As a builder myself, this is basically what I do, build STRs with cash, finance to pull the cash back out, then cashflow from the rent. New homes have such lower expenses and maintenance needs, much easier to manage and higher demand product. Also far easier to find a deal on building lots than to find a good deal on existing homes. The absolute best strategy for gains if you ask me.
I am also a builder and have been doing spec homes and currently building my first subdivision with my Dad. I built 1 rental and I love it. Everything you say is true. Infinite return since I refinanced and pulled all my cash out plus some extra. Only problem is my cashflow is very low. So I realize I need to build and keep like close to 25-30 doors in order to live off that cash flow since they will all be financed. Its the long game with rentals but im happy I can offset that with development and take the big chunk of cash home and reinvest in some rentals.
@@Tkenny35 Cash flow can be low, especially with traditional long term rentals, although STRs in a good area can do much better. In the end, as long as you are pulling all of your cash back out with the financing youre still getting an "infinite return" on that investment no matter what the cash flow is, as long as it stays positive. So if you ask me its still a good investment. As time goes on, your mortgage stays the same (unless you refi) but rents go up, so after a few years they should be cash flowing much better and you wont need so many properties to be financially free. Keep it up, youre on the right track!
@@DGarcia007 Not planning on selling them. I prefer to hold for the cash flow and just refi whenever I need to access equity. No reason to get rid of a good investment. Just gotta keep accumulating them, recycling the money from one to the next.
Great podcast. I just started on my new construction on a commercial property that has an 1898 3 story Victorian in disrepair. My husband and I rehabbed and turned into 2 STR units. The property has an existing workshop in the back we building 2nd story on. Bought most items NEW at a discount building places for 90% less than retail. Wrong sized or slight blemish for multi million dollar homes, still new in package. I design around that. My husband does all the trim, flooring, plumbing, electrical including running the utilities and installing the new meters, I do all the architectural design and have an engineer that does full set of plans for $3k. We have 1 full time worker. I sub out framing, roofing and concrete. Purchased the property 2 yrs ago for $340k, have $60k into existing house, will put $80k into new build. ARV is $2+ million. STR income projected at $350,000 yr, not including commercial activities. It's a lot of work, especially dealing with the city, but the juice is worth the squeeze. All the properties we purchase have additional lots and zoning to add more units. A lot of turn of the century houses that are practically tear downs have multiple lots or R2 zoning around our downtown area. The properties are a giveaway sometimes because they have major foundation issues but they are by far the best bang for the buck if you're willing to do the work. Estate sales are also great because most of the time they don't know what they're selling and just want a quick close.
Around $250,000 was made when I sold my flat in Rochester. That's why I was upset when my standard savings account yielded only $171 in interest. It was suggested to me to buy stocks after I conducted some study. Which stocks would be a good place to start?
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
I advise you to invest in stocks to balance out your real estate, Even the worst recessions offer wonderful buying opportunities in the markets if you're cautious. Volatility can also result in excellent short-term buy and sell opportunities. This is not financial advice, but buy now because cash is definitely not king right now!
indeed the mkt & economy has gone berserk, price of great assets like real estate, dividend paying stocks, or gold never comes down easily, in my humble opinion, buy what you can afford today, and working with a financial advisor certainly helps
I require suggestions on how to restore my portfolio and create more effective strategies in light of the huge declines. Where can I locate this instructor?
REBECCA NASSAR DUNNE is her name. She is regarded as a genius in her area and works for Equity Services inc. She’s quite known in her field, look-her up.
I have watched hundreds of BP podcasts and read 10 books from BP, this is the first time build to rent is mentioned. Given how competitive the market is and how expensive interest rates are, I found out that build to rent is the obvious way to create equity in real estate. I think BP should start offering more content on the build to rent .
Right the number don’t really work especially with interest rates higher. People are sell ing there Approved d projects left and right Prices are down.
I think of this ALL the time. I build 10 homes a year already. A 1900sq ft home on land for 300k that could refi up to 500k. I think the best is to refi at 300 to keep mortgage down with better cashflow. Just gotta pull the trigger.
I scrolled the comments to see if this was already mentioned so I will add a tidbit - as a Mortgage Agent in Canada (Ontario specifically), we are NOT capped at 5 year terms. Lenders WILL offer up to 10 year terms for rates however, the 5 year fixed rate is priced more favourably and is the rate most advertised for. Longer terms are not advertised although they are available. Not 30 years though.
From my personal experience, buying and selling has been waaaay more profitable and with less headaches than dealing with rentals. We had a lot of rentals and the maintenance issues drove us crazy. As opposed to buying a foreclosure or tax property, renovating and flipping for $50k to $100k plus and more. Renovations come with headaches as well but the reward is worth it. We are still selling properties at the top of the market.
Which area are you in? Planned on doing this 10 years ago in Detroit, buying, fixing and renting, refinance and buy another property and keep expanding the portfolio, but now I’m looking back and kicking myself because I did not do it, and would like to start buying a duplex and renovating and flipping now. A lot of the things they talked about in this video resonates with me… how do you get those up front costs, risk of finding the right people, etc.
@@EmilGhiurau There are plenty of areas in Michigan that are still hot. Detroit wouldn’t be on my radar. Bloomfield Hills, Grosse Pointe. Okemos. Buffalo New York, Columbus Ohio, Indianapolis, Minneapolis.. to name a few areas red hot right now. Stop planning and do it, read and watch real estate investment pros and just get going. Stay away from houses with basements and crawl spaces unless you can have it inspected first by a trusted engineer. Some of those houses develop structural issues which can be extremely expensive. As a rule, I don’t buy houses with basements and crawl spaces no matter how sweet the deal.
