New Duplex Build 1st Investment Property

[Donny Sikes]

How bad an idea is building for your first investment property? 200K down on 400K new build duplex. We built our residence in 2008 and man I should've built 5 then! LOL. Gave that context as I have that as experience to guide me this time. I also own a 140 acre farm that has moved from paying for itself to positive cashflow. I'm actually ELOC loan for the 200K down payment. Build site is a block down from my house, so I'm planning to manage myself. Even with 200K down on a 15 year fixed, It's barely $160/month cashflow positive. Putting that much down gets my DSCR about to where I need it. Banking an 11% vacancy since there are only 2 doors. Big thoughts are I'm 43 and can retire from my W2 career (Middle school principal) in 10 years, and I want my investments ready and waiting on me then. Thanks in advance for your thoughts!

[Tanner Lewis]

Hey Donny - I would advise against building your first deal unless you have extensive GUC experience. You can do it all cash, but if you are looking for financing, that will be difficult without GUC experience. 

Another thing I see is investors building properties that are ineligible for financing. I have seen a few tiny home rural STRs that are really tricky to finance, even with a DSCR loan.

[Amir Wynn]

Donny

My name is Amir Wynn and I came across your post here. Have you taken any action yet in doing your first deal? 

I also agree with the below comment on a duplex build that struggles to cash flow. There’s a ton of existing opportunities if you’re interested, let’s connect.