All Forum Posts by: Brock Holliman

Investment Info:

Single-family residence other investment.

Purchase price: $22,500
Cash invested: $128,000
Sale price: $195,000

New construction, 4/2 - 1600 Sq ft - Concrete block construction. This is a brand new, build for rent recently sold to an investor. Like all of our new builds, this one was built with both the investor and the tenant's' interests. Very trendy with a warm modern stye, all tile floors throughout entire house, solid wood cabinets with soft close, quartz countertops, stainless steel appliances, walk in shower with rain head fixture, double vanity master bath, walk in closet.

Investment Info:

Single-family residence other investment.

Purchase price: $22,500
Cash invested: $128,000
Sale price: $195,000

New construction, 4/2 - 1600 Sq ft - Concrete block construction. This is a brand new, build for rent recently sold to an investor. Like all of our new builds, this one was built with both the investor and the tenant's' interests. Very trendy with a warm modern stye, all tile floors throughout entire house, solid wood cabinets with soft close, quartz countertops, stainless steel appliances, walk in shower with rain head fixture, double vanity master bath, walk in closet. All of these features help the tenant find a better home with more upgrades along with providing the investor with a quality home built to last and sure to perform much better with low maintenance and turn costs.

Investment Info:

Single-family residence other investment.

Purchase price: $22,500
Cash invested: $128,000
Sale price: $195,000

New construction, 4/2 - 1600 Sq ft - Concrete block construction. This is a brand new, build for rent recently sold to an investor. Like all of our new builds, this one was built with both the investor and the tenant's' interests. Very trendy with a warm modern stye, all tile floors throughout entire house, solid wood cabinets with soft close, quartz countertops, stainless steel appliances, walk in shower, double vanity master bath, walk in closet.

How did you add value to the deal?

When building from scratch, you are almost always going to add value to the deal (as long as the lot & build costs comply with the average sales price psf).

Lessons learned? Challenges?

Since this was my first go around with new construction in Florida, there were a lot of learning curves (as to be expected). The main problems faced had to do with terrible contractors on only a few key issues which in turn put us over budget in those categories only. But we still managed to come in ahead of schedule with only a 7 week build time from start to finish and ready for close!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, although I am licensed myself, my principal broker (one of the best agents I have worked with & now a great friend as well) Jean Gillen helped to make this a smooth transaction by bringing an investor buyer to the table pre construction. She is a true professional when it comes to working with investors in the Central Florida market.

Investment Info:

Single-family residence other investment.

Purchase price: $22,500
Cash invested: $128,000
Sale price: $195,000

New construction, 4/2 - 1600 Sq ft - Concrete block construction. This is a brand new, build for rent recently sold to an investor. Like all of our new builds, this one was built with both the investor and the tenant's' interests. Very trendy with a warm modern stye, all tile floors throughout entire house, solid wood cabinets with soft close, quartz countertops, stainless steel appliances, walk in shower with rain head fixture, double vanity master bath, walk in closet. All of these features help the tenant find a better home with more upgrades along with providing the investor with a quality home built to last and sure to perform much better with low maintenance and turn costs.

How did you add value to the deal?

When building from scratch, you are almost always going to add value to the deal (as long as the lot & build costs comply with the average sales price psf).

Lessons learned? Challenges?

Since this was my first go around with new construction in Florida, there were a lot of learning curves (as to be expected). The main problems faced had to do with terrible contractors on only a few key issues which in turn put us over budget in those categories only. But we still managed to come in ahead of schedule with only a 7 week build time from start to finish and ready for close!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, although I am licensed myself, my principal broker (one of the best agents I have worked with & now a great friend as well) Jean Gillen helped to make this a smooth transaction by bringing an investor buyer to the table pre construction. She is a true professional when it comes to working with investors in the Central Florida market.

I have been building new homes for investors over the last four years. I find this a much smoother experience than building retail. The only problem is that I currently have too many buyers (yes I know that’s a good thing) and not enough capital to build enough homes to meet the demand for my investors.

All of my buyers put down $7,500 deposit with contracts. I am averaging 8 weeks on turnaround time from contract to close. We have enough buyers that want to take down 50 per month. We just need the capital to build more than we are doing now (averaging 5 per month).

Any advice on who I should talk to about private financing?

All replies are greatly appreciated!

Hey Matthew, 

Please see below for a brief breakdown of the fees along with a response to your other questions.

Property Expenses	Monthly	Annually
Management Fees	$128	$1,536
Property Taxes	$208.33	$2,500
Insurance	$50	$600
Repairs/Maintenance	$48	$576
HOA Fees	$21	$252
Vacancy Losses	$48	$576

Operating Expenses

$503.33

$6,040

• The mortgage would be in the name of both the investor and the builder with the investor being the guarantor.  
• The deed would be in the name of "Investor" 85%, "Builder" 15%
• Partnership agreement would be pretty basic.  But here are some key points that I would like to add:
  • The builder will handle dealing with the property manager
  • Builder will verify tenant screenings 
  • Builder will choose all paint and finish choices on property (Because I have a vested interest in the property, I would like to go with my proven strategy on colors and finish selections.  I am very experienced on picking finishes that attract higher rental prices, longer term leases, that result in higher returns.)
  • Investor can buy out Builder's 15% share for 15% of reasonable market value, minus any anticipated closing costs and sales expenses (realtor fees, attorney fees, etc.) after 10 years

I have been building new single family homes for investors. I wanted to find a way that I could boost my investors returns but still keep it attractive for my construction business to make a profit.

