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Updated over 4 years ago on . Most recent reply

User Stats

22
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8
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Sean Ezeamama
8
Votes |
22
Posts

New Construction House Hack?

Sean Ezeamama
Posted

Hi Guys,

I've been following BP for a couple of years now, I'm 27 finally left NYC (moved to Philly) and have been house hunting for the last 3 months.

I started off looking at distressed properties around 150K-200 with the thought of renovating. I have no experience and a pretty solid financial situation (from stock investing) so, recently my real estate agent and I have been looking at new build DUPLEXes in the philly area. New builds get a 10 year tax abatement :) (no tax essentially), would be easier to rent, get more rent and likely less maintenance in year 1-3.

Cost: 500K (roughly) 

Down Pay: 3.5% (17,500) 

Potential Cashflow on 2 units: 4K 

Est Mortgage: 1,750 + ~200 (adding a buffer for misc expenses) 

My thought is, since it's my first property and I'm ill equipped to do a renovation. Would it make sense to put 3.5% down on a newer build, leverage my credit and income for approvals and have instant cashflow on a property? 

The reason I ask, is because most of what I've read on BP and a lot of the BIG WINS I've read about, come from buying low, building equity and renting out or selling at a much higher rate. 


That said, there's a million ways to skin a cat! My goal is to have 1,500-2K of cashflow which would mean I get my $ back year 1, barring disaster. 

I'd love to hear some thoughts , what to be aware of .. And please let me know if I was light on information, I'm happy to add color. But my question is more conceptual in nature.

Thanks BP community, I'm super excited for this adventure. 

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