Looking for a multi-family unit, build vs buy?
I have been looking at multi-family units in the Oakland/Berkeley area, my plan is for a long term hold/income. Would like to get a 4 to 8 unit place. All the projects I have seen show 4-5% return. I have moved my focus to building vs buying. Getting a lot and doing the construction. When I do the numbers for a 6-unit project in Oakland, I can get the return up to 9-11% via the build route.
Does the unknown of construction scare people or do some members do this ? I can raise the money to buy the lot and project planning, will need a construction loan. I do have some experience dealing with the city, permits etc.
Any suggestions/experience on construction loans? Other pitfalls doing what I am thinking?
Please share your ideas and experiences on the same.