I’ve recently saved up $50,000 and I’m super excited to jumpstart my real estate investing journey. I’m looking at two specific markets—Charlotte, NC, and Louisville, KY—but now I’m at a bit of a crossroads and could use some advice from this awesome community: should I use this money to rehab a multi-family property or go for new construction? My goal is to sell for a profit either way, but I’m not sure which path to take.

Rehab: The Tried-and-True Path

Rehabbing multi-family properties has been a staple strategy for a lot of investors. Here’s why it’s got me interested:

1. Lower Initial Costs : Buying a fixer-upper can be more affordable than starting from scratch. With $50,000, I could cover the down payment and some renovation costs.

2. Faster Turnaround : Depending on how much work needs to be done, the project could be finished quickly, allowing for a faster return on investment.

3. Established Market : There’s usually a steady demand for renovated properties in established neighborhoods.

Both Charlotte and Louisville have neighborhoods ripe for this type of investment. In Charlotte, areas like NoDa and Plaza Midwood have older properties with potential. In Louisville, neighborhoods like Germantown and Shelby Park offer similar opportunities. However, rehabbing isn’t without its challenges. Unexpected issues can pop up, potentially leading to budget overruns. Plus, managing contractors and ensuring quality work can be tricky for someone just starting out.

New Construction: The Modern Approach

On the flip side, new construction offers a different set of advantages:

1. Customization Building from the ground up means complete control over design and layout, ensuring the property meets current market demands.

2. Fewer Surprises : With new construction, there’s less risk of hidden issues like outdated wiring or structural problems that come with older homes.

3. Potentially Higher Profits : New homes can often command higher prices, especially if built in desirable locations.

In Charlotte, new construction is booming in areas like South End and Ballantyne, while Louisville has growing interest in neighborhoods like Norton Commons. But, new construction also has its own set of hurdles. It typically requires more capital, and the timeline to completion can be much longer. Zoning laws, permits, and construction delays can also complicate things.

Seeking Your Advice

So, I’m turning to the BiggerPockets community for guidance. If you were in my shoes with $50,000 to invest today, and focusing on Charlotte, NC, or Louisville, KY, how would you proceed? Would you opt to rehab a multi-family property, leveraging the lower costs and quicker turnaround? Or would you go for new construction, aiming for higher customization and potentially greater profits?

- What are the key factors you’d consider in making this decision?

- Have any of you successfully navigated both strategies, and if so, what lessons did you learn?

- Are there specific market conditions or trends in 2024 in Charlotte or Louisville that might influence your choice?

I’m eager to hear your experiences and insights as I embark on this exciting journey. Your wisdom could help shape the path of a new investor looking to make a smart, informed decision.

Thanks in advance for your valuable input!

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I hope this blog post sparks some great discussions and provides me, and hopefully others in similar situations, with the clarity we need to make the best investment decisions. Looking forward to hearing from you all!

Charlotte, North Carolina

2 Votes