Hi guys I'd just like to say thanks to BP. Ive been listening to the podcast for a while now and finally came around to making a profile. I'm a listened real estate agent but looking in to investing. I have a parter who was a GC up until 2008 and is now a supervisor for a mid size construction co. Heres my strategy! let me know what y'all think.
I live right beside a really nice high school and would like to buy a parcel of land to develop a small sort of subdivision. Market here is great overall. It would be 5 acres for $50,000 total. My plan is to zone to where I can put each house on 0.25 (1/4) acres. There would be a total of 20 homes This would be a project to project basis building one home at a time.
All homes would be in the same relative layout with about 4 different designs. 3 bed 2 bath, 1,500 square foot, cost us about $100k per home to build. Worth about $130,000. We both work full time so it would take about 8 months per home build. Rents would be from $900-$1,200 plus utilities. These are based on comps
I would ike to know how y'all feel about my strategy. My partner would prefer to build each home one buy one and sell as we go. actually I would say it's about 60-40. He would prefer the chunk of change but also doesn't hate the idea of the cashflow. plus we are in a developing community and I don't want to play the appreciation game but the cost of the homes should definitely go up over time
My only concern is taking on so much debt. I filed for bankruptcy (job loss) before and have been scared of taking on so much debt even with the leverage ever since. We should have about $30,000 equity per home after each build and rent to qualified tenants but its still a little worrisome to think of having 20 homes lol
It seems like a great idea to me since all the properties will be together so property management would be a lot easier verses 20 homes in 20 different areas. Anyways please let me know sorry to rant
