BFRR: Build Finance Rent Repeat

[Griffin Schermer]

Has anyone every tried a method where they build a home, finance it, rent, repeat? This could be stick built, manufactured, or prefab/modular. What kind of problems could arise?

Ex. 1200 sq ft 3 bed/ 2 bath modular build and land cost $100,000. The appraisal comes back at $135,000 so you pull out 75% LTV or $101,250 and you have a renter who is paying down the home while you stick a little extra cashflow in your pocket.

Obviously this is just a sample and not a deal situation I've actually been in...yet. I'm located in Southern Indiana, and after running some numbers on potential deals it seems like this may be possible. Thoughts?

[Jessie Bullis]

@Griffin Schermer I think a lot of us are starting to look at new ways to make systems work. I recently had the same thought to put 1-2 tiny homes on an acre or two and see if I could rent them.