A Little Discussed Topic - New Construction Housing in Columbus OH

[Robert Ellis]

As a licensed general contractor and demolition contractor in Columbus, I was recently approached by a biggerpockets member who was looking to build a house in Hungarian village. This got me thinking about another topic in Columbus that is very seldomly discussed and I wanted to get some feedback on from OOS investors. 

If you don't know much about the new construction housing shortfall in Columbus, I would start by reading an article by McKinsey: https://www.mckinsey.com/industries/social-sector/our-insights/sustainable-inclusive-housing-growth-a-case-study-on-columbus-ohio#

One of the problems with Columbus is the cost of new construction with basements is substantial. I spoke to a national vendor called Mighty Buildings yesterday who have raised hundreds of millions of dollars for alternative prefabricated panels. When I spoke about Columbus, which is a traditionally stick built market compared to the steel they have and sloped roofs not flats, they didn't really have a solution. They also work with major developers not smaller infill builders and do not have a design team which shifts the burden back to the builder. 

Here is an article that gives a little bit of background about them: 

https://techcrunch.com/2023/09/12/mighty-buildings-raises-52...

Either way, I don't think our new construction model is going to change any time soon. The majority of homes are stick built through traditional methods when you build less than 100 houses a year it's hard to do it any other way. 

With the shortage of multifamily product for class B and class A investors or larger multifamily investors and with the emergence recently of investors looking for land even on biggerpockets, I was hoping to get a discussion going for out of state investors looking to grow in Ohio but not necessarily through acquisition of existing product but through new construction. The investor I was working with here is building a single family home from scratch on a lot he got for less than $35,000 and should be able to put permanent debt and pull out all of his initial capital and he's going to be in a much better position from a maintenance perspective. 

Please chime in and let me know your thoughts