Anyone have experience with Build To Rent (B2R)?

Question

I am curious if any one has experience or opinions with Build To Rent? I searched the forum already, most recent posts are 4 years or older, so thought I would make another! I recently came across the idea after finding some lots for very cheap in my area, and found this video which also made it sound very appealing!

Developers make money on top of what they pay builders, If I were to hire a builder directly you would think I would retain the "sweat equity" that normally the developer would take on top right? Maybe making it possible to refinance later and pull some of my initial capital out? Or am I missing something?

Thanks for the insight!!

Nik Moushon · Answer

@Andrew Rushinghttps://www.biggerpockets.com/...

Here is a LONG post of how I managed to a build to rent duplex.

Alvin Taveras · Answer

@Andrew Rushing Thanks for the question.

Doing a Build-to-rent on your own is a lot easier to justify on the high-end or multi-families. At the mid to low price point, the head trauma isn't worth a potential small savings. Also if you are a first-time developer there are a lot of costs that you may not have calculated (construction loans, building fees, connection fees, lot clearance etc). Also if you are building in an area with cheap land, you want to make sure that the property will appraise for your end-loan amount. Unless you are looking to scale this business, it might be a better option to partner with a spec builder who is already doing this. This is all from my experience working with investors looking at Southwest Florida.

Let me know if you have any additional questions.

Andrew Rushing · Answer

@Nik Moushon thank you so much!! That was an awesome write up!!

Andrew Rushing · Answer

Am unable to post the link to the video. but if you search "Build to Rent Duplex Case Study: How One Rental Real Estate Deal Replaces a $40k/Year Job!" you will pull it up.

Andrew Rushing · Answer

@Alvin Taveras thank you for your input! Appreciate the response!