All Forum Posts by: Lesley Resnick

I will outline all the steps and processes to construct a build-for-rent home.  It is not for the faint of heart.  

I own four lots in Jacksonville and will be constructing 4 identical houses. The houses are 3/2 with a garage, 1293 sq ft heated, and cooled, total square footage 1292.

My goal is to have the house rented and completed by May 1.

Not an economist, did not stay in a Holiday Inn last night.

I do a have data point that is not published anywhere.  My civil engineer, he works out of Jacksonville, FL, has remained busy.  There has been no slow down in his work load.  He currently has 4 backlogged projects with over a 100 new single family homes.  This is significant since projects of that size take between 1-2 years to start building and continue to cost money with no immediate return.  Builders are still investing in projects that will kick off in 2023-2024.

The word CRASH is tossed around.  I don't think that is the case.  Are we moving to a more normalized pattern, yes!.  Is that a decrease from the price growth and frenzy we have seen, YES!

Collectively, we are at a disadvantage to know what is really happening.  We know after the fact.  The government wants to paint a rosy picture so elected officials win re-election.  Case in point, can someone identity anything that is up only 9% annualized?  Food? Fuel? Rent? Building Materials?  Those number are meaningless.  The media, just wants eye balls on their content, regardless of its validity or relevance. crisis and mayhem attracts a crowd.

I am voting for gridlock 2024.  Please stop helping me, I can not afford it.

Taxes are going to go up.  It could be a surcharge on air or changing something in the tax code.  Someone has to pay off the visa card we have been living off for the past year and half.  All we can hope for, is it to land somewhere else.

THE BRRR went great. Got all the money out. Three years ago was a lifetime ago.

All banks are really challenging.  You can give me a call and I can tell you my good, bad and UGLY.

The thing about Bitcoin I don't understand is the level of fervor people exhibit.  They are so sure they are right there can be no discussion.  Their mind is made up, there can be no further review.  If it moves 5x in either direction, that just proves their premise.  I am open to all possibilities and opportunities, but I measure risk carefully in everything I invest in.  Bitcoin is still speculation and is not a good  currency due to its volatility.  No one can see the future, there is no certainty and further, how do you know we are going to be better off in this brave new world?  

Should monetary and fiscal policy even exist?  In the post bitcoin world it is a free for all.  I trust the wisdom of crowds even less than our government.  

While I have no great love for our government or its systems and abuse, I can not begin to imagine how my standard of living or happiness will improve because of Bitcoin. Perhaps If you are a successful bitcoin trader, then sure. give it another year before deciding if you are a successfully trading bitcoin.  We, the US and by extension its citizens have an unfair advantage on the world stage as the leading economy and military power.  We collectively do not want to level the playing field, we will be worse off.    

Digital current and block chain are a fact and will become a greater part of our daily lives, but like it or not it will be owned and run by governments and central banks.  China has outlawed Bitcoin in-favor of their own digital current, if the US and the EU follow suit, Bitcoin will face real challenges and be relegated to criminal activity.  

Congratulations on your new endeavor.

There is money to be made as a contractor.  

However, it is a difficult if not impossible field.  You must be able to embrace chaos.  It will be like that every day if you are successful.  The business is not about what you think it is.  You will see as you really dig in.  You will be held accountable for situations that are beyond your control and frankly you never could have known about.  On the upside, there is more work than you can get to.  

Just to name a few challenges:

  1.  Labor / Subs  Will they show up?  What will they do while they are onsite, work, smoke, talk on the phone?

2.  Supply availability and cost 

3.  Pricing.  If you discover something that is not part of your scope of work, will you eat the cost?  Will the customer pay the difference?  

4.  Getting ripped off.  Materials being taken from job site, subs not showing or doing a good job, customers refusing to pay.

I am not disouraging you from doing this, just offering a few thoughts to keep in miind as you start your journey.

The economics of new construction generally work.  It does not require a VB scripted XLS pivot table.  That is generally not the issue.

I caution anyone looking at new construction.  It is not for the faint of heart.  It is not easy and requires a lot of time and motivation to make it work.  If you have a full time job, you will likely need to find a builder and contract with them.  Just keep in mind they have more projects than they can complete.  As you would expect, they are going to focus on the most profit and easiest projects first.  There is a material shortage and prices are rising daily.  Most municipalities are overwhelmed and understaffed and will be one of the biggest challenges you will face, zoning, permitting, inspections, etc.

As with many things it is not about what you think it is.

Fix and Flip / renovations are all about not getting ripped off.

New construction is all about the local municipality and time.

My understanding is that HELOC loans are adjustable. Going into a rising rate environment, I would be reluctant to take on anything but a fixed rate, that would carry you through the next cycle, 5-10 years

You should also take a look at the utilities.  There are still some spots in 32208, that are on septic and well.  Larger lots are required for septic.

 Jacksonville is the largest city by land mass.  You can drive for an hour at highways speed and still be in the city.  With that said, I would recommend looking at the beaches, Riverside, Springfield and Murray Hill.  Some of those areas do not cash flow as they did in the past.  You can achieve better results in some of the lesser know areas.