BUILD, rehab, rent, refinance, repeat

[Alexander Hauk]

I am in Oregon. Houses are expensive here.

Why don't I see more BRRRR strategies that involve BUILDING vs buying a distressed property?

I understand the numbers may not line up in certain areas although in Oregon I can develop a property as follows:

$30,000 for a lot

$40,000 to develop

$120,000 for Hiline, Adair, or Simplicity to build

$190,000 all in for a 3/2 home with garage worth $275,000 pretty easily.

Cash out refi at 85% LTV giving us:

$233,750 - $190,000 = $43,750 plus whatever down payment we put.

This would rent for $1,500 to $1,800 a month.

What am I missing from this scenario?

Why bother rehabbing if this can be done?