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Updated about 6 years ago,

User Stats

21
Posts
2
Votes
Trevor Deeter
  • Newtown, PA
2
Votes |
21
Posts

First Timer Wondering... New Construction or a Flip/BRRRR?

Trevor Deeter
  • Newtown, PA
Posted

Hello fellow BP'ers!

My wife and I are ready to deploy our nest egg into REI. We are free from the confines of a traditional work schedule and can really dedicate as much time as is needed to manage and maintain our hopeful real estate business. My wife has strong managerial and book-keeping skills and could likely handle GCs quite well. I am a licensed realtor in PA, so I have specialized skills in other obvious areas of the business.

We have a few approaches that we've considered in how to deploy our money for it's first cycle, and would appreciate some feedback from those with greater knowledge.

Between our liquid assets and access to loans, we have the option to spread our nest egg out over several projects. Our aim, much like many BP'ers, is to have a flip business that supports scaling our buy-hold rental portfolio. We are hoping to buy between 4-6 properties during our Q1. We'd hypothetically buy a mix of flips and BRRRRs, all highly distressed, all would cash flow, and all in speculative up & coming neighborhoods. First off... is this too ambitious for first-timers?

In general, how much of your time as an investor is spent enmeshed in the renovation process once it has started? Aren't we just planning with our GCs and then our GCs handle most of the grunt work during the reno phase? Other than my wife and I checking in on our GCs, what type of work load should we be prepared for in this phase? Is it really going to be hard to oversee 5 renos at once? I'd like to think we're capable, but would hate to dive in and find out I'm wrong lol!

On the other hand, we have opportunities in our city to buy either vacant land or knock-downs in rapidly appreciating areas, put up new construction, and make an absolute killing. Inventory in these areas sell within days, if not hours. Is the notion of rookies taking on a demo and build-out of new construction again too ambitious? We could find ways to still have multiple projects going on even though this option would absorb more money. We could still always use OPM/loans to pursue other opportunities while the project is being built. 

We would love to pursue the new construction option since we could probably be all-in for 350k and sell for 525k+. Right now, we have an opportunity to submit a bid on a piece of land that would yield an incredible return if we built on it. But friends of ours who are in the business have advised that we shouldn't start out with a new construction project. We really don't know anything about new construction, nor do we even know any builders yet.

Would love to hear how all of you might structure your nest egg in our position.

Appreciate all the feedback I might get here!

Thanks!

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