First New Construction - Rental Duplex From the ground up
Hi Everyone-
Thought I'd share a quick success story that the group can benefit from. Prior to completing this Duplex, I had 3 others in the Omaha area. From 2009-2013, I bought the others for around $75/sq ft. As market values increased, it became more and more difficult to find additional properties. Over the past 2-3 years I've made and had several offers rejected. Rather than paying a price that would yield unattractive returns, my real estate mentor suggested we build new construction.
It took nearly a year to find the corrrect land, but we eventually found a 6 lot package in desirable Papillion, NE. My mentor, myself, and another investor split the lots and began construction around a year ago. Construction took the better part of a year as we hit some speed bumps with the city, and weather, but the property is now completed, rented and cashflowing.
Some key lessons I learned througout the process
- Finalize your plans as soon as possible. If I did this again, I'd do this in parallel as the deal was closing (most likely using the same house plan with little if any modification)
- Make sure power is already run to the lots before purchasing. There is some weird red tape with OPPD. They prefer to run power to an entire subdivision at once, so if one investor is ready before another issues may arise
- Realize that mistakes and delays will happen and some are unavoidable. Ex: suppliers drop off the wrong materials, El Nino will bring feet of snow and 3" rains that slow down your framing, etc.