Real Estate Investor · Phoenix, AZ · Member since 2015 · 25 posts · 3 votes
Hey guys,
We flip and BRRR houses right now. Our company is growing. My project manager is a killer. We've raised a ton of capital.
I feel we need to level up. Definitely in the commercial arena.
There's something sexy about developing and holding but I know it's a long-term process. But at the same time, I know it's an invaluable skill.
I see many real estate investors that are buying distressed apartments/MHP/commercial and BRRRing them at a super fast pace. But at the same time, making sense of BRRRing in the Phoenix market is quite difficult to make sense of syndicating and giving a out a pref.
What I don't want to do is to start investing in other markets. I wish to keep it local.
So my question is, if I wished to build a commercial portfolio local to Phoenix, would it make more sense to BRRR a new build or to buy used?
Rental Property Investor · Northern Virginia · Member since 2019 · 793 posts · 620 votes
5y
@Dan Nguyen The issue you are probably going to see right now is the cost and lead time needed for materials whether you are going to value add or do ground up construction. I would say new construction may be a little more risky right now due to those factors. Our construction general manager on our team is advising us against doing this right now, unless you are ready for longer than normal construction times and higher costs.
My opinion is to look for value add if you can. I know the Phoenix market is very competitive right now, however.
Real Estate Investor · Phoenix, AZ · Member since 2015 · 25 posts · 3 votes
5y
Thanks a bunch for the feedback! The issue is the good opportunities in Phoenix are few and far between. So my thought was to buy land and make it yourself. But you’re right. Lag time right now is killing the game. It may get better but it could also get worse.