instead of buying a multi family property can I bulild from scratch ?

[Elias Chacon]

Im a new investor in the real estate Buisness , I was just wondering , instead of buying a 2-4 or even a 5-10 unit property could I save me some money by building my own ? I know a lot of people in the construction Buisness so would that be a better way to go or bad idea ? 

[Joel Owens]

Hi Elias,

You would need to run an analysis of your market to determine what is possible.

For example if all you can buy is sellers wanting a 5 cap in your market with older buildings that those are tough deals to make work.

Instead if the pent up renter demand is there and you have a city or county that is pro-growth with planning and zoning than chances are good a new build might work. You might find with the cost to acquire the land, build the structure ( cost per sq ft ), etc. that you can be all in once leased up for an 8 cap. So you get a return by building new and have built in equity in the property and can sell in the market for a lower cap if you want or hold for cash flow etc.