All Forum Posts by: Colby Boone

Quote from @Mike Klarman:

With 50k, I'd say you'd want to have a downpayment of no more than 30k.  You'll want 20k in reserves for holding costs and any misc. costs and you do not want to drain your capital down to 0.

I think the max entry point for you on a house that needs work is 150k - 175k.  Do those markets offer such opportunities? 

 Sure does in Louisville ! Thanks for commenting ! 

Quote from @Robert Ellis:

Quote from @Colby Boone:

Hey everyone!

I’ve recently saved up $50,000 and I’m super excited to jumpstart my real estate investing journey. I’m looking at two specific markets—Charlotte, NC, and Louisville, KY—but now I’m at a bit of a crossroads and could use some advice from this awesome community: should I use this money to rehab a multi-family property or go for new construction? My goal is to sell for a profit either way, but I’m not sure which path to take.

Rehab: The Tried-and-True Path

Rehabbing multi-family properties has been a staple strategy for a lot of investors. Here’s why it’s got me interested:

1. Lower Initial Costs : Buying a fixer-upper can be more affordable than starting from scratch. With $50,000, I could cover the down payment and some renovation costs.

2. Faster Turnaround : Depending on how much work needs to be done, the project could be finished quickly, allowing for a faster return on investment.

3. Established Market : There’s usually a steady demand for renovated properties in established neighborhoods.

Both Charlotte and Louisville have neighborhoods ripe for this type of investment. In Charlotte, areas like NoDa and Plaza Midwood have older properties with potential. In Louisville, neighborhoods like Germantown and Shelby Park offer similar opportunities. However, rehabbing isn’t without its challenges. Unexpected issues can pop up, potentially leading to budget overruns. Plus, managing contractors and ensuring quality work can be tricky for someone just starting out.

New Construction: The Modern Approach

On the flip side, new construction offers a different set of advantages:

1. Customization Building from the ground up means complete control over design and layout, ensuring the property meets current market demands.

2. Fewer Surprises : With new construction, there’s less risk of hidden issues like outdated wiring or structural problems that come with older homes.

3. Potentially Higher Profits : New homes can often command higher prices, especially if built in desirable locations.

In Charlotte, new construction is booming in areas like South End and Ballantyne, while Louisville has growing interest in neighborhoods like Norton Commons. But, new construction also has its own set of hurdles. It typically requires more capital, and the timeline to completion can be much longer. Zoning laws, permits, and construction delays can also complicate things.

Seeking Your Advice

So, I’m turning to the BiggerPockets community for guidance. If you were in my shoes with $50,000 to invest today, and focusing on Charlotte, NC, or Louisville, KY, how would you proceed? Would you opt to rehab a multi-family property, leveraging the lower costs and quicker turnaround? Or would you go for new construction, aiming for higher customization and potentially greater profits?

- What are the key factors you’d consider in making this decision?

- Have any of you successfully navigated both strategies, and if so, what lessons did you learn?

- Are there specific market conditions or trends in 2024 in Charlotte or Louisville that might influence your choice?

I’m eager to hear your experiences and insights as I embark on this exciting journey. Your wisdom could help shape the path of a new investor looking to make a smart, informed decision.

Thanks in advance for your valuable input!

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I hope this blog post sparks some great discussions and provides me, and hopefully others in similar situations, with the clarity we need to make the best investment decisions. Looking forward to hearing from you all!

 no 50k for a new build is not enough. from someone who has been talking to capital partners for a year and breaking ground on 7 new builds within 60 days as well as talking to 8 hard money lenders at a time, 50k won't cut it 

Appreciate it the input ! 

Quote from @Nathan Gesner:

You can't buy much with $50,000 and I really hope you understand the importance of keeping some of that in reserve. You don't want to spend every dime on your investment because there are always unforeseen costs during the first couple of years (bad renters, vacancies, a major repair, etc.)

Appreciate that! Currently transitioning my focus to finding an affordable buildable lot to purchase outright then going the Private Money lender route for our first build. The strategy here is a BRRR 2.0 in the sense that we will not be keeping the duplex but selling for profit as mentioned earlier in the thread to start building more capital for long term holds in the future.

Quote from @Jonathan Baird:

To build in Norton’s Commons at this point, I would guess you’re looking at around 1.5 - 2 million. That wouldn’t be my suggestion for a new investor’s first project. 

