New Construction Multi-Family Investor

Member since 2024 · 3 posts · 1 vote

Hi,

I have been looking to buy a multi-family property in the Tampa, Florida area for roughly 1.5 years now and haven't found anything in particular that I was interested in. Recently, I have been doing research into new construction and there seems to be so much information surrounding this topic. Does any have a source or an outline of steps needed to be taken? I'll find a resource but find it to be very underwhelming and un-informative. Should I hire an architect and GC before even having anything laid out and use them as resources? I am not sure where to proceed with this potential project.

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Noor Odeh

Inspector · Wesley Chapel · Member since 2024 · 7 posts · 10 votes

I find this is a very interesting topic. As a licensed inspector I get this question asked frequently. After experiencing different types of inspections with all kinds of properties from custom builds to existing, it all depends on your end goal , I highly suggest you reach out to a team, really strong team such as @Jorge Vazquez. They will direct you.

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Doug SmithPro Member
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
2y
I'm not only a lender, but we've been doing new construction in the Tampa Bay area for many years. My wife is actually an account exec for a Development Lender up to $20M and my company lends up to $3M. That being said, the first question we have is "what is your level of experience". Even though I had been lending already when we started this company during the last crash, I still partnered with someone more experienced than I and I learned. An architect and a GC are only a part of the formula. There are courses out there, but I've found few if any of them actually know what their doing and give good advice. Partner on 3 or 4, then head out on your own, but you'll need to identify what you bring to the partnership. Capital? Construction Experience? The lot? The Tampa Bay area is a great market, but using any site of blog to learn construction isn't something that you'll be able to do successfully. Good luck to you.
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Jorge VazquezBusiness Member
Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 695 votes
2y
I've been doing this for 20 years, and I still think buying existing properties is the best option. Building new sounds great, but it's usually way more expensive per square foot when you factor in land, materials, labor, and permits. Plus, it takes a lot of time to get everything approved and built. With existing properties, you can start earning rental income faster and build equity through sweat equity by making improvements yourself. You might have to lower your cap rate expectations in the short term, but it's worth it for better long-term gains. Overall, it's just a smarter investment in my experience.
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Noor Odeh
Inspector · Wesley Chapel · Member since 2024 · 7 posts · 10 votes
2y
I find this is a very interesting topic. As a licensed inspector I get this question asked frequently. After experiencing different types of inspections with all kinds of properties from custom builds to existing, it all depends on your end goal , I highly suggest you reach out to a team, really strong team such as @Jorge Vazquez. They will direct you.
2 Reply
Joshua Bloom
Clearwater · Member since 2019 · 17 posts · 2 votes
2y
Hi Tahreak,
You have to be just as careful purchasing new builds, many of the homebuilders I noticed sometimes cut corners and you might have more maintenance related costs than expected. I worked for a REIT (Real estate investment trust) that mostly bought new builds and the problems and maintenance issues were more of a problem then they previously perceived. Sure, many of the issues were warrantied and covered under the builder, but you would have to schedule with certain vendors making residents wait weeks for repairs. In order to undertake a new build I would have to personally know the builder and be comfortable with his work. There are many great investment deals in the TPA area. Let me know if you want me to search for you. Good luck and hope this helps.
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Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
2y
Quote from @Tahreak Robinson:

Hi,

I have been looking to buy a multi-family property in the Tampa, Florida area for roughly 1.5 years now and haven't found anything in particular that I was interested in. Recently, I have been doing research into new construction and there seems to be so much information surrounding this topic. Does any have a source or an outline of steps needed to be taken? I'll find a resource but find it to be very underwhelming and un-informative. Should I hire an architect and GC before even having anything laid out and use them as resources? I am not sure where to proceed with this potential project.

do you want to do it in tampa? we would be able to assist in Miami FL or Columbus OH vertically integrated
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Tahreak Robinson
OP
Member since 2024 · 3 posts · 1 vote
2y
Quote from @Doug Smith:

I'm not only a lender, but we've been doing new construction in the Tampa Bay area for many years. My wife is actually an account exec for a Development Lender up to $20M and my company lends up to $3M. That being said, the first question we have is "what is your level of experience". Even though I had been lending already when we started this company during the last crash, I still partnered with someone more experienced than I and I learned. An architect and a GC are only a part of the formula. There are courses out there, but I've found few if any of them actually know what their doing and give good advice. Partner on 3 or 4, then head out on your own, but you'll need to identify what you bring to the partnership. Capital? Construction Experience? The lot? The Tampa Bay area is a great market, but using any site of blog to learn construction isn't something that you'll be able to do successfully. Good luck to you.

My level experience is near 0. Ive done a bunch of research but have not actually done any projects. I would be providing the land and capital so in this case i am pretty much just looking for a mentor.
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Tahreak Robinson
OP
Member since 2024 · 3 posts · 1 vote
2y
Quote from @Jorge Vazquez:

I've been doing this for 20 years, and I still think buying existing properties is the best option. Building new sounds great, but it's usually way more expensive per square foot when you factor in land, materials, labor, and permits. Plus, it takes a lot of time to get everything approved and built. With existing properties, you can start earning rental income faster and build equity through sweat equity by making improvements yourself. You might have to lower your cap rate expectations in the short term, but it's worth it for better long-term gains. Overall, it's just a smarter investment in my experience.

I agree with you. I may just have to just keep watching the inventory and wait for something I like to show up
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