I have a few lots in New Orleans and am looking to run  profitability analysis of sfr 3/2 development v. one zoned as duplex.  

For example, if the property you are buying is a development property, like a small house with a large lot in a developing area, then a small negative cash flow could be okay if you can carry it.

The first indication is you spent $290k for $1800 cash flow or a 0.62% monthly ratio.Rent $1800 - PITIH $1480 - $180 (pm) - $90 (vacancy at 5% which is lowest i ever allocate in my underwriting and likely low per the OP description of a lot of new development) = $50 for all other expenses.Maintenance/cap ex on 4/2, 2100’ will exceed $300/month even in cheap labor markets on sustaining basis.  

The primary goal is appreciation adding value building equity and therefore net worth.I’ve been at this “game” 46 years  and there is no magic bullet.It takes time, discipline and consistent effort.But it can be done in 10 years.Of course this means living below one’s means - ie spend less than they make - to develop and build cash and capital that can be invested and then watch ot grow over time.Hope this helps.Arn

This reduces exit options and affects the value. 10) Small number of small units is the most expensive residential development there is.

You know that the best investor-clients, we develop a partnership with and camaraderie over knowledge and a will to work in their best interests.

At a minimum, having viable plans in place for development will make these lots more marketable and valuable to potential builders when we have conversations. 

It’s a business oriented mentorship but the man I was paired with was well versed in all aspects of real estate investing and development.

There are some major developments continuing construction, however; the price points are upwards at $290,000 or higher and rent rates being advertised at $2,000 a month.

Our primary objective as coaches is to help clients ask the right questions, develop the right criteria, and identify potential red flags.