New construction duplex / no cash flow

1 Reply

Hey guys, im a new motivated investor,i am 20 year old and im looking to buy a rental property in the future but where i live 90% of the rentals do not cash flow and if they do, they are D class property or non-legal/non-conforming duplex/triplex. So because of that im looking to buy my dad's land and build a duplex on it, one of my uncle has been doing this for around 8 years and already has 6 duplexes built, he's getting negative cash flow or break-even if lucky on his units, ive heard cash flow is important when buying rentals units but all he get is pretty much 50k-100k equity when built and mortgage pay down from his tenants and good appreciation, is it worth it for me to build a new duplex if i need to withdraw 100-200$ a month to pay for my negative cash flow each month?


@Nicholas Gour - If you build a duplex that you need to pay $100-$200 for each month, you have built yourself a liability. You're going to pay $100k+ to have a property take $100-$200 from you each month. This makes very little sense. 

The only way for you to truly make money on this property is through appreciation, which is essentially gambling, but a lot more work. 

Unless you have some insider knowledge or an extremely high degree of confidence this property will appreciate, I suggest sticking to properties that cash flow. 

P.S. - Great that you are getting started on this so early in life! Keep it up! 

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