BRRRR Without Repairs Using Production Built New Homes

[Kevin Hoodwin]

Howdy y'all. This is my very first BP post... I'm excited to actually be participating now!

Anyways, I have a strategy that I'd like to run by everyone and see what opinions y'all have.  My idea seems to work, but I'd like to run it by y'all for advice.

The plan:

1) Purchase new built homes when a builder first starts developing a neighborhood and/or when they are trying to sell out of a neighborhood at the end of development.  Builders are incentivised at these two times by their banks to get homes sold faster to gain access to more funds.  This can mean discounts for us investors!  I know this because I've worked in and with production builders for years now.

2) Finance the deal through a traditional mortgage in an LLC at 80% of the list price (which would be lower than the market value).

3) Either do 

A. A mortgage wrap with owner financing to individuals that cannot qualify for a loan 

or...

B. Rent the property out to tenants if the rent can sufficiently cover costs plus have some cash flow.

4) Refinance at 80% of the market value.  This would cash me out of the property or leave very little in it.

5) Repeat...

This is effectively an alteration of the BRRRR strategy that involves newer homes, no repairs (plus repair warranties), and refinancing with the same conventional loan. Any and all feedback/criticism accepted!

Is there a problem in buying from production builders?  Even if I'm buying at a discount?

What issues could arise during financing?  Are there other financing options that could work better?  i.e. hard money, private money, portfolio loans, etc...

What additional problems could pop up when refinancing (other than appraisals)?

Is there anything about this strategy that you'd change or modify?  Is it even a good strategy?

I look forward to hearing what y'all have to say!  Thank you.