All Forum Posts by: Trevor Fleck

Thanks so much for the kind comment @Don M.. Can't wait to see where you end up once you have your new build under your belt. 

Investment Info:

New Construction - Single Family Residential 

Purchase price: $238,000
Cash invested: $23,800

I worked with Rent to Retirement (RTR) to identify a builder, purchase a lot, and construct a 4 bed/2 bath, 1,536 sq ft SFR home in Cape Coral, FL. I purchased the canal lot in NW Cape Coral in February of 2021 for $11,500 and the actual construction cost was $226,500 at the time. My construction contract was signed April 1, 2021. Certificate of Occupancy was received 14 1/2 months later around June 15th. I listed the property and have it under contract for $377,500. 

What made you interested in investing in this type of deal?

The combination of cash flow (if I chose to rent), high likelihood of appreciation, and instant equity since RTR was able to use their client volume to negotiate construction costs far below what an individual investor could find on the market. I also liked the idea of virtually no maintenance and a higher likelihood of attracting a good tenant. 

How did you find this deal and how did you negotiate it?

Through Rent to Retirement's team

How did you finance this deal?

Private Loan with 10% down

How did you add value to the deal?

By leveraging RTR's network and financing the construction costs for the builder, I was able to construct for well below market build costs and walk away with over 6 figures in equity. 

What was the outcome?

I had an enviable choice of renting at roughly $2,600/month (I had initially expected $1,800 when construction started over a year ago) or sell and walk away with over $100k. I took the cash and grossed nearly $140k that I'll 1031 into more RTR opportunities!

Lessons learned? Challenges?

New construction can be challenging - especially given supply chain issues, materials price volatility, labor shortages, and local/state government permitting delays caused by COVID 19. The rewards are absolutely worth it, but investors looking at new construction should know there will be delays these days no matter where they invest.

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

As always, Zach Lemaster and the team at RTR provided an incredible investment opportunity along with ongoing support and strategic planning. I'm light years ahead of where I would be otherwise in my real estate financial independence journey thanks to them. My realtor, Peter Davis with John R Wood properties has also been a joy to work with. I highly recommend!

@Branden Yang is that a question for me? If yes, I financed the construction (i.e., a downpayment and a construction loan on the rest). 

@Chad Kinsley I'm happy to report my first build with Rent to Retirement (RTR) is under contract for $377.5k as @Zach Lemaster mentioned in his post. The permitting process does take a good bit of time and many elements are out of the hands of the builder. Below is a more comprehensive listing of all the items that go on behind the scenes when a builder references the "permitting process." As you'll see, it's quite a bit more complex than most investors appreciate. It's a long road and patience is key, but a 300% ROI in a little over a year is worth it in my opinion!

With the builders I've worked with in Cape Coral through RTR, I was provided a builder POC and instructions on how to monitor progress - usually through software like BuilderTrend. The expectation and process was to work with the builder who has direct knowledge on an investor's particular build. In my experience, RTR responded immediately anytime I had questions the builder couldn't answer or that were more strategic in nature. For example, when my first build neared completion, I had a great conversation with RTR to discuss my rental options vs. selling and undertaking a 1031 exchange into multiple RTR investment opportunities. However, the first step was always to follow the process clearly laid out and contact the builder's POC. It's key to proactively reach out to the builders and stay in communication with them. 

@Joey Willardson great questions. I've seen both appraisal valuation and market sales reflect a roughly $20-$25k premium for fresh water lots vs. dry lots. In terms of cash flow, I've been told you may get at most $25/month more for a freshwater lot, but you won't see much on the rental side. So a dry lot will cost you around $5k less to purchase vs. the freshwater lot across the street and you'll save $5k in slope grading that builders charge for a canal lot. In the end, my advice would be to think about your holding strategy. If you plan to refinance or sell in 3-7 years, then perhaps paying the extra money knowing you'll get more than that on the backend would make sense. If you plan to buy and hold for 30+ years, then it might not make as much sense. 

Feel free to message me if you have any other questions you'd like to talk through. Good luck!

@Lucas Gonzalez I've had a great experience with Rent to Retirement personally. I've invested in eight different deals and counting. If you're looking for a good combination of likely appreciation and cash flow, they have really strong teams in Kansas City, Indianapolis, and a couple areas of Ohio. If you're looking into new construction (build to rent or build to sell), I've done very well in Cape Coral, FL with them. Happy to chat more if you'd like. Good luck!

@Adrian Diaz thanks for your post. Obviously you're on BiggerPockets so most of us are big fans of real estate investments. With the current rate of inflation and the extremely low interest rates offered by banks, you're actually losing money the longer you keep it there. Think about how much exposure you already have to stocks and your investment goals. Diversifying into real estate - especially as a hedge against inflation - is a very viable strategy. 

What's stopping you from buying a property now? Lack of education? Fear? Adequate funds for a downpayment? 

@David Luna I've got 7 going with R2R in Cape Coral and have done a total of 8 deals with them overall. I'd be happy to chat about how these are going. Feel free to reach out to me. 

@Adam Wells I'd really recommend Rent to Retirement. I've done 7 deals through them and counting. I also have a number of friends/colleagues who have had great experiences with them. I'd be happy to chat about my experience if it would be helpful. 

@Danushka Abeyasekera Rent to Retirement can connect you with their contractors. I’d reach out to them to schedule a call.