How are you able to cashflow with such high prices and interest rates. I have thought of doing this but the numbers simply don't work for me. Are you putting 25% down on each property?
The cost of land alone in my area without being surveyed, cleared, and utilities costs around $600,000 to $1,000,000+. Much of the land and area laws do not allow multi-family construction. Say you find a piece of land that enables multi-family. Now, accounting for materials and other building costs, you can buy something built within the past ten years for a better price. Building makes sense in certain parts of the country, but here in my neck of the woods on the East Coast, it's hit or miss. You essentially need to be a big corporation or have multimillions to build multi-family around here.
Agreed 💯 the truth don't know what world they live in but where my rentals are I can barely fined good help for tlc repairs for my rentals can't image building
In less developed areas seeing more rapid new growth (TX) there are rural developments where a developer paves roads and supplies underground power and water to each lot, puts in community amenities, and sells decent acreage within. The land comes at a relative premium of course but a lot more affordable than doing it all yourself. It's great when lakeside or near other interesting destinations.
My first new build was a nightmare because I hired the wrong GC. They messed up the schedule and architecture. It took twice as long to build as expected. Codes took a year to process. The financing was 160k alone. At the end I was able to refinance but could not get back the 500k cash I put out. It is 100% worth the "75k" to have a GC. Gc license is required anyway which requires passing the state exams and paying fees. And having all the sub relationships is needed. After all that I realized I could have purchased an existing new build and been making income for an extra 2 years. Always analyze the development and hold time compared to competing assets such as rehab or buy to rent.
I actually bought a house a few years ago because it had an additional lot with the plan to build on it in the future. I have toyed with the idea and have considered what to put on it, but haven't had the financial ability to do it. I know it would rent well, because the house I bought the lot with has never been empty more than 30 days since I put it on the market.
As a builder I agree but in current conditions most lenders will not let you GC the build yourself if you have no experience. Also Triplex and Fourplex in some areas like Houston they fall under commercial code so the cost is too high that’s why don’t see many new triplex or 4plex in the area.
@17:18 Yes, I always thought my parents were secretly very wealthy and had some land in South Texas that had oil on/in it. For decades, I thought that. It was not true. LOL!
Great job, congratulations. For the past 30 years as a general contractor I have been developing income producing properties in different cities as long as market conditions allow. I operate from Texas. I would like to share some experiences with you.
ok, now we know she does her own design that's huge and is the contractor.. when i hear of real estate ideas being sold .. than you learn the person was raised in real estate or is builder or has good amount of capital to start up and make mistakes.. but it is not revealed in the pitch.. this is common. I like REI but it takes good amount of cash to really start right and knowledge or partner with skill set .. to comfortably get rock'in in ti. there are exception... enjoy the listen
Nice episode! I’ve being wanting to start this type of business since I was in college but, I’m always afraid of the upfront costs. Civil engineer background and a masters in Architecture so in terms of design and construction budget I have a lot of experience. Always thought I needed to have huge amounts of cash to cover these costs. I appreciate she shared her experience and input on this topic. I’m hoping to get started on this type of projects sooner than later.
There are privacy issues involved with filming the inside of rental units. It’s one thing to take pictures of damage, but another all together to film their stuff.
@@sparksmcgee6641 The renters have privacy rights. My wife worked for a property management company for several years. Guess it depends on the state but most have privacy laws for renter. You can take videos of damage done obviously. Walking through without permission and filming then posting it? What if they have pictures of themselves out, and sex toys. Easily associate them with the toys and if they find it open yourself up to a massive lawsuit. Remember, you can sue anyone for any reason.
Great insights. Is there an episode where it focuses on more on the preparation and due diligence? Do I buy land first or do the surveys on a land that is not mine yet? How to finance?
GREAT info! Thank you for sharing this, I love the house hack idea for us newbies as a realistic approach to get into new construction. Really great video 👍👍👍
This is the same idea I am trying to get to work. I am running into issues with getting approved on loans. Basically, the bank wants me to borrow as if I would need to pay a builder to build the home (I plan to build the rental myself with one or two workers but I won’t pay myself). Do you have any suggestions or ideas?
I am doing this same type of build right now. In order to maximize my returns, I am building with cash/equity from other properties and then getting a loan/mortgage upon completion. The mortgage is capped at 80% of the appraised value, but it’s still plenty enough (or pretty darn close) to pay off the cost to build and the land. With my latest one, I had to subdivide the lot I bought to make it profitable for me. I had a lot of money tied up in the land and land prep so a second duplex we essential to earn a profit. The banks, at least as far as I know, will only do a new construction loan if you go to them for money. If you don’t have enough equity, raising private capital might be worth a shot. You can offer decent returns on short term loans.
I built using a HELOC from another property. Credit unions offer cheap ways to create a HELOC although IME not really cheaper rates once you are using them.
Thanks for the interview and insights. I am doing this with the sustainable building material of hempcrete. Happy to share ideas about building with hemp.
Why would building a multifamily structure on vacant land that you own in anyway be “working against” the city? I don’t follow what possible drawback there would be for the city itself. What am I missing?
I am an architect and did the build and househack recently in Bellingham, WA. We designed it to have a large (4 bed 3.5 bath) main home with a 1bed1bath ADU rental. I am hoping that the market values the flexibility of this layout, either a SF with 1 rental, or a multigenerational home (aging parents get their own place). The cashflow while we live here will be nice, but the big payday comes when we sell the home. I'm curious how much more this type of home can sell for over a traditional SFR. My next big leap will be to buy and hold a 4plex rental in Spokane, WA. I can save on the soft cost (being architect and GC), but the challenge will be the upfront capital for land/initial build costs. Hard money seems like a big cost with the high rates, but finding an investor could take a bigger chunk of the profits. Its hard to compare the two without knowing what an investor would take out of the rent/final sale of the home. Are there general ranges that are typical? Thanks in advance for the advice.
