My wife (26) and I (27) are wrapping up renovations on our first investment with plans to sell come spring or refinance to hold it as a rental. We would like our next purchase to be a small multi-family property that we can house hack. We live in Columbia, MO which is home to 3 colleges and 2 large hospital networks (large compared to the rest of Missouri, outside of Kansas City/St. Louis). In Columbia, finding a small multi-family property that makes sense numbers-wise can be difficult, but not impossible (low supply). Due to this, we have been investigating the possibility of purchasing land and using an owner-occupied construction loan to build a new property. I have a friend who works for a well-renowned construction company in our town who has offered to be our general contractor at a discount (only charging us 8% vs. the standard 15%) and "teach me the ropes"/make the right introductions so that I can repeat this on my own in the future.
Is building a new property for a house hack potentially a good idea if our goal is to continue to scale/grow our capital or should we just stick to looking at existing properties that need work and pull our money out post-renovation?
With new builds are you typically able to refinance and pull money out after construction is finished and tenants are placed or will our investment funds be locked up in the property for a few years until prices naturally appreciate?
Is it worth it to potentially take a slightly smaller return on this one deal to gain the knowledge/introductions for me to repeat this process in the future acting as my own GC?
Any advice from others who have done something similar?
Are there any major red flags that I need to consider with this strategy?
