Starting from the ground up--literally--

Rehabbing, Fix and Flip, Rental Properties
1

Hello all,

I am looking for opinions of what people think about buying an empty lot and building the property on it. (preferably an apartment complex) Has anyone had negative or positive experiences doing so?

Thanks in advance.

Ryan

2

Development can be very lucrative, getting financing set up is a chore!

What to design, the size, amenities, unit mix, class of property (A,B,C), unit finishes, etc.

To know if it could be good figure you will pay $75 a square foot plus land cost (number of units divided into land cost) plus your plans, permits, tap fees, fire / life / safety, onsite & offsite work, utilities, etc.

Unless you plan something right, you probable would be better investing in existing properties.

3

I haven’t seen a new construction yet that will cash flow properly. Show me the money! (the numbers)

Mike

4

I’m with Mike on this one. Existing properties provide much better value and return. Even if it is new it doesn’t mean you will get significantly more rent which generates the cashflow.

5

I appreciate the honesty from the replies. I am unsure as to why cashflow does not work with building straight from the land. Is vacancy the large issue?

To keep things simple, it seems if you buy the land at the right cost, incorporate fees, and add the construction cost, as long as rent is higher than your monthly bill you should see a cash flow.

Thanks in advance.

Ryan