Posted by ScottS on September 11, 2003 at 22:25:45:
Jerry,
I would think it might indicate things worked out very well. A 100 unit rental complex would be sold on the basis of a commercial property and cashflow would have a huge determination of the value.
If I woas you I would try and find out what it cost to build and then watch the sale price and see if that gets you attention.
I’m thinking just the opposite from you.
ScottS
Building your own Rentals - Posted by Nick
Posted by Nick on September 11, 2003 at 16:19:57:
I have come across a lot in a established neighborhood that the owner is almost giving it away. I was thinking about building a house on the lot to either sell or use as a rental. What do you guys think? Have any of you done this? How did it turn out? I have the cash resources to build but have never built before.
Re: Building your own Rentals - Posted by Craig (IL)
Posted by Craig (IL) on September 13, 2003 at 08:51:49:
I have been thinking the same thing. Seems’ several of us are. Makes sense to me, the rent back from the investment makes for very good return. Also, one coue refi when the home is built and rented and get all/most the investment back + a tax advantgage. Building manufactured homes or modular homes would reduce chances for mistakes and get the home up and rented quickly. Would depend on the area, though.
But I am not experinced at this. Would like to here from people with actual experience.
Re: Building your own Rentals - Posted by Scottese
Posted by Scottese on September 12, 2003 at 19:47:18:
I really don’t like the idea of renting a home you built. If you can build it inexpensively, then I would want to cashout and leverage those profits. Having more equity in a property, hence better cashflow, isn’t best case scenario. Say that property would cashflow $500 mo. and you had 25,000k in equity, and the house was 100k FMV. I would buy 4 houses with the 25k and cashflow 250 mo each. My cashflow would double. Be a builder or a REI, but not both. Of course on a large scale this may work better (apt. complexes) but on a house by house basis it doesn’t seem like you would be as highly leveraged as you could be to maximize you profits. Now if you lack exp. your costs may end up being the same as you could just buy a house for. Believe me a few mistakes due to inexperience get costly rather quickly. Just the way I see it, and I do both, but do not mix the two.
Re: Building your own Rentals - Posted by Brandon
Posted by Brandon on September 11, 2003 at 21:06:54:
Nick,
I have been interested in the same thing lately. I had one post about this same subject awnsered about a week ago. From what I can tell, it can be a viable investing technique, especially for the long term, and as long as you are sure that the conditions are right (whether the rental or the purchase market). I would do some studying though at your local city hall to find out what the attitude of your local municipality is towards building. Someplaces are looking for growth, and others try to throw every obstacle they can think of. I would look at those factors, amongst others before I jumped in to try and develop some land. Your area should have aplanning commision. My city’s planning commision posts their minutes on the internet, so I have been going through and seeing what applications are being approved and rejected, and I also got the fee schedules for permits etc. do your homework, and if you do, it apparently can be a good long term strategy. Good Luck.
Re: Building your own Rentals - Posted by Jerry Martin NC
Posted by Jerry Martin NC on September 11, 2003 at 20:42:12:
Nock i had the idea to do that a few years ago but could not get the financing. Another investor got it together and built about 100 units in a develoment. They were rented very soon but latley I have seen a for sale sing at the entrance so it must not have worked out too well.