New to investing and would like consider New build construction

Member since 2025 · 4 posts · 6 votes

Hello bigger pockets family my name is James and I'm fairly new to real estate investing, ive been educating myself on kinda how things work (the lingo, terms,concepts) and still trying to figure out the process of this feild and after watching so many videos and listening to other investors experiences i decided that i would like to take the new land construction route, i was just wondering if anyone could point me in the right direction on how to get my feet with this process. Lastly thank you in advance

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Melissa JusticeBusiness Member

Rental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votes

10mo

@James Friar,

Hey James, welcome to the BP community - great to see you diving in!

If you’re interested in new land construction, a great way to start is by looking into new homes already built to rent. These are brand-new properties developed specifically for investors so they’re often tenant-ready, professionally managed, and designed for long-term durability and low maintenance.

The advantage is you get the benefits of new construction (warranty, modern systems, high rents) without having to manage the build process yourself. Markets like Houston, TX, Columbus, GA, and parts of the Southeast and Midwest have strong rent demand and developers offering solid builder incentives right now.

It’s a great entry point for newer investors who want to start with something newer, stable, and cash-flowing.

Always happy to chat more about what's worked for other investors. Best of luck!

[email protected]313-221-8718

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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
10mo
Hey @James Friar, welcome to BP and real estate! I just sent you a DM with some details. Looking forward to connecting!
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Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
10mo
@James Friar With today’s price of construction materials you will get way more bang for your buck with existing construction.
My bank wouldn’t have financed me for new construction if I was building it unless I had some investing experience under my belt. There’s way too many variables for a newbie when building.
2 Reply
- James Friar
  OP
  Member since 2025 · 4 posts · 6 votes
  10mo
  @Alecia Loveless thank you for insight about new construction how long have you been doing real estate?
  0 Reply
Morris Layton
Developer · Dallas-Fort Worth, TX · Member since 2019 · 6 posts · 4 votes
10mo
What state are you planning to build in, and how many homes, apartments, or commercial properties are you looking to develop?
Do not get discouraged by financing. There is a lot of money out there if you know where to look. Between friends, secondary lending markets, and eager investors, there are always funding sources beyond traditional banks.
I still consider myself a “newbie,” even after years in real estate. As a civil engineer and owner of a firm that works on a wide range of projects across Texas, Nebraska, and Colorado, I have learned the value of thorough due diligence before breaking ground.
If you are doing ground up construction, make sure you understand what you are getting into with the city or county where you plan to build. Permitting and approvals can cause major delays, especially if you are floating a note and time is money.
Here are a few key things I always consider before moving forward:
• Flood zones: Is the property located in a floodplain or near drainage channels?
• Infrastructure: Does it have access to local utilities such as water, sewer, and power?
• Site conditions: Will significant earthwork or grading be required to bring it up to code?
• Long term planning: What is the city’s vision for the area? Check with your local Metropolitan Planning Organization (MPO) to see if there are any upcoming developments such as highways, rail lines, or zoning changes that could affect your site.
These are the questions I run through my head every time I look at a new opportunity. They have saved me and my clients countless headaches down the road.
1 Reply
- James Friar
  OP
  Member since 2025 · 4 posts · 6 votes
  10mo
  @Morris Layton thanks for the insight I'm near Chicago at the moment I wanted to do a couple projects maybe single family homes so that I could learn the process and continue to network with people then eventually venture off into other markets, any advice?
  0 Reply
Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
10mo
Although I hear there are favorable terms for buying new builds as rentals I don't see that in my area and instead tend to think of new builds like new cars. It seems to me to be a flawed safety net for new people. You are paying top dollar and as soon as you drive off the lot it may depreciate especially if there are brand new alternatives for sale and things still break or don't function even early on.
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Jonathan KlemmBusiness Member
Moderator
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
10mo
Hey Hey @James Friar - That's a challenging space to get into from the get go, but no impossible. My 3rd project was a ground new construction project in the Chicago Bucktown neighborhood.
I'd highly suggest getting in touch with some active developers and spending as much time with them as possible. If you can work for free I HIGHLY SUGGEST doing that!
Is there a specific location you are thinking about looking for land? And do you have a specific acquisition strategy for the land?
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Aaron ZimmermanBusiness Member
Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
10mo
Welcome James! I'd recommend going to some local construction meetups in the Chicagoland area. There's a ton of great general contractors that you could likely meet there that can point you in the direction of developers
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Melissa JusticeBusiness Member
Rental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votes
10mo
@James Friar,
Hey James, welcome to the BP community - great to see you diving in!

If you’re interested in new land construction, a great way to start is by looking into new homes already built to rent. These are brand-new properties developed specifically for investors so they’re often tenant-ready, professionally managed, and designed for long-term durability and low maintenance.

The advantage is you get the benefits of new construction (warranty, modern systems, high rents) without having to manage the build process yourself. Markets like Houston, TX, Columbus, GA, and parts of the Southeast and Midwest have strong rent demand and developers offering solid builder incentives right now.

It’s a great entry point for newer investors who want to start with something newer, stable, and cash-flowing.

