I recently built a home on a Lake in Tennessee. I got a good deal on the lot and the house was built at cost (as far as I know). I was amazed when I refinanced the construction loan to a mortgage that I had made 50,000 dollars. Count in the down payment and I have 93000 in equity. Thanks bubble ? When I redid the loan I opened a 30,000 equity line of which 15,000 went to pay the last construction bill. Ok enough background. Needless to say this caught my attention and sparked the desire I already had to invest. My goal is to buy underpriced rentals at least one a year. I have been researching but have a lot to learn. I will reread Wealth Building One House at a Time and continue to look for empty houses but would anybody be willing to give me some tips, or to put it another way- what would the experienced REI do in my situation. Thanks
That’s how we caught the bug, now we have 8 townhomes under construction. I would offer the following:
keep up on the invoices, bids, and how they compare to your initial cost breakdown. I have gotten caught in rising materials cost and its costing me an extra 5k or so on each unit.
If your’re not already, manage the draws and payments yourself. This will keep your builder and subs on their toes.
Never co-mingle funds. It tough enough to keep a good running cost breakdown without mixing two or more units together.
Figure at least 6 months interest reserve and a full realestate comisson when you sell. If you don’t need either, then its a bonus.
Just curious, what part of Tennessee did you build? I’m from KY, but have family all over the south.
Good luck with your investments!
Thanks for the tips. I am in the Knoxville area (20 minutes away) and the house is on Norris Lake near I-75. My brother in law is a general contractor and built the house for us. I would consider building more but this was a favor to us- he offered to build both his sisters a house at his cost. He subs abpot everything out and manages the job. I may talk to him about building some to sell, or rent. Mike