So my idea in summary is:

1. Builder finds lot for investor for 25k (I currently own 20 and have access to 350 more)
2. Investor buys lot, secures financing, and hires the builder to build the house on the investor’s lot for $170k.
3. When the construction loan has been paid off and the certificate of occupancy has been issued, builder then pays $29,250 (75% of Investor’s down payment) to investor for 15% stake in the property. This leaves the investor with only $12k invested after closing costs.
4. Builder and investor enter partnership, rent property for $1600, covering expenses and also putting money in their pockets each month.

End result: Investor owns brand new $210k appreciating investment property that cash flows over $200/month for $12,250

See below for examples on deals.

Example 1 - A traditional investment property sale on a new construction

• Retail Value: $210k
• Sales price: $195k
• Loan Amount: $156k
• Down Payment: $39k
• Closing Costs: $2.5k
• Total Cash Invested: $41.5k
• Rental Rate: $1600/mo
• Operating Expenses: $503/mo
• Mortgage Payment: $857/mo
• Cash Flow: $240/mo
• Cap Rate: 6.75%
• Cash on cash return: 6.94%

Example 2 - Okay now this is how the numbers look for the investor in my Partnership Program

• Retail Value: $210k
• Sales price: $195k
• Loan Amount: $156k
• Down Payment: $9,750 ($29,250 was paid by the builder after closing for a 15% stake in the home)
• Closing Costs: $2.5k
• Total Cash Invested: $12,250
• Rental Rate: $1600/mo
• Operating Expenses: $503/mo
• Mortgage Payment: $857/mo
• Cash Flow: $240/mo
• Investor’s 85% Share: $204/mo
• Cap Rate: 6.75%
• Cash on cash return: 20%

Any readers - please let me know your thoughts on this idea.

Attention all readers:  Could you please give me your thoughts/feedback on the following idea?

I have been building new single family homes for investors. I wanted to find a way that I could boost my investors returns but still keep it attractive for my construction business to make a profit.  

So my idea in summary is:

1. Builder finds lot for investor for 25k (I currently own 20 and have access to 350 more)
2. Investor buys lot, secures financing, and hires the builder to build the house on the investor’s lot for $170k.
3. When the construction loan has been paid off and the certificate of occupancy has been issued, builder then pays $29,250 (75% of Investor’s down payment) to investor for 15% stake in the property.  This leaves the investor with only $12k invested after closing costs.
4. Builder and investor enter partnership, rent property for $1600, covering expenses and also putting money in their pockets each month.

End result: Investor owns brand new $210k appreciating investment property that cash flows over $200/month for $12,250

See below for examples on deals.

Example 1 - A traditional investment property sale on a new construction

• Retail Value: $210k
• Sales price: $195k
• Loan Amount: $156k
• Down Payment: $39k
• Closing Costs: $2.5k
• Total Cash Invested: $41.5k
• Rental Rate: $1600/mo
• Operating Expenses: $503/mo
• Mortgage Payment: $857/mo
• Cash Flow: $240/mo
• Cap Rate: 6.75%
• Cash on cash return: 6.94%

Example 2 - Okay now this is how the numbers look for the investor in my Partnership Program

• Retail Value: $210k
• Sales price: $195k
• Loan Amount: $156k
• Down Payment: $9,750 ($29,250 was paid by the builder after closing for a 15% stake in the home)
• Closing Costs: $2.5k
• Total Cash Invested: $12,250
• Rental Rate: $1600/mo
• Operating Expenses: $503/mo
• Mortgage Payment: $857/mo
• Cash Flow: $240/mo
• Investor’s 85% Share: $204/mo
• Cap Rate: 6.75%
• Cash on cash return: 20%

Any readers - please let me know your thoughts on this idea.

I have been building new single family investment homes for investors. I wanted to find a way that I could boost my investors returns but still keep it attractive for my construction business to make a profit.

So my idea in summary is:

1. Builder finds lot for investor for 25k

2. Investor buys lot, secures financing, and hires the builder to build the house on the investor’s lot for $170k.

3. When the construction loan has been paid off and the certificate of occupancy has been issued, builder then pays $29,250 (75% of Investor’s down payment) to investor for 15% stake in the property.

4. Builder and investor enter partnership, rent property for $1600, covering expenses and also putting money in their pockets each month.

End result: Investor owns brand new $210k appreciating investment property that cash flows over $200/month for $12,250

See below for examples on deals.

Example 1 - A traditional investment property sale on a new construction

Retail Value: $210k

Sales price: $195k

Loan Amount: $156k

Down Payment: $39k

Closing Costs: $2.5k

Total Cash Invested: $41.5k

Rental Rate: $1600/mo

Operating Expenses: $503/mo

Mortgage Payment: $857/mo

Cash Flow: $240/mo

Cap Rate: 6.75%

Cash on cash return: 6.94%

Example 2 - Okay now this is how the numbers look for the investor in my Partnership Program

Retail Value: $210k

Sales price: $195k

Loan Amount: $156k

Down Payment: $9,750 ($29,250 was paid by the builder after closing for a 15% stake in the home)

Closing Costs: $2.5k

Total Cash Invested: $12,250

Total Property Income:

Rental Rate: $1600/mo

Operating Expenses: $503/mo

Mortgage Payment: $857/mo

Cash Flow: $240/mo

Investor’s 85% Share: $204/mo

Cap Rate: 6.75%

Cash on cash return: 20%

Any readers - please let me know your thoughts on this idea.

@JR Paulemon yes I am. We should definitely connect. I have built for spec, retail, and investors (mostly for investors now). I know all of my markets very well and definitely know the finishes to put in to get higher yields.