Buy/Rehab/Flip/Rent Vs. Purchasing New

Investor · SC · Member since 2023 · 18 posts · 8 votes

Needing some insight into investment strategies. I'm used to buying distressed properties and rehabbing them with the purpose of renting or flipping them (for the right price); however, I'm also in a market area where buying new construction may be the same price or at the most only 15-20k more than the renovated distressed property. Considering the price points, and the potential appreciation of a new build, am I stupid for not wanting to go through the pains of rehabbing? I've been conditioned to buy dirt cheap with all of the head aches that the renovation may bring, but the new builds at the prices I'm seeing are almost a no brainer for me. I am ?i wrong for this assumption?

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Terrence TerrellBusiness Member

Lender · Chicago, IL · Member since 2015 · 35 posts · 8 votes

Hi Felicia,

Not wrong at all. I'm a numbers guy so I look at the cost vs the return. But you also want to look at the opportunity cost that you're paying tying up your time and efforts in a rehab. Does that $15-20K that you'd save rehabbing make a large difference in your monthly payment when all is said and done?

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Terrence TerrellBusiness Member
Lender · Chicago, IL · Member since 2015 · 35 posts · 8 votes
2y
Hi Felicia,
Not wrong at all. I'm a numbers guy so I look at the cost vs the return. But you also want to look at the opportunity cost that you're paying tying up your time and efforts in a rehab. Does that $15-20K that you'd save rehabbing make a large difference in your monthly payment when all is said and done?
[email protected]847-208-7309
A and N Mortgage552 Reviews
Website View Page
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Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
2y
Quote from @Felicia Walker:

Needing some insight into investment strategies. I'm used to buying distressed properties and rehabbing them with the purpose of renting or flipping them (for the right price); however, I'm also in a market area where buying new construction may be the same price or at the most only 15-20k more than the renovated distressed property. Considering the price points, and the potential appreciation of a new build, am I stupid for not wanting to go through the pains of rehabbing? I've been conditioned to buy dirt cheap with all of the head aches that the renovation may bring, but the new builds at the prices I'm seeing are almost a no brainer for me. I am ?i wrong for this assumption?

RE is all about numbers, which ever makes more sense. All my props are built from 1910- 1930, just reno properly
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Stephanie Walker
Realtor · Charlotte, NC · Member since 2023 · 245 posts · 231 votes
2y
Hey Felicia, you’re not wrong at all. As a realtor and investor myself, my husband and I only purchase new construction: both for investments and for personal primary. While the price points are similar, the biggest difference is your ability to take your initial capital back out quickly. However, as you said, there is a time cost and headaches that go along with that. It really depends on what you’re comfortable with financially. I’m happy to talk it out with you.
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Wyatt WolffPro Member
Lender · Charlotte, NC · Member since 2019 · 467 posts · 278 votes
2y
As states by Terrance, you have to factor in your time as well. Evaluate what best fits your needs, and then go after that.
Also, don't discount the transaction fees associated with Fix/Flip loans (if that is the direction you'd are going), and the fact that a lot of rehabs have hidden things you only find once you start work.
Best of luck, keep us posted!
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