Building &amp; selling a to-be-built multifamily development
Does anyone here have experience / is familiar with the "to be built" model of preselling a multifamily development? I am curious to the deal &amp; loan structure / closing timeframe for projects like this https://www.loopnet.com/Listing/407-12th-Ogden-UT/24151652/ I am thinking of using the approach to presell &amp; build 200+ tenant student housing to sell to a large fund or syndication group.
[{"id": "i9v1eyd", "text": "On its face I'm not sure how well it pencils at $298k/door with those rents.  That said I'd just contact those groups/someone who knows them.", "replies": [{"id": "i9vbykt", "text": "yeah, I'm sure they negotiated a bit. I actually found what I was looking for, which is to sell to a conglomerate like ACC (https://www.americancampus.com/owners-developers/develop-with-acc).", "replies": [], "depth": 2}], "depth": 1}, {"id": "i9vdlq5", "text": "Check out the seller\u2019s website https://summaterraventures.com\n\nLooks like they have two approaches. (i) Pre-selling the project outright or (ii) doing a JV where the buyer has to be the GP. Their JV structure isn\u2019t unique, they\u2019re just publicly advertising it more than most. \n\nPre-selling a multifamily development isn\u2019t common. It looks like their angle is to act as a sort of hybrid developer/GC. By pre-selling the project outright and making the buyer takeout the construction loan, they eliminate most of their development risk and make most of their money during construction.", "replies": [], "depth": 1}, {"id": "i9yrx6w", "text": "We typically develop, build, and Hold for 5 years before sale but in the last year or so we have Pre-sold a few different projects, that being said having a portfolio of past projects of similar styles and foot prints helped to accomplish that. I would plan to build and manage yourself until you at least get to the point where you have everything bid out, and your trusses and other Materials with long lead times bought so you don't run into time and cost overages, you may end up losing money on the sale if you pre- sell too immaturely based on factors out of your control.", "replies": [{"id": "i9yttwa", "text": "Hi, so we have developed student housing locally at one of the largest universities in the country for the past 20-25 years. We are still holding our most successful development of 180 student tenants. We wanted to replicate and sell a similar project, so we know our numbers, bids, and property managers, but are trying to source the buyers so we are at no risk.", "replies": [{"id": "ia2p8t0", "text": "It is good to have that down, but to be honest there is no way you can know your numbers with how much they are fluctuating right now, just on lumber alone we have seen one apartment building can be +/- $1 Million dollars in difference from the exact same building and foot print on a project we bid out 6 months earlier, and most of the big lumber suppliers aren't holding prices for more then 90 days.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]