Building four-plex in growing market?

Question

If there is a current actively growing market for residential building happening in a designated area, and there is no existing 3-4 unit houses currently located there, would looking into building a complex with multiple 3-4 unit buildings be a good/recommended move? Would that be a marketable project for property investors to buy these buildings as they are built for their own portfolios? Or would you say, if I could gather the resources to accomplish a project of this size to just rent the units individually or sell the property as a whole?

Looking for opinions on the matter.

Torrell Palmason · Answer

If there is demand for housing then adding more housing is usually a good bet.

If you go to build the complex you'd want to plan to be cash flowing by completion of the project. That way if you chose to sell and the numbers were too low you could shift gears to renting and still be making profit versus subsidizing the monthly mortgage. Personally I think renting will profit more long term but selling will get you more funds in your pocket to start another project.

Best of Luck!

Michael K Gallagher · Answer

Hey @Neil Furry here locally in my market of central OH there are several pockets of I think what you are describing...4 unit town house buildings all grouped in an area but all separately parceled, at least that is what I have seen here.  It seems to be beneficial because then technically they would qualify for an owner occupant loan and an owner occupant is who will spend the most money on a building like that.  If you developed them in areas with better than average schools, and with the house hacker in mind I think there would be a promising business plan there.