@Susie Lowe Great questions. My situation may be a bit different than most. I represent a builder, Volcommon, that builds off market brand new multi-units. Basically, we target high employment with low vacancy areas, and find pieces of ground in those locations that make sense from a numbers perspective (cap rate and cash flow). We tie up that piece of ground and then we will pre-sell that entire project to our investors. So I'm a little bit bias with your question and would say new construction all day long. I'm sure there are great existing duplex/investment options as well but I've found them in new construction. Personally, I don't like the idea renovating an existing duplex or 4-plex. A lot of times when you rehab or put money into a unit your numbers (cap rate) will change drastically. I've love my new units in the fact they are low maintenance with very few (if any) problems. I enjoy what I do, family, life, therefore, my time is too valuable to be doing a renovation and quite honest I just don't have the passion to do that like some do. Also, the newer multi-units I have are usually worth much more than what I'm buying them for because I'm coming in at an early stage in the game. It's not uncommon for our investors to purchase a multiunit with 50-100k of instant equity. That's why renovating something existing just isn't that exciting to me. Now the disadvantages of new construction;
1. You may be required to take on a construction loan depending on the builder and what their set up is.
2. You are having to wait 9-12 months for it to be completed, therefore, you won't have any rental income during the build period.
3. The numbers you purchase from are a proforma and they aren't actually numbers, they are projections. (With the right due diligence and know how you can help to eliminate this concern.)
I think there's opportunities in both but I've found mine in new construction. Here are a couple of key indicators I would look for; location, low vacancy, low maintenance, solid cap rate (A true cap rate with ALL expenses and true rents), cash flow. With the right due diligence the numbers will help you sift through which investment properties are better than other ones. Feel free to reach out to me directly with any further questions! Happy hunting :)