New to Real Estate · Houston TX · Member since 2025 · 4 posts · 3 votes
For those of you who buy and hold, how do you decide between new construction and resale homes? What key features or attributes do you consider when making your decision?
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
8mo
Heidi,
In many states New Construction can be a horrible first investment for multiple reasons. First in most states there is a steady decline in value on New Construction due to COVID over priced markets and over priced New builds due to being in an inflated market over the last 4 years that is just now correcting in many cities.
Texas and Florida are both states that you can see this just by looking at the last 3 years of sold homes by each builder. You can view this by pulling an address of interest or adjacent recently built/sold home and compare sold price versus current zetimate or recent comps. I tried to save a buyer last month buying in Parrish florida. Builder had 18 months of sales every previous home now underwater/less value by $30K or more!
This is due to Rural area but also declining market and builder cutting prices at end of year to get rid of inventory to avoid roll over costs like taxes, Insurance, warehouse line fee' etc. But every time a builder reduces prices it automatically lowers the value of the previously sold homes.
This is just something to keep in mind or food for thought! There are multiple builds where this may not apply but this is a strongtrong buyer beware. My biggest reason of opinion - your buying brand new or more than likely your going to buy at market, or over and cannot refinance or pull cash for 3-5 years.
Be better off buying a home with some age that needs a little TLC, simply renovate and enjoy the quicker ARV to pull cash out in 6 months or more. I call it "Ugly Inventory" but it offers a more attractive (Lower) price and little renovation cost you can recoup reno cost and pull out more for the next REI purchase!
If you ever feel like talking REI send me an email I would be happy to show you areas and how I find the good/bad locations plus run ARV in advance. You can check out my profile to check out my info and email.