Build to rent subdivision experiment!

[Michael Hawkins]

Investment Info:

Single-family residence other investment in Blanding.

Purchase price: $100,000
Cash invested: $100,000

Im pulling my equity out of a property, and building a 4 bed 2 bath 1400 sqft house. If it all works. I will have the home done for just under 100k. But it will be valued at over 250k. Ill then pull a mortgage on that home and then do two more homes. And so on, and so forth. I have 4 acres that im trying to subdivide into about 10 properties. So even after the road portion and extra parking, each property will be a full quarter acre.

I just dont know how it works to pull a mortgage on a new home if its just an investment property. Lots of research to come still! Havent quite finished drafting the home design so i have time to figure out if it will work.

What made you interested in investing in this type of deal?

My connections to contractors and people in that area make it so i can offset the build cost to value. So if i can make it work. Then focus on building at least 1or 2 homes a year. I can have my 10 properties built and fully paid off in 10-15 years by compounding the average rent down on the mortgages of the 4 or 5 homes with mortgages . Im wanting to continue to diversify in traditional investment properties in other areas. Especially after first couple are built. But main focus will be on thi

How did you find this deal and how did you negotiate it?

I had a idea for a house design and started talking with my contractor and he agreed that if we can make it work. The house costs would be super low! Which would have great opportunities because of that

How did you finance this deal?

Cash out refinance on another rental property.

How did you add value to the deal?

Im organizing the subdivision process. Drafting the home design plans as well as emp plans and coordinating with all my contractors to get set up to bust this out in great time once we break ground.

What was the outcome?

If it works. From my 4 acres of property in this city, i will have generated 12k of passive income. And 2.5m of equity. It may take 10-15 years to get there. But its a solid goal to focus on.

Lessons learned? Challenges?

Lots to learn every day. Every phone call brings more ups and downs. But most importantly, more knowledge that gets me closer to an end goal. Might just make this first house and pivot my plans entirely. 🤔 who knows! But for now. Thats the goal

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Lots of great contractors in south eastern utah 👍👌👏 if anyone is ever near there for rehabs, flips, or anything im sure i know someone to help