People are buying the units before the buildings are constructed. 

I have been looking at some areas in east Atlanta where a house in decent shape is about 250k but surrounding areas have 300s (rehabbed) and 400s (new construction).

I've been infatuated with analyzing rental deals for quite some time, but I figured it was time to throw together an analysis tonight to hopefully gain some insights and constructive feedback from some of the investor gurus out there!

Economic theory would also suggest that it would put downward pressure on the supply of housing because the policy decreases the incentive to construct and maintain units.

I have the short term financing in place from a local hard money lender, but I need the long term money in place before I begin construction as I don't intend to sell the building any time soon.   

We in Phoenix, on the other hand, are greatly benefiting from people running from CA, another great socialist state :)ya not sure if the puzzle factory running this state really understands free market economics  but my Lobbyist I use just sent out an economic report that is very favorable for the state... so it appears that rentals are not a big driver if they can submarine them and the economy is still booming and strong I know its worked in our favor for new construction :) 

Cash for the purchase, construction loan for the rehab.What was the outcome?

I mean when we are done with our new construction homes the buyers always have a home inspector go through and there are always a few items.. that got missed .. you know cellulose in the crawl ( wood chips LOL).. reverse polarity.. chipped tile our folks out are way will even do a sewer scope.. and a radon test.. even though we have to put in radon pipes by code..

I'm trying for constructive feedback here...

For example, if I am the cash partner, I want the guy handling  flips to know what they are doing  and have a construction company behind their back.