BRRRR FHA new development in Blacksburg Virginia?

Question

So there is some new development in Blacksburg Virginia(collage town Virginia tech) Townhomes are starting at 370k single family, these are luxury quality homes. My question to you guys is do you think this would be a bad first investment? Yes it would be my first home/ investment property I make enough money with my day job to pay for the mortgage and not be just scraping by, In my mind it would be a good for equity building, after a year of FHA I'd rent out the home, and use that equity for a 1031 and get a bigger and better property. It's a college town full of rich kids with rich parents so I don't think think finding a tenant would be too hard if they are screened correctly. 370k seems steep But I think it would be good for cash flow and equity building in the years to come. Stateson homes is the builder. Let me know what your opinions are on it. Thanks!

Tom Sproul · Answer

Tre,

I live just down the street from those townhomes and have been watching them go up. It really depends on your investment philosophy. Because it is new construction in an HOA, it makes a lot of sense if you are not very "hands on" when it comes to sweat equity. If you have a solid income and do not want the time, energy and headaches of renovations, and plan to buy in the path of progress and hold for a long time, then it is a solid choice.

I purchased a townhome several years ago just outside Blacksburg thinking I'd rent to grad students, and about half the time I actually rented to professors for VT and Radford. The location of those townhomes would make it a decent commute to either University.

If you have any questions I'm happy to be a resource.

Jeremy Hart · Answer

Good morning, @Tre Rea - yes, I know just what you’re referring to. That’s been a neighborhood that people have been watching prepare for construction for some time, and I know Stateson is pushing to get them up quickly.

I can’t say that they would or would not be a good investment, but beyond your normal “what’s the cash flow look like” considerations, there are a couple of other things you that you might want to consider:

1 - HOA. This isn’t the type of neighborhood built with the student population in mind. We’ve seen several of these types of communities build in to their HOA and Covenants rental restrictions that prevent certain types of rentals, to some degree. I haven’t read every phase here so I can’t say, but happy to get you in touch with someone who can tell you that right away.2 - Location. This is not your typical student housing location. Assuming you’re unfamiliar with the area (apologies if you are), it’s about five miles outside of campus, and semi-rural. I own a rental close by; the vast majority of inquiries we get on that property are professionals. This might not be a location that’s going to hit the affluent student population you’re looking for.

Happy to share what I can.

Hamp Lee III · Answer

If the numbers work, it’s a good investment. Start small and take action.

I wish you all the best.

Tre Rea · Answer

Thanks you Jeremy you’re response is much appreciated, I’d love any help from yourself or anyone else that can provide any type of information

BRRRR FHA new development in Blacksburg Virginia?

BRRRR FHA new development in Blacksburg Virginia?

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