Not bad, but Canada is different than the USA. Of her five points that started at 7:30 1) New construction is higher value than old construction. Not the case in here, at least not in all markets. In my market new or old does not matter, only zip code, comps, etc. Debt is great when interest rates are 2%, but above 5% Dave Ramsey is right. Generally. New construction is not passive. And addressing 21:40 no, there is some pretty ugly new houses and there are some very lovely older houses. In fact I really love the homes built before WWII (excluding mill houses) far more than almost everything newly built. - But I do love her energy, confidence and 'move forward' drive. Alot of people can do these things but don't and some that can't but would. Also, despite what I just typed, she does make me want to experiment with new construction. Thank you.
Built my own place like this in 2011. Coulda made a fortune, but decided to live here instead. My place is iconic in the area and I always thought I could do it again for others, but I still go to work instead.
In my view, unless the buyer has the ability to do much of the work, you are always better off with a neglected property. The strategy you have highlighted will put you in the poor house. The munipality, getting the land prepared, all utilities, and given in Canada your amortization period and term will present issues. To be so young, I am jealous, sadly so many experts today❤
Would love to see her books as this is not a slam dunk easy thing as she plays it up. Built several houses and they are an ordeal to say the least and take 6-9 months if you are lucky. Just to get the land you need all the cash or minimum of 60% down to roll into the build. Then getting the engineering and permits are another painfully slow process. Then after all that the 6-9 months starts if it passes the appraisal for the bank with more cash needed most likely. So all in you could have close to 1 year of no income but just cash and time going outflow. Now buying a current dwelling is over in 30 days without the 6-9 months of no income. Just not connecting the dots on this story unless Canada has some slush fund for the masses to do these projects.
It’s very similar to a traditional BRRRR. You only need to put up cash in the beginning to get the project started (or you borrow from a private lender), afterwards the bank refunds in progressive draws and at the end the goal is still to pull money out to reinvest in the next one :) Not saying it’s a slam dunk everytime and it can still be a complex process, but we generally prefer new builds over old houses
@biggerpockets - Thanks for have Nat on as a guest. Add to you guest checklist asking guests for any social media and any authored books etc 😊. Another build to rent investor to have on would be Winston Templet - does both build to hold and a form of unlocking value in land for developers.
There is a youtuber who buys new construction in new developments with the builder standard finishes. Then upgrades finishes and then sell the upgraded homes.
That is exactly what I am planning. And I will not using any city, with their crazy rules, regulations, … and go off grid. It is cheaper to live off power grid etc and
What does she mean about go into the municipality and have a pre consultation? Is she saying go in and ask them can I build a 8 family here for instance ? Before purchasing a lot and ask what are the limitations? Something like that ?
Oh and you have to meet with 3 or 4 departments. Went to one town where they have everyone in a meeting once a month th for walk through with everyone. People like fire departments usually won't talk to you until you've submitted plans. They tend to be the least flexible, I was even building structures that were fire proof and they wouldn't let me put 1 hydrant between the two houses instead of a dedicated one for each house.
That is crazy I used to always watch income property on HGTV the house prices in Canada always blew my mind. I was just in high school too so barely knew what was going on living in our families 45k home in rural Ohio. Watching people invest in half million dollar homes. 😂
Not sure why everyone ‘loved’ this episode. No meaningful discussion of the costs, the rents she was able to generate, or how the numbers work with this strategy. I kept waiting for you guys to get into the numbers but never happened. Shame.
Anyone that gives you numbers is selling a convention or book. How would her numbers mean anything to where you live. I live Downtown Denver and last year I was talking to bankers in New York and they were shocked at the price of land here. Maybe San Francisco is the only place with higher land values now. How would her numbers have anything to do with me. You should be able to build a house for 20 to 30% below what it appraises for.
@@youandotube99 it’s all feel good fluff bullshit. Just keep on pushing and do your research. Find A GREAT TRADESMAN with a proven trac record. You can bet he’s not out here telling people to put everything they own up to debt to flip a home😂
Building an ADU where permitted is popular right now since it has been "decriminalized" in many areas where housing is needed. I'd love to see more build to rent videos. We picked up some OZ dirt in Florida to test this out, because why not? Our rezoning for 2 townhouses / 2 ADUs supported by the City; NIMBY killed it. We can still build two SFRs + two ADUs which we need to design. Can't break ground until the rates are a bit lower, and we may benefit from deflation by sitting out the long high times. Let's do Build To Rent 201!
I feel like talks here are great but then trying to go to the forums on BP can be very frustrating and depressing. It doesn't convert like the show. People are ranting about how people are on there trying to learn from people or ask for contacts like contractors or lenders. A person responded to one of my posts and wanted to chat until their calenderly invite asked a few questions like funding and goals which wasnt in alignment with theirs which essentially said I was wasting their time. They reached out to me! Its just becoming too toxic for me.
Bummer, I'll keep my 2.6% 30yr fixed. I bought 3- 2.5 acre lots and used construction loans to build out from blueprints from packages I purchased. Once C/O is obtained roll construction loan into mortgage. I was the general on each and walked in the door w/$100K each. Seems new construction builds equity faster than existing while attracting tenets easier. I lived in each a few years before starting a new property over again.
If you're in the US you should look into exiting some to take advantage for the primary capital gain rule. Better to take the adjusted basis and build a new rental when you can.
