Rent to Build myself: Melbourne, FL

[Craig Daniels]

Hi - BP has been a tremendous help so far, so I thought I would try out this new question.  I am looking for my second rental, BP has gotten me in touch with some really great folks in the Rent to Build space and I am researching that in the Ocala/Inverness and Jacksonville areas. 

But then I was thinking to myself, the lot directly behind my current rental, in a fairly mature neighborhood, is empty.  I was thinking about buying the land (maybe it is 20-30k for the .25 acre lot), finding a builder in the area, and seeing if I could build a ~1,250 sq ft 3/2 single family house and see if I could make the math work.  I don't know any builders here, so I am wondering a few things:

- Does anyone have a builder that would be interested in doing a single infill project (there is another infill lot going up on the street, might try and connect with them)

- I am in between paying for it myself with cash during construction (maybe the home will cost 150-200k to build?) and then getting a standard mortgage after that vs. getting a construction loan to pay during the build and then convert.  I don't mind cash out of my pocket for the 6-9 months of the build (guessing at duration here). 

- Rents in my area for a 3/2 SFR are 1,800 - 2k per month (probably closer to 2k for a brand new house); so the land + house cost is going to have to be below 200/220k all in to make the math work at current interest rates. Maybe I even pick a 4/2 floor plan to eke out some more rent.

Any thoughts on my approach?  Coaching or areas I should be thinking about or looking into with this idea?

First step is to figure out how to buy the land (if it is even for sale); I have the name of the owner from the tax rolls, so I think I will start there. 

Thank you in advance for any feedback!

Craig