Always happy to chat more about what's worked for other investors. Best of luck!
[email protected]313-221-8718
3 Reply
Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
10mo
Quote from @James Friar:

Hello bigger pockets family my name is James and I'm fairly new to real estate investing, ive been educating myself on kinda how things work (the lingo, terms,concepts) and still trying to figure out the process of this feild and after watching so many videos and listening to other investors experiences i decided that i would like to take the new land construction route, i was just wondering if anyone could point me in the right direction on how to get my feet with this process. Lastly thank you in advance
Hey James, welcome to BiggerPockets and that’s awesome you’re diving into real estate and already thinking about new construction—it’s definitely a big but rewarding route. The best way to get your feet wet is to start by learning your local zoning and permitting process, connecting with builders, and really understanding land values versus build costs so you can figure out what makes a project profitable. I’d also recommend studying infill projects or small developments that are actually getting built in your area so you can reverse-engineer what’s working for other investors. If you’re open to exploring different markets, Columbus, Ohio has been a really hot spot for both new construction and rentals because of the strong population and job growth, tons of companies expanding here like Intel, Amazon, Google, and Honda, and the numbers still make sense compared to most metros. A lot of out-of-state investors are developing and cash flowing here since it’s still affordable and appreciating fast. Happy to connect and answer any questions you have!
[email protected]614-300-7535
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Kerlous TadresBusiness Member
Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
10mo
Hey @James Friar, welcome to the BP fam! I like that you’re diving into new construction; it’s a solid path if you learn it right. I’d start by talking with a few local builders or investors who’ve done it before so you can get a feel for costs, permits, and timelines. Even walking a few active sites will teach you more than a dozen videos.
[email protected]614-490-1163
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James JonesPro Member
Investor · Collierville, TN 38017 · Member since 2017 · 637 posts · 465 votes
10mo
James, welcome to the game, and props for actually taking the time to learn the language before jumping in. Most people skip that part and end up paying for it later.

Since you’re looking at the new-construction route, here’s the simplest way to get your feet under you without getting overwhelmed or making expensive mistakes:

1. Study the process before you study the deals
New construction is all about sequencing and managing risk. At a high level, you’ll want to understand:
• land acquisition
• zoning + entitlement
• architectural plans
• permitting
• financing (construction loan vs hard money)
• GC bidding + subs
• inspections
• certificate of occupancy + exit strategy

Once you understand the order of operations, everything else starts to make sense.

2. Walk projects in person with people who are already doing it
This is the fastest way to level up. Reach out to small builders, GCs, or investors in your area and ask if you can shadow a site walk. Most of what you need to learn won’t come from YouTube, it comes from seeing framing issues, foundation work, change orders, delays, and what a clean jobsite actually looks like.

3. Start with infill new construction before raw land development
If you’re newer, infill builds (existing lots in established neighborhoods) are much easier:
• utilities already accessible
• zoning typically already set
• comps are more predictable
• less site work surprises

Raw land development is a different business, avoid that until later.

4. Build your “A-team” early
Before you ever buy a lot, you should already have:
• a GC or builder you trust
• architect + engineer
• lender who does construction loans
• surveyor
• real estate agent who knows new-build comps, not just resale
• title company familiar with construction draws

Your team will save you from 90% of beginner mistakes.

5. Run the numbers like a builder, not a landlord
New construction profit comes from tight budgeting + timeline control.
Make sure you:
• get multiple GC bids
• include a 10–15% contingency
• stress-test holding costs and delays
• underwrite conservative ARV

If the deal still works under conservative assumptions, you’re on the right track.
1 Reply
Roberto Reyna
Lender · Houston, TX · Member since 2025 · 35 posts · 24 votes
10mo
Hey James,
It's going to be difficult to get financing if you've never done a new construction or even a flip. I understand the appeal of new construction, but building and developing is a completely different ballgame. If you have zero experience building, you can start with a flip to get an idea of how it works. Costs of labor, material, structural design, etc.
0 Reply
Juan Cristales
Investor · Willis, TX · Member since 2014 · 245 posts · 124 votes
9mo
James! Welcome man!

I have to agree with @Alecia Loveless that it is going to be a bit of challenge getting financed... but don't let that stop you! You're an entrepreneur!
Looking back on all the fix and flips I've done, hands down... I WISH I would have started in New Construction. It's where I ended up and I'll make just a couple of arguments FOR starting with New Construction.
1. Plan, plan and OVER plan... get that right and you shouldn't have any major budget surprises. Unlike fix and flips, they always come with surprises and budget overruns.
2. Starting with New Construction, you'll get a better understanding of how the 5 Major Systems of a house work: Structural, Roofing, HVAC (Mechanical), Electrical and Plumbing.
3. You'll "almost be forced to..." learn the permitting process. Too many fix and flippers try and get work done without permits, thinking they are saving money. In reality, it's actually a good checks and balance approach to understanding inspections and what code compliance really entails.
Whatever route your chose, you'll have plenty of people here willing to help you out.
Keep everyone posted. Stories of trial and tribulation are engaging because they speak to all or our lives!
Juan-
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Lindsay DavisBusiness Member
Real Estate Broker · Birmingham, AL · Member since 2019 · 326 posts · 203 votes
9mo
@James Friar,

There are real benefits to new construction rentals. The lack of maintenance and capex needs is one benefit. The ability to command higher rents, since you own the newest housing stock on the market, is another.

That said, doing a ground-up development deal as a new investor is going to be difficult. You want your first deal to be a success so that you hopefully feel comfortable doing another, so you don’t want to bite off more than you can chew.

If you’re interested in new construction rentals, there are build-to-rent homes you can buy. These new homes are either rent-ready or already have a tenant in place. Some are also serviced by turnkey property managers, so you won’t have to deal with the day-to-day work of landlording.

Just another approach worth considering!

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