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Updated over 5 years ago on . Most recent reply

Account Closed
  • Developer
  • Old Hickory, TN
1
Votes |
5
Posts

New Construction vs Fixer Upper Duplex

Account Closed
  • Developer
  • Old Hickory, TN
Posted

We are considering building several duplexes (vs buying existing properties) and want to gain as much info from Experienced BP Investors as to the validity of our concept.  We figure that if we build a new property, the maintenance would be much lower and the interest of tenants much higher.  

We're struggling to determine IF Building new will Cash Flow compared to buying an existing property.  In the Metro Nashville Area, Duplexes are for sale at Premium Prices and Rents seem to be good but we are considering smaller towns around Nashville to build these Duplexes.  

We are considering Building a 4-Plex in Madison, TN, a suburb of Nashville, but are concerned because several investors on BP have commented that Nashville is a terrible rental market because acquisition costs are too high.  We are using a mix of private money and bank financing so we need to get this right and make sure to prove our concept.  On the other hand, we are super frustrated because we have waited so long to get started because the fear of failure has kept us on the sidelines.   

Thank you for any and all input!  David Lutz (Dave) 

Most Popular Reply

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Devan Mcclish
  • Investor
  • Nashville, TN
607
Votes |
688
Posts
Devan Mcclish
  • Investor
  • Nashville, TN
Replied

@Account Closed I own a 14 unit building in Madison we are renovating right now. We also manage 2 other units in Madison. I really like Madison. You can build very cheap, affordable units. You're also outside of the UZO so any type of sidewalk impact fee is ruled out. Madison you can still buy cheaper dirt and have rental rates that will get you to that 1% rule per se. If you build, you're cap ex and ongoing maintenance is very little if at all any. Now is the time to pull the trigger on Madison as renovation projects have been and are continuing to move in the area which will start driving prices up. Also just FYI, Madison "turn key" renovated duplexes I see are going for low to mid 200s. 112k per door is pretty good for that area now

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