I wasn’t going to comment and just move on. However this is my playground. The math simply doesn’t pen. Meaning this formula does not work in todays economic environment. You cant just simply refinance at todays interest rates 7+% the math simply does NOT work!!!!! P.I.T.I (principal. Interest. Taxes. Insurance) = NO CASHFLOW!!!!!!!! NO PROFITABLE EQUITY ABOVE BUILD COST!!!!! RISKY GAME AND THIS IS EXACTLY HOW YOU CAN AND MOSTLY WILL GO BUST!!! NOT A WISE USAGE OF DEBT!!!
I don’t think it was explained well, but 10:30 is probably the gist of it. Because of changing laws/zoning, you can maximize space with multiunits. So instead of 1 unit for rent, you’ve built 2 and rent at 70% of the single unit. This changes the math a whole lot.
Not as a landlord. The easiest rent increases I do are waiting until March every other year when my taxes change, then I pring the new tax statement to show the tenant. When they do some new housing affordability program that runs up my cost I pass those along also. Tenants pay the taxes and expenses not the landlord.
Given then we have over 3M members, and a very high member satisfaction rating I think a better question is how many people miss out on improving their financial life because they think they can't learn a relatively simple business.
@@davidmeyer1101 it doesn’t matter how simple or hard it is if they don’t have financial literacy, or basic knowledge of construction. More so, take someone with no trade knowledge, then blame them when the fail, cuz the couldn’t grasp such a “relatively simple business” You and all these hot shot “homebuilders” are all things wrong with local construction industry I bet you are the same kinds of people who beat down your subs and hire illegal workers to do your work. Keep on scheming buddy. 3m hard working folks who now think they can now go build a high rise apartment complexes or the next trailer park slum lord. All while beating the labor markets down. Great job 👏 Tradesman LOVE your kind 😂 especially when we have to come fix it all, your the same guy scratching his head wondering why you had to do it 3 times over…gee I thought it was simple🤥🤥🤥
Hi BP friends. Valentine’s Day, 2024. I have an off market lot in Brea California. Build 8-9 houses. Sellers wants $1.5. No plans submitted. Rent for $5-6k sell for $1million each house. 411 Sievers, Brea
As a builder myself, this is basically what I do, build STRs with cash, finance to pull the cash back out, then cashflow from the rent. New homes have such lower expenses and maintenance needs, much easier to manage and higher demand product. Also far easier to find a deal on building lots than to find a good deal on existing homes. The absolute best strategy for gains if you ask me.
You are so right! I built my STR. This is a great strategy❤
I am also a builder and have been doing spec homes and currently building my first subdivision with my Dad. I built 1 rental and I love it. Everything you say is true. Infinite return since I refinanced and pulled all my cash out plus some extra. Only problem is my cashflow is very low. So I realize I need to build and keep like close to 25-30 doors in order to live off that cash flow since they will all be financed. Its the long game with rentals but im happy I can offset that with development and take the big chunk of cash home and reinvest in some rentals.
@@Tkenny35 Cash flow can be low, especially with traditional long term rentals, although STRs in a good area can do much better. In the end, as long as you are pulling all of your cash back out with the financing youre still getting an "infinite return" on that investment no matter what the cash flow is, as long as it stays positive. So if you ask me its still a good investment. As time goes on, your mortgage stays the same (unless you refi) but rents go up, so after a few years they should be cash flowing much better and you wont need so many properties to be financially free. Keep it up, youre on the right track!
How long do you keep these ‘STR’ properties before selling off?
@@DGarcia007 Not planning on selling them. I prefer to hold for the cash flow and just refi whenever I need to access equity. No reason to get rid of a good investment. Just gotta keep accumulating them, recycling the money from one to the next.
Great podcast. I just started on my new construction on a commercial property that has an 1898 3 story Victorian in disrepair. My husband and I rehabbed and turned into 2 STR units. The property has an existing workshop in the back we building 2nd story on. Bought most items NEW at a discount building places for 90% less than retail. Wrong sized or slight blemish for multi million dollar homes, still new in package. I design around that. My husband does all the trim, flooring, plumbing, electrical including running the utilities and installing the new meters, I do all the architectural design and have an engineer that does full set of plans for $3k. We have 1 full time worker. I sub out framing, roofing and concrete. Purchased the property 2 yrs ago for $340k, have $60k into existing house, will put $80k into new build. ARV is $2+ million. STR income projected at $350,000 yr, not including commercial activities. It's a lot of work, especially dealing with the city, but the juice is worth the squeeze. All the properties we purchase have additional lots and zoning to add more units. A lot of turn of the century houses that are practically tear downs have multiple lots or R2 zoning around our downtown area. The properties are a giveaway sometimes because they have major foundation issues but they are by far the best bang for the buck if you're willing to do the work. Estate sales are also great because most of the time they don't know what they're selling and just want a quick close.
Around $250,000 was made when I sold my flat in Rochester. That's why I was upset when my standard savings account yielded only $171 in interest. It was suggested to me to buy stocks after I conducted some study. Which stocks would be a good place to start?
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
I advise you to invest in stocks to balance out your real estate, Even the worst recessions offer wonderful buying opportunities in the markets if you're cautious. Volatility can also result in excellent short-term buy and sell opportunities. This is not financial advice, but buy now because cash is definitely not king right now!
indeed the mkt & economy has gone berserk, price of great assets like real estate, dividend paying stocks, or gold never comes down easily, in my humble opinion, buy what you can afford today, and working with a financial advisor certainly helps
I require suggestions on how to restore my portfolio and create more effective strategies in light of the huge declines. Where can I locate this instructor?
REBECCA NASSAR DUNNE is her name. She is regarded as a genius in her area and works for Equity Services inc. She’s quite known in her field, look-her up.
