All Forum Posts by: Douglas Bennett

@Douglas Bennett yes, it is common for us to purchase properties in foreclosure...or maybe I should say "facing foreclosure".  Some people will go to the courthouse steps to purchase properties at the foreclosure auction but most of us try to buy before they get to that point.  Are tenants still there?  They could be?  What about the homeowners?  Yup.  Will the HVAC work?  Sometimes.  How do you even know if it's a good deal?  And that's what we are all trying to figure out.  Lots of different strategies out there and you can learn lots of things here and there's even real estate investor groups that meet in person too. You can search for those to learn from other locals what they are doing in your market.  It's a great time to be getting started!

It's great to hear that you've gained valuable insights through your experience with purchasing a property through foreclosure, and it's commendable that you're sharing your newfound knowledge.

BiggerPockets also played a significant role in providing me with essential real estate investing information. If you have further questions or if there's anything specific you'd like to share about your journey, I 

Hi @Douglas Bennett. Welcome 

Welcome to BP!

You've come to the right place to learn anything and everything about real estate investing.

Be sure to check out the "education" tab at the top. Lots of great resources there.

A good place to start is with the free guides, such as "The Ultimate Beginner's Guide To Real Estate Investing".

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Good luck and happy investing!

As far as building a fourplex goes, it is expensive and probably more than you think it is. Building in general is considerably more expensive than it was just a couple of years ago. Construction costs are up around 25% across the board. For example, I used to be able to build a single family at about $100/sqft at cost. It is now at about $145/sqft at cost for a typical house. That cost will go up for nicer homes. And it will be a good bit higher for a multifamily as you have multiple high-ticket items, i.e. kitchens, bathrooms, HVAC systems, water heaters, etc. I have not priced building a multifamily in recent years but I would imagine that the cost would run about $165/sqft or more at cost, especially with a fourplex as you have 4 of all those high-ticket items and I believe a fire suppression system is required on new fourplexes which can easily be 60k or more. 

Keep in mind that those numbers are at cost. Add a minimum of 20% on top of those numbers to hire a contractor. So if you can build a fourplex at $165/sqft at cost it would be more like $198/sqft. Let's say you build a fourplex with 4000 sqft, 1000sqft per unit, you are looking at about $660,000 to build and that doesn't include the cost of the land. Those numbers just don't work. You would be better off buying an existing fourplex and updating it to maximize the rent.

I definitely thank you for bringing these to my attention and helping me learn.  Suppression systems.  I’ll definitely be more aware of things like this. 

 Housing inventory is on the low side right now so I am not surprised there isn't too much being presented to you at the moment. Building is definitely one route you can go and many have had a lot of success with this strategy. In my personal opinion, one of the biggest reasons I prefer buying pre-owned rather than building (in addition to cost difference) is that with a pre-owned home; I can place a tenant and begin collecting rent the day of closing rather than needing to wait for a period of months while the house is being built. Since mortgage would still be due each month during construction; I wasn't a fan of seeing no revenue coming in each month while expenses where still accruing. 

Welcome to BIggerPockets Douglas!

@Douglas Bennett

I am also in the Louisiana market with properties in both Lafayette and New Orleans; included 2 4-plexes. I've been very happy with my 4-plex properties and this is a great way to go. But it might be easier to start with an existing property at first instead of constructing a new one. Pre-built units are going to be more affordable and have a higher return on your investment as a result. New builds might be able to bring in a bit more in rental income but it is often not enough to offset the higher price you would buy for a new property, especially in the current high interest rate environment. First step I would suggest is identify exactly what area you went to build in. When I first started, I invested in the city I was living since I was more familiar with the area and knew where the good vs bad  neighborhoods were; this is a big advantage. I was also able to self manage, which gave me insight into the requirements of managing a property and made it easier to manage the property manager once they took over. Even with a new build, there will still be some active management needed whether things breaking or the tenant not knowing how to make minor repairs. Real estate is a great form of wealth building but it is not completely passive, there will be some work required. You are welcome to reach out if you have any questions or need some referrals for this market. 

Hello everyone I envision y’all are well. I’m new to BP and investing and would love some advice!

Currently in Houston establishing a group of Military veterans, (as I’m a combat Vet myself) to purchase fix and holds to rent via Multi Family, Apartments, large commercial deals. I’ve been an operator at several concepts and have a successful track record of running profitable start-ups, short-term rentals (2 myself) which is why I am avoiding house-hacking as the entry point. 

I have attended several real estate workshops with ‘gurus’ that came with a $20-60k price tag, and Lifetime Unlimited (per suggestion from someone here on BP). Yesterday I went to the Foreclosure Auction at the courthouse, and realized I desire to partner with the right mentor ASAP (to avoid reinventing the wheel). 

My questions, when looking for a real estate investment mentor what route did y’all take (I’ve got none in my network, reached out to several on BP whom aren’t mentoring), creating a long term game plan, finding your team and narrowing down to the experts in this field; particular hard money investors, Investor friendly Brokers, agents, CPA, attorney, etc (I’ve reached out to several on here). 

Thanks in advance for taking the time any advice is appreciated and welcomed. Sonia