Building new investment properties.
Hey BP! I've been doing some brrr 's in my area the last two years . While I've found some good properties, it's hard finding them. Thinking about building new duplex's . With me being the GC, and subbing everything out. Is there anyone that is currently doing this and do you have any pointers or helpful tips!
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Drew, this is a solid move, especially if you’re already comfortable acting as your own GC. When deals dry up, the people who win are the ones who learn how to create inventory instead of chasing it.
A few things from what we’re doing in Memphis:
1. Run the numbers like a BRRRR, not like a flip.
Your build cost + holding cost + financing needs to land you at 70–75 percent of ARV to make the refinance smooth. New builds feel cheaper because the finishes are modern, but overages are real, pad in a 10–15 percent contingency.
2. Use layouts that rent fast and refi well.
Our duplex builds stick to:
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3/2 each side or 2/2 with open floor plans
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identical layouts for material efficiency
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durable mid-grade finishes (LVP, shaker cabs, matte black hardware)
3. Get your subs locked in early.
The fastest way for a GC-owner to get burned is letting subs run your schedule. Line up your framer, plumber, electrician, and roofer before you even break ground.
4. Don’t skip the rent comps just because it’s new construction.
Appraisers will still use nearby rental stock. Make sure the area actually supports the rents you modeled.
5. Confirm your exit with your lender ahead of time.
Some lenders don't like small-scale new-construction BRRRRs. Get your refinance terms in writing, DSCR requirement, seasoning period, appraisal method, everything.
A lot of investors are shifting to new builds because the acquisition side is so competitive. If you’ve already GC’d projects, you’re ahead of 90 percent of people thinking about doing this.