I have watched hundreds of BP podcasts and read 10 books from BP, this is the first time build to rent is mentioned. Given how competitive the market is and how expensive interest rates are, I found out that build to rent is the obvious way to create equity in real estate. I think BP should start offering more content on the build to rent .
Bull…. Run the numbers
Right the number don’t really work especially with interest rates higher. People are sell ing there Approved d projects left and right Prices are down.
@@ArtMatuschatNJRSmay I ask which cities or areas ? Thanks
YOU DONT own the property! 😅😂😅Jokes on you
@@SOLDbyYOUMost ridiculous thing Ive ever hear-
Buy-Build-Rent-Refinance is the best strategy!!! Thanks for this excellent episode!!! Do more NEW CONSTRUCTION interviews 👏🏼👏🏼👏🏼😊
I see many agents doing this here. They have been building duplex and selling. I am so happy you made this video, thank you .
I think of this ALL the time. I build 10 homes a year already. A 1900sq ft home on land for 300k that could refi up to 500k. I think the best is to refi at 300 to keep mortgage down with better cashflow. Just gotta pull the trigger.
Where are you located
Are you doing any new construction projects now
No answer.
its cuz these are all bots
In which fantasy are you building 10 homes for $300,000k 😅😂😅
Thanks for having me on BP! I should have mentioned my E-book I wrote on the subject for those who are interested :)
I'm interested! ❤
Where can we find your e-book?
I'm interested! More info?
Where can we find the ebook?
you should’ve definitely mentioned it!!
I scrolled the comments to see if this was already mentioned so I will add a tidbit - as a Mortgage Agent in Canada (Ontario specifically), we are NOT capped at 5 year terms. Lenders WILL offer up to 10 year terms for rates however, the 5 year fixed rate is priced more favourably and is the rate most advertised for. Longer terms are not advertised although they are available. Not 30 years though.
From my personal experience, buying and selling has been waaaay more profitable and with less headaches than dealing with rentals. We had a lot of rentals and the maintenance issues drove us crazy. As opposed to buying a foreclosure or tax property, renovating and flipping for $50k to $100k plus and more. Renovations come with headaches as well but the reward is worth it. We are still selling properties at the top of the market.
Which area are you in? Planned on doing this 10 years ago in Detroit, buying, fixing and renting, refinance and buy another property and keep expanding the portfolio, but now I’m looking back and kicking myself because I did not do it, and would like to start buying a duplex and renovating and flipping now. A lot of the things they talked about in this video resonates with me… how do you get those up front costs, risk of finding the right people, etc.
@@EmilGhiurau There are plenty of areas in Michigan that are still hot. Detroit wouldn’t be on my radar. Bloomfield Hills, Grosse Pointe. Okemos. Buffalo New York, Columbus Ohio, Indianapolis, Minneapolis.. to name a few areas red hot right now. Stop planning and do it, read and watch real estate investment pros and just get going. Stay away from houses with basements and crawl spaces unless you can have it inspected first by a trusted engineer. Some of those houses develop structural issues which can be extremely expensive. As a rule, I don’t buy houses with basements and crawl spaces no matter how sweet the deal.
True as well
Im not building but I buy all new construction townhomes. I love it. I don't want any I have to work on or fix. Then I sell every seven years.
🏠 🏠 🏡
How are you able to cashflow with such high prices and interest rates. I have thought of doing this but the numbers simply don't work for me. Are you putting 25% down on each property?
As someone who does maintenance on our older rental properties, this idea sounds awesome if you can make the numbers work. 👌
The cost of land alone in my area without being surveyed, cleared, and utilities costs around $600,000 to $1,000,000+. Much of the land and area laws do not allow multi-family construction. Say you find a piece of land that enables multi-family. Now, accounting for materials and other building costs, you can buy something built within the past ten years for a better price. Building makes sense in certain parts of the country, but here in my neck of the woods on the East Coast, it's hit or miss. You essentially need to be a big corporation or have multimillions to build multi-family around here.
Agreed 💯 the truth don't know what world they live in but where my rentals are I can barely fined good help for tlc repairs for my rentals can't image building
In less developed areas seeing more rapid new growth (TX) there are rural developments where a developer paves roads and supplies underground power and water to each lot, puts in community amenities, and sells decent acreage within. The land comes at a relative premium of course but a lot more affordable than doing it all yourself. It's great when lakeside or near other interesting destinations.
My first new build was a nightmare because I hired the wrong GC. They messed up the schedule and architecture. It took twice as long to build as expected. Codes took a year to process. The financing was 160k alone. At the end I was able to refinance but could not get back the 500k cash I put out. It is 100% worth the "75k" to have a GC. Gc license is required anyway which requires passing the state exams and paying fees. And having all the sub relationships is needed. After all that I realized I could have purchased an existing new build and been making income for an extra 2 years. Always analyze the development and hold time compared to competing assets such as rehab or buy to rent.
@leland12345 Great info. Are you saying getting GC license is better than hiring GC ? Thanks
Natalie is Amazing! You guys great too. Please bring her back. Learned so much from you guys.
I actually bought a house a few years ago because it had an additional lot with the plan to build on it in the future. I have toyed with the idea and have considered what to put on it, but haven't had the financial ability to do it. I know it would rent well, because the house I bought the lot with has never been empty more than 30 days since I put it on the market.
Im doing this in my town! Works amazing.
As a builder I agree but in current conditions most lenders will not let you GC the build yourself if you have no experience. Also Triplex and Fourplex in some areas like Houston they fall under commercial code so the cost is too high that’s why don’t see many new triplex or 4plex in the area.
do you need to be a licensed GC if you want to build?
