SLC New Inventor Looking to Build a Rooming House from Scratch

[Kip Werking]

Hi, I'm a new REI guy in SLC (attorney by day).

I like house hacking, costseg, STR, and BRRRR strategies, and I'm trying to combine all of them into my next deal.

I basically want to create a new built, from scratch, on the outskirts of town, that was built to be a rooming house for house hacking and then, after one year, can be converted to AirBnB for costseg bonus depreciation.

I'm looking for an agent/realtor/builder/expert who can sit with me on a Zoom call for 10-15 minutes think this out and brainstorm. Even better if I can sit down with a builder and get started on funding and blueprints.

This meta-strategy will use all the above strategies:

1. house hacking: house will be built from scratch to maximize rent/room, while having a family unit/ADU for my family to live in one year
2. costseg/STR: the building will be built from scratch to maximize bonus depreciation. May also want to maximize square-footage of property in comparison to land size, since land does not contribute to costseg
3. costseg/STR: after one year, convert the entire building to AirBnB rentals
4. BRRRR: can add a modular bedroom/bathroom/pool/hot tub to rehab, rent, refinance, and repeat

If I do this right, I think I can still use a 5% conventional loan, although I might be wrong about that? I need an expert who has experience with new builds to help me figure that out. I may have enough HELOC on my current (second house) for a higher down payment.

[Jonathan Greene]

What you are proposing is a theory, it doesn't make sense in real life. You created a financial model of what you want to happen to your money and investment, but the actual process makes no sense to me at all. It's like a buffet in Vegas where you can get sushi, eggs, steak, cake, noodles, pasta, you can't decide what it is.

Where are you finding the land for this build? Do you think the cost of the build will work out as you expect? Why would an STR rooming house work? What's the benefit to the guest of being on the outskirts of town?