BRRR for New Construction?

[Nicholas Spinazze]

Can the BRRR strategy be applied to new construction? It seems like you would add value by building similar to how you add value by rehabbing. If so how could I use the bigger pockets BRRR calculator for our situation given that last year we completed purchase of an empty lot which we split and are building single family units and ADUs on. We paid 120k for the lot and our construction costs are estimated to be 137 psqft. We are building 2700 sqft on each lot (including ADU sqft'age) for a total cost (including the lot) of approximately 859,000. We expect these properties to very conservatively appraise for 220 psqft, or 1,188,000. So it seems like we are creating 329000 of equity.

[Jeremy H.]

Are you paying for the new construction in cash?

What you're doing here is really just building at a discount. I would be careful with your expected appraisal amount just because I have generally found new construction to be more expensive than buying an existing structure. Now this may not be true for all areas but it seems to be the case with mine. If it were that significantly cheaper I think you would have a lot more building as opposed to buying existing homes...