@@jmazarie82 Depends on locality, but the other challenge is getting financing if you aren't a GC.
@@jmazarie82no you don't. Never heard of a place you can't build your own primary residence.
It's part of the ICC system of codes.
I love this video. She does So many gems 💎 . Saving this to watch again and again
Our very own Canadian ! Good to see you Nathalie Courtier!
9:25 stabilize your camera. I recommend mounting your camera to a wall or tripod that is not mounted to the desk (which is obviously wobbly).
@17:18 Yes, I always thought my parents were secretly very wealthy and had some land in South Texas that had oil on/in it. For decades, I thought that. It was not true. LOL!
Great job, congratulations. For the past 30 years as a general contractor I have been developing income producing properties in different cities as long as market conditions allow. I operate from Texas. I would like to share some experiences with you.
I love this show. I would definitely love to hear more about new construction.
ok, now we know she does her own design that's huge and is the contractor.. when i hear of real estate ideas being sold .. than you learn the person was raised in real estate or is builder or has good amount of capital to start up and make mistakes.. but it is not revealed in the pitch.. this is common. I like REI but it takes good amount of cash to really start right and knowledge or partner with skill set .. to comfortably get rock'in in ti. there are exception... enjoy the listen
Nice episode! I’ve being wanting to start this type of business since I was in college but, I’m always afraid of the upfront costs. Civil engineer background and a masters in Architecture so in terms of design and construction budget I have a lot of experience. Always thought I needed to have huge amounts of cash to cover these costs. I appreciate she shared her experience and input on this topic. I’m hoping to get started on this type of projects sooner than later.
Maybe wen you ready we can do business
Thank you BP! I have purchased a couple lots with plans to build eventually and this content was right up my alley! Keep them coming!❤
BP! Please do a follow up on this podcast! Make a video walk-through of those homes!!
👀
There are privacy issues involved with filming the inside of rental units. It’s one thing to take pictures of damage, but another all together to film their stuff.
@crazycdn8327 no it isnt an issue. You can film anything in your own house.
@@sparksmcgee6641 The renters have privacy rights. My wife worked for a property management company for several years. Guess it depends on the state but most have privacy laws for renter. You can take videos of damage done obviously. Walking through without permission and filming then posting it? What if they have pictures of themselves out, and sex toys. Easily associate them with the toys and if they find it open yourself up to a massive lawsuit. Remember, you can sue anyone for any reason.
Great insights. Is there an episode where it focuses on more on the preparation and due diligence? Do I buy land first or do the surveys on a land that is not mine yet? How to finance?
Very good information. Building fourplex can be way to go too as you have limited space but can generate multiple revenue stream.
Yes! Fourplexes are our bread and butter 😊
GREAT info! Thank you for sharing this, I love the house hack idea for us newbies as a realistic approach to get into new construction. Really great video 👍👍👍
This is the same idea I am trying to get to work. I am running into issues with getting approved on loans. Basically, the bank wants me to borrow as if I would need to pay a builder to build the home (I plan to build the rental myself with one or two workers but I won’t pay myself).
Do you have any suggestions or ideas?
I am doing this same type of build right now. In order to maximize my returns, I am building with cash/equity from other properties and then getting a loan/mortgage upon completion. The mortgage is capped at 80% of the appraised value, but it’s still plenty enough (or pretty darn close) to pay off the cost to build and the land. With my latest one, I had to subdivide the lot I bought to make it profitable for me. I had a lot of money tied up in the land and land prep so a second duplex we essential to earn a profit. The banks, at least as far as I know, will only do a new construction loan if you go to them for money. If you don’t have enough equity, raising private capital might be worth a shot. You can offer decent returns on short term loans.
I built using a HELOC from another property. Credit unions offer cheap ways to create a HELOC although IME not really cheaper rates once you are using them.
Nathalie est très professional and knowledgeable 👌 kuddos girl!
This is so helpful and timely!!! What resources can you share around taking this method of building to rent !!
How much time does one building cost? I imagine that most investors find it far less time consuming to buy an already built property.
Thanks for the interview and insights. I am doing this with the sustainable building material of hempcrete. Happy to share ideas about building with hemp.
Why would building a multifamily structure on vacant land that you own in anyway be “working against” the city? I don’t follow what possible drawback there would be for the city itself. What am I missing?
Does she buy with access to public water and sewer or does she also build with well and septic? Only areas with electric and high speed internet?
Very relatable to me. Would love to hear more podcast on this subject
Yes more and break it down so it be more simple for an amateur to understand thank You
Thanks guys, I love the information
Is there a way or platform to contact Natalie? I have a quick question. Thanks
Great to see many builders… usually I have seen many moving to cars due to the rent prices
I am an architect and did the build and househack recently in Bellingham, WA. We designed it to have a large (4 bed 3.5 bath) main home with a 1bed1bath ADU rental. I am hoping that the market values the flexibility of this layout, either a SF with 1 rental, or a multigenerational home (aging parents get their own place). The cashflow while we live here will be nice, but the big payday comes when we sell the home. I'm curious how much more this type of home can sell for over a traditional SFR.
My next big leap will be to buy and hold a 4plex rental in Spokane, WA. I can save on the soft cost (being architect and GC), but the challenge will be the upfront capital for land/initial build costs. Hard money seems like a big cost with the high rates, but finding an investor could take a bigger chunk of the profits. Its hard to compare the two without knowing what an investor would take out of the rent/final sale of the home. Are there general ranges that are typical?
Thanks in advance for the advice.
This information was great and helpful. Yes want to know more!
