New Construction Decatur, AL

[Treza Edwards]

I have 2 empty lots that I want to build 2 rental properties on in Decatur, AL, but there is not a lot of new construction in the area. I am not sure how to analyze the numbers. I probably can get 1500-1800 per month rent for a 3 bedroom, 2 bath (appx 1200 square feet) and can build for 174,500. I need help analyzing if this would be a good deal. There are new construction homes about 2-3 miles away going for 190-200,000 but I think they may be a bit larger than what I am building. Used houses in the area sell anywhere from $75-125 a square foot.

These are long term rentals that I do not plan to sell.

I am reading the Rental Property Investing book and implementing the method that focuses on cash flow and that strategy states you need to have $300 cash flow per month, per property. I am not sure if I can put zero for capital expenditures, since it is new construction. 

I have never built anything, only purchased already built properties and I need some advice.

Thanks!