-upgrade.

A 4-plex construction is a far riskier and costly undertaking.

Can you add a legal suite in basement for a second income?


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 

Matt Crowley

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REIN Member
$200 PSF is way too high to build for hard costs. Somewhere $110 - $130 more likely. There are soft costs on top of that (insurance, professional fees, survey, legal, rezoning, admin, development management, ect) and financing costs.

Altus publishes a cost guide as a starting point https://www.altusgroup.com/services/reports/2020-canadian-cost-guide/

Rounding off the answer here, unlikely a fourplex will ever pencil in Edmonton right now at rental rates.

Google 'residual land value analysis'. That is what Thomas is referring to here. It is a good method for something like this.

Companies that make 'four plexes' work build very modern and cool fourplexes in up and coming and trendy neighbourhood. RNDSQR in Calgary is a good example. But you need to sell as condos to hit your pro forma.
 

Developer

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$200 PSF is way too high to build for hard costs. Somewhere $110 - $130 more likely. There are soft costs on top of that (insurance, professional fees, survey, legal, rezoning, admin, development management, ect) and financing costs.

Agreed.

Companies that make 'four plexes' work build very modern and cool fourplexes in up and coming and trendy neighbourhood. RNDSQR in Calgary is a good example. But you need to sell as condos to hit your pro forma.

I don't think RNDSQR has been very successful with this model lately. It looks like most of their recently completed projects and projects under construction weren't selling well so they have shifted to make them rentals. Building expensive, modern units would probably work better in markets like Vancouver or Toronto. Not so much in Calgary or Edmonton these days.
 
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