I have a big chunk of cash saved that I need to put to use, but I'm having trouble determining the value of a new build vs a more traditional deal just buying a rental and rehabbing.I've been presented with an opportunity from a builder to build a new duplex in an area which can be used as short-term or long-term rentals in Knoxville, TN.The builder is a rare combination of fast, cheap, AND quality, and has written a "cost-not-to-exceed" clause into the building, so it's an extremely competitive build cost (details below).The deal would cash flow very nicely, but it would force me to leave a chunk of cash into the property.Here are the numbers:duplex: each unit 2:2, 900 sq ftTotal cost of land, 1.2 acres (This is already leveled, excavated, and prepped for building): $80kMaximum build cost: $252kTotal cost: $332kCash in: $67,000ARV: $350kApprox cash flow: $800-1,100So, again, how does this compare to a typical buy/rehab?

You have a $400,000 house in Tampa that rents for $3,000 a month …3,000 / 400,000 = .75% a month in gross rentsYou have a $900,000 in St John’s County, Jacksonville that rents for $5,500 a month …5,500 / 900,000 = .61% in gross rents.Notice that the higher price point you get..the lower the rent / price ratio…making farther away from a 1%+ dealLet’s assume that in this market taxes and insurance combined is 2% of purchase price per year

its when a group of investors come together and combined capital to purchase real property. lmeinvestments.com

The last 36 month frenzy of quick and drastic appreciation combined with historically low interest rates often jades people into forgetting that RE is a long term gain, and time in the market typically reaps more rewards than timing the market.

In this case I would strongly recommend using a combination of an LLC and a Land Trust to avoid triggering the due on sale clause.

Normal market seasonality combined with higher mortgage rates and continued inflation suggest that lower mortgage demand and sales volume will continue well in 2023.

Proper insurance can get you a quote for the property + the boat rentals combined! 

Probably these days, but maybe always, cash flow can be a function of how much money you can put in the deal. 

On the other hand, NOI and Cap Rate become extremely important because that determines value and to a large extent, the size of the loan you can get.The only point where this becomes a gray area is if you were to combine multiple contiguous properties and run them as an apartment. 

My parents had rentals when I was a teenager.A combination of talking to my mom, interest rates and life made me buy my first purpose bought rental.