Great strategy. I have a couple of clients who is successful with this method
Not bad, but Canada is different than the USA. Of her five points that started at 7:30 1) New construction is higher value than old construction. Not the case in here, at least not in all markets. In my market new or old does not matter, only zip code, comps, etc. Debt is great when interest rates are 2%, but above 5% Dave Ramsey is right. Generally. New construction is not passive. And addressing 21:40 no, there is some pretty ugly new houses and there are some very lovely older houses. In fact I really love the homes built before WWII (excluding mill houses) far more than almost everything newly built. - But I do love her energy, confidence and 'move forward' drive. Alot of people can do these things but don't and some that can't but would. Also, despite what I just typed, she does make me want to experiment with new construction. Thank you.
This video was great. Please do more on this subject. Thanks.
Can you build on a property bought without mineral included with the property?
Yes! Build to rent sounds awesome
Getting a beat up house and fixing it up is the way for beginners. This is advanced and takes 20 percent down
Built my own place like this in 2011. Coulda made a fortune, but decided to live here instead. My place is iconic in the area and I always thought I could do it again for others, but I still go to work instead.
I am looking at doing that . I just got my approval for my duplex. I am sourcing funding now.
I swear I saw her yesterday at Starbucks in Hiram, GA.....strange. Great interview
Great strategy.
What’s the best source for house hacking?
In my view, unless the buyer has the ability to do much of the work, you are always better off with a neglected property. The strategy you have highlighted will put you in the poor house.
The munipality, getting the land prepared, all utilities, and given in Canada your amortization period and term will present issues.
To be so young, I am jealous, sadly so many experts today❤
Would love to see her books as this is not a slam dunk easy thing as she plays it up. Built several houses and they are an ordeal to say the least and take 6-9 months if you are lucky. Just to get the land you need all the cash or minimum of 60% down to roll into the build. Then getting the engineering and permits are another painfully slow process. Then after all that the 6-9 months starts if it passes the appraisal for the bank with more cash needed most likely. So all in you could have close to 1 year of no income but just cash and time going outflow. Now buying a current dwelling is over in 30 days without the 6-9 months of no income. Just not connecting the dots on this story unless Canada has some slush fund for the masses to do these projects.
It’s very similar to a traditional BRRRR. You only need to put up cash in the beginning to get the project started (or you borrow from a private lender), afterwards the bank refunds in progressive draws and at the end the goal is still to pull money out to reinvest in the next one :) Not saying it’s a slam dunk everytime and it can still be a complex process, but we generally prefer new builds over old houses
This video is so helpful.
What episode is this?
@biggerpockets - Thanks for have Nat on as a guest. Add to you guest checklist asking guests for any social media and any authored books etc 😊. Another build to rent investor to have on would be Winston Templet - does both build to hold and a form of unlocking value in land for developers.
I have a question. What about new construction already built? And you just have to pass on the hassle of the construction part?
20 to 30% of the cost of a new home is what you get to keep when you build it.
I need a mentor to help me learn to build and make proper amount of profits while scaling
Love this content.
There is a youtuber who buys new construction in new developments with the builder standard finishes. Then upgrades finishes and then sell the upgraded homes.
Can I ask, Who appraises the report that details design, costs etc? Is it the city? or an Appraiser?
The Bank if you're getting a construction loan.
That is exactly what I am planning. And I will not using any city, with their crazy rules, regulations, … and go off grid. It is cheaper to live off power grid etc and
Very helpful Thank you for sharing
What does she mean about go into the municipality and have a pre consultation? Is she saying go in and ask them can I build a 8 family here for instance ? Before purchasing a lot and ask what are the limitations? Something like that ?
Yep. You have to do you're own research. Realtors will guide you thru buying a property that you can't use for what you want.
Oh and you have to meet with 3 or 4 departments. Went to one town where they have everyone in a meeting once a month th for walk through with everyone. People like fire departments usually won't talk to you until you've submitted plans. They tend to be the least flexible, I was even building structures that were fire proof and they wouldn't let me put 1 hydrant between the two houses instead of a dedicated one for each house.
What will you need to come to Chicago?
Let's come together
nice strategies!
My dads been a residential land developer for 30 years, and I work for 2 builders. It’s laughable how out of touch they are with how easy it is 😂😂
Looks like it is more favorable to build in Canada.
We never said it was easy! It’s actually very challenging. But anything worth doing is not easy :)
What do you mean by your comment? That it is actually harder to do?
@@Fitdish yes. The people in this video would never be taken seriously
@@coltonr5741what are some things she said that are out of touch? Curious to know
Very good information.
What is house hacking ?
I bought 12 properties during pandemic. I’m not gonna buy any property even if it’s free. Property is the most time consuming thing ever 🤬
Sounds like you’re doing something wrong. Thought about hiring a professional property manager?
Yeah, going from 0 to 12... You asked for a headache.
I have a property I would like to build on but need an investor
That is crazy I used to always watch income property on HGTV the house prices in Canada always blew my mind. I was just in high school too so barely knew what was going on living in our families 45k home in rural Ohio. Watching people invest in half million dollar homes. 😂
!!! Thank You !!!
Not sure why everyone ‘loved’ this episode. No meaningful discussion of the costs, the rents she was able to generate, or how the numbers work with this strategy. I kept waiting for you guys to get into the numbers but never happened. Shame.
Anyone that gives you numbers is selling a convention or book. How would her numbers mean anything to where you live.
I live Downtown Denver and last year I was talking to bankers in New York and they were shocked at the price of land here. Maybe San Francisco is the only place with higher land values now.
How would her numbers have anything to do with me.
You should be able to build a house for 20 to 30% below what it appraises for.
@@youandotube99 it’s all feel good fluff bullshit. Just keep on pushing and do your research.
