BRRRR or Build from scratch

[Rob Bianco]

Looking for a bit of advice on how best to deploy my $250k budget. I'm an out of stater investing in Kansas City and I've been working with my boots on the ground to scour the market for potential BRRRR or flip opportunities, but it's hard to find inventory since the market is booming. I'm not really satisfied with picking up 1 SFH every 3-4 months .. seems like I could churn out more if I had the availability.

I've been thinking about buying a lot of land zoned for multi-family and utilizing my capital to just build multiple duplexes. I could build one, sell it (or keep it as a rental), take my gains to build the next one, rinse and repeat, or apply for a construction loan to build them all at once. I'm not sure if this is a realistic goal in today's marketplace, but in my head it sounded a lot nicer than sitting around waiting for the right house to go on sale or go up for auction. 

Would definitely like to know if anyone has done this before or had experience doing something similar.

[Lee Ripma]

@Rob Bianco

It's tough to make the numbers work on new construction vs the price of renovating existing stock. If you build a duplex that is a 3/2 1250 sf for 110 sf you're looking at 275k in construction alone. That doesn't take into account any of the soft costs, costs of land, or construction overruns. You can back into areas where this will work bases on values and rental rates. It's not in the working class areas of KC where traditional BRRRR works.