Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
10mo
Biggest lesson, new home builders have pre-arranged below market interest rates available. I bought this year with 4.25% and 4.75% fixed interest rates. And some others builders that were offering as low as 3.5% interest. Here's the deal, new home builders have lots of inventory, sure they want to sell to owner occupants that are going to live there and get regular owner occupant mortgages like conventional, FHA and VA. But since they have inventory already built and just sitting there vacant and unsold, they want to move inventory. The builders are not willing to Lower prices and disrupt future comps and sales, but they are willing make other concessions, like appliance, fences, builder upgrades, and mortgage buy downs. They ones that I bought are all positive cash flow with those low interest rates, and they all rented in 2 weeks. The tenants got to move into a brand new house, never occupied and for less out of pocket than if they would have bought. No down payment and no closing costs for the tenants. For them renting is a lot cheaper than buying the same house.
Wow… just wow! The fact that builders are essentially giving below-market financing AND upgrades to move inventory is next-level, like a hidden arbitrage in plain sight. Positive cash flow and a ready-to-go tenant in two weeks? That’s a masterclass in seeing opportunity where most people just see “new home prices are high.”