If I was you I would contact Rob Bergeron here on BP and look for existing multi family units that are on the market. Gain some experience renovating an existing unit, develop some capital, increase your knowledge of the market in Louisville, and give yourself the time necessary to locate a good location to build. 

 Appreciate that feedback and also the recommendation ! 

Quote from @Kyle Spearin:

@Colby Boone it sounds like you've put a lot of research into this!

Would you ever consider doing a house hack? It's the best way to test what you like and don't like in a low risk environment.

Once you've done this, you'll probably have even more saved up and experience to make you more confident in choosing a direction.

If you decide to just dive into one of these markets and strategies, I'd recommend focusing on your personality, goals (cash flow first or something else) and how much time you have.

I appreciate it thank you for commenting! Yea when we move back we’ll be in a luxury apart setting for the time being which the wife loves & proximity to everything however in doing so the property would be vacant until we have a tenant. I think what we’ll do is build one first ( 9-12 months ) , found a hard money lender with over 273 reviews on here really great , get them to fund the construction , buy the lot for cash in one of the surrounding counties , hire the GC and depending on the market or appreciation either

1.) Sell it entirely  , pay-off loan build our capital 
2.) Sell one side keep one side rent it out 
3.) Can I Cash-Out Refinance on a duplex I used a hard money construction loan on? I guess that’s another mortgage right?

So many questions here 😅

Hey everyone!

I’ve recently saved up $50,000 and I’m super excited to jumpstart my real estate investing journey. I’m looking at two specific markets—Charlotte, NC, and Louisville, KY—but now I’m at a bit of a crossroads and could use some advice from this awesome community: should I use this money to rehab a multi-family property or go for new construction? My goal is to sell for a profit either way, but I’m not sure which path to take.

Rehab: The Tried-and-True Path

Rehabbing multi-family properties has been a staple strategy for a lot of investors. Here’s why it’s got me interested:

1. Lower Initial Costs : Buying a fixer-upper can be more affordable than starting from scratch. With $50,000, I could cover the down payment and some renovation costs.

2. Faster Turnaround : Depending on how much work needs to be done, the project could be finished quickly, allowing for a faster return on investment.

3. Established Market : There’s usually a steady demand for renovated properties in established neighborhoods.

Both Charlotte and Louisville have neighborhoods ripe for this type of investment. In Charlotte, areas like NoDa and Plaza Midwood have older properties with potential. In Louisville, neighborhoods like Germantown and Shelby Park offer similar opportunities. However, rehabbing isn’t without its challenges. Unexpected issues can pop up, potentially leading to budget overruns. Plus, managing contractors and ensuring quality work can be tricky for someone just starting out.

New Construction: The Modern Approach

On the flip side, new construction offers a different set of advantages:

1. Customization Building from the ground up means complete control over design and layout, ensuring the property meets current market demands.

2. Fewer Surprises : With new construction, there’s less risk of hidden issues like outdated wiring or structural problems that come with older homes.

3. Potentially Higher Profits : New homes can often command higher prices, especially if built in desirable locations.

In Charlotte, new construction is booming in areas like South End and Ballantyne, while Louisville has growing interest in neighborhoods like Norton Commons. But, new construction also has its own set of hurdles. It typically requires more capital, and the timeline to completion can be much longer. Zoning laws, permits, and construction delays can also complicate things.

Seeking Your Advice

So, I’m turning to the BiggerPockets community for guidance. If you were in my shoes with $50,000 to invest today, and focusing on Charlotte, NC, or Louisville, KY, how would you proceed? Would you opt to rehab a multi-family property, leveraging the lower costs and quicker turnaround? Or would you go for new construction, aiming for higher customization and potentially greater profits?

- What are the key factors you’d consider in making this decision?

- Have any of you successfully navigated both strategies, and if so, what lessons did you learn?

- Are there specific market conditions or trends in 2024 in Charlotte or Louisville that might influence your choice?

I’m eager to hear your experiences and insights as I embark on this exciting journey. Your wisdom could help shape the path of a new investor looking to make a smart, informed decision.

Thanks in advance for your valuable input!

-----

I hope this blog post sparks some great discussions and provides me, and hopefully others in similar situations, with the clarity we need to make the best investment decisions. Looking forward to hearing from you all!