Shared Housing Dallas

[Heyhello]

Hello All,

I’m a first time builder who is currently getting architectural plans made for my project. I am looking to build a 6 unit building in Dallas TX (75215), and I wanted to see how you all would appraise the property.

The land is zoned MF-2(a), which is Multifamily, and we plan to rent out each bedroom individually. Each unit will have 4 bedrooms, which is the limit of unrelated people living together in one unit before you run into “boarding home” or “group residential facility”.

I plan on having no living room in the units, just a shared kitchen/laundry room. Each bedroom will have its own private bathroom (shower/toilet/sink).

We are able to satisfy the density limitations/lot size requirements, and off street parking requirements per zoning.

In total, there will be 24 bedrooms and 24 bathrooms. We will rent each room for approx $800/month. ($230k/yr gross)

I was wondering, in very rough numbers, what this property would appraise for?

More details below:

Total building sqft: 4,800
Stories: 3 (1st floor is tuck under parking)
Single unit: 800 sqft
Bedroom size: 118 sqft
Bathroom size: 32 sqft
Kitchen: 150 sqft
Finishes: Mid level
Units are accessed from exterior staircase

My assumption would be the appraisal is based on income. Additionally, I’m not sure there are any good comps in my area to look at.

My idea below:

$230k (gross) * .5 (50%expenses) = $115k NOI
$115k/.07 (cap rate) = $1.6M

Let me know if I’m missing any necessary details or if I’m completely off!

Thank you!

 

[Tim Hicks (Texas)]

You should employ a good commercial appraiser in the Dallas area to answer these questions. I don't think random appraisers from across the nation can properly answer these questions. If they do, they would rightfully like to be paid for their services.

 

[sputnam]

No one in this forum is likely to answer your question. Any opinion of value (and that includes a point value, a range, or a direction of value, from an appraiser), must comply with USPAP. That includes researching data, analyzing that data, forming and supporting conclusions, and creating and keeping a work file for at least five years. No professional appraiser is going to do that for free.

 

[Tom D]

big city, with the big universities. there is a big need for student housing. most single family & multi, near them, have been rented to students. the city ignores the amount of non related people in the unit because the universities are big employers. your property will appraiser based on 2 items. condition & the capitalization of rental income.
for a 1st time builder. you are taking on too big of a project to do. you should have started much smaller to gain experience. seen it too often when the developer does the next bigger project, to big, and loses control of it. but you may have a big bank account for any mistakes you will obviously make, but not known to you at this moment. your lender will do an appraisal before they invest any money.

 

[Terrel L. Shields]

we plan to rent out each bedroom individually

Is that legal under the zoning? If anticipating a higher income approach, that sounds more like AirBnB - and that is a business enterprise - so are you providing the furnishing and beds? Personal property.