Find A GREAT TRADESMAN with a proven trac record. You can bet he’s not out here telling people to put everything they own up to debt to flip a home😂
What is a house hack
Still have no idea what she is building, duplex, multi-family, apartments, single family one at a time?
I know right!
We mostly build small multi families! triplexes, fourplexes, and soon starting a couple 6plexes
Ummm, you didn’t listen closely.
@@Pseudify timestamp?
@@thenewbuildcouple thank you!
Building an ADU where permitted is popular right now since it has been "decriminalized" in many areas where housing is needed. I'd love to see more build to rent videos. We picked up some OZ dirt in Florida to test this out, because why not? Our rezoning for 2 townhouses / 2 ADUs supported by the City; NIMBY killed it. We can still build two SFRs + two ADUs which we need to design. Can't break ground until the rates are a bit lower, and we may benefit from deflation by sitting out the long high times. Let's do Build To Rent 201!
Was I the only one piecing together the quote behind Natalie and finding out that the Africa placement on the globe is a reference to the quote...
I feel like talks here are great but then trying to go to the forums on BP can be very frustrating and depressing. It doesn't convert like the show. People are ranting about how people are on there trying to learn from people or ask for contacts like contractors or lenders. A person responded to one of my posts and wanted to chat until their calenderly invite asked a few questions like funding and goals which wasnt in alignment with theirs which essentially said I was wasting their time. They reached out to me! Its just becoming too toxic for me.
Why didn’t you ask for a deal breakdown? Lost opportunity
Bummer, I'll keep my 2.6% 30yr fixed. I bought 3- 2.5 acre lots and used construction loans to build out from blueprints from packages I purchased. Once C/O is obtained roll construction loan into mortgage. I was the general on each and walked in the door w/$100K each. Seems new construction builds equity faster than existing while attracting tenets easier. I lived in each a few years before starting a new property over again.
If you're in the US you should look into exiting some to take advantage for the primary capital gain rule.
Better to take the adjusted basis and build a new rental when you can.
Canada has a fixed 10 year rate too
I wasn’t going to comment and just move on. However this is my playground. The math simply doesn’t pen. Meaning this formula does not work in todays economic environment. You cant just simply refinance at todays interest rates 7+% the math simply does NOT work!!!!! P.I.T.I (principal. Interest. Taxes. Insurance) = NO CASHFLOW!!!!!!!! NO PROFITABLE EQUITY ABOVE BUILD COST!!!!! RISKY GAME AND THIS IS EXACTLY HOW YOU CAN AND MOSTLY WILL GO BUST!!! NOT A WISE USAGE OF DEBT!!!
I don’t think it was explained well, but 10:30 is probably the gist of it. Because of changing laws/zoning, you can maximize space with multiunits. So instead of 1 unit for rent, you’ve built 2 and rent at 70% of the single unit. This changes the math a whole lot.
@@CharlieVNzoning laws rarely change NEXT lie you wanna sell me ?
@@CharlieVN&Someonw ELSEs name is ont the deed- this is a Scam if I ever saw one
&You don’t OWN it a REIT does😅😅😅
Not buying to save money buying because I like the property it just happens to have homes on it
Can't happen here in Massachusetts.
No land to be had
High labor cost
Unfriendly building codes
I’m pretty sure there are the same number of people per capita in Canada as there are in the United States.
That said. Homegirl knows her stuff!
But renewing rates means starting over each time with interest first then principal so technically these are adjustable interest only loans. awful.
But does it cashflow?
property taxes are what kill it in the us
Property taxes are extremely high where we invest as well! We still make it work :)
Not as a landlord. The easiest rent increases I do are waiting until March every other year when my taxes change, then I pring the new tax statement to show the tenant.
When they do some new housing affordability program that runs up my cost I pass those along also.
Tenants pay the taxes and expenses not the landlord.
I wonder how many people bigger pockets has broke/set back 20 years telling them to invest in something they know absolutely nothing about
Given then we have over 3M members, and a very high member satisfaction rating I think a better question is how many people miss out on improving their financial life because they think they can't learn a relatively simple business.
@@davidmeyer1101so who pays & builds it and pays mortgage ……& who owns it earning equity…hmmmmm
@@davidmeyer1101 it doesn’t matter how simple or hard it is if they don’t have financial literacy, or basic knowledge of construction.
More so, take someone with no trade knowledge, then blame them when the fail, cuz the couldn’t grasp such a “relatively simple business”
You and all these hot shot “homebuilders” are all things wrong with local construction industry
I bet you are the same kinds of people who beat down your subs and hire illegal workers to do your work.
Keep on scheming buddy.
3m hard working folks who now think they can now go build a high rise apartment complexes or the next trailer park slum lord. All while beating the labor markets down. Great job 👏
Tradesman LOVE your kind 😂 especially when we have to come fix it all, your the same guy scratching his head wondering why you had to do it 3 times over…gee I thought it was simple🤥🤥🤥
As a former Canadian, the landlord laws are not favorable in Canada.
More content on new constructions builds! XD
What about high Taxes? I can buy a duplex with taxes less than $1000.
No
Try putting your property in an LLC and you’ll never get a 30 yr locked rate
From what I've seen, for us starting out or smaller investors, put the land in your personal name. Operate the rentals with the llc.
Yes you can. I did two cash out refis on houses I have in October.
Hi BP friends. Valentine’s Day, 2024. I have an off market lot in Brea California. Build 8-9 houses. Sellers wants $1.5. No plans submitted. Rent for $5-6k sell for $1million each house. 411 Sievers, Brea
DONT DO ANYTHING NATALIE SAYS. ITS FOOLISH FOR MANY REASONS AND RISKY