All Forum Posts by: Clint Absher

Quote from @Jonathan Greene:

I would stay residential (4 units or less) to start unless you have management experience. Also, your loan will likely be more advantageous as a residential investment property right now. Where do you live now and how did you choose those markets?

I would not invest out-of-state into 4 units to start. If you are going out-of-state, I would get a single-family to start as a test, or at worst, a two-family. You would be putting too much risk on a new area that may or may not work.

A 4-unit property has 4 furnaces so you could have 4x the cap ex as a single-family on mechanicals.

Appreciate the reply. My background is in construction and entitlements. 

I’m building an 18-unit in Pierce County, WA right now. I have not bought anything that’s already built or in another state but trying to find another state with lower barriers to entry. WA is too expensive and property owner rights for rentals isn’t as good. 

 
I chose those locations because of cost and cashflow percentages from the BiggerPockets map on where to buy. 

Looking at buying a long term rental and have some money set aside to get started.

I've looked into OH, NC, IN as states to invest.

If you're starting from scratch where are you putting your money and why?

I have been taught to back into the price on what it's worth to pay.

I'm in Pierce County, WA.

For me, if I have an opportunity at 40 townhome lots I am figuring probably 250-300k in all the soft costs and city/county review fees. My townhome development in WA was under 200k for 18-units to get full building and civil permits.

So hypothetically, if you think it's worth 100k per door at preliminary approval before utilities and improvements maybe it'd be worth paying 50-60k per lot. Add in 250k in development costs and you're in at $2.25-2.65M (plus any loan carrying costs) and sell the lots for 100k per door or $4M.

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $725,000

18-unit townhome new construction development

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

Construction and real estate investing background.
Interested in the entitlements process and value add to land for new construction.

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

Friend's high school teacher owned the property.
I negotiated the deal and structured the proforma.

How did you finance this deal?

Partnership of a group of 4 people.

How did you add value to the deal?

Entitlements, new construction

What was the outcome?

Construction began August 2024.
Anticipated completion of Fall 2025.

Lessons learned? Challenges?

Lots learned from this one and excited for the next opportunity.
Timing the market, timing and relationship with the city, relationships with contractors and lenders.