Investor · San Antonio, TX · Member since 2018 · 188 posts · 53 votes
I prefer not to borrow money, but if I have to how? I personally want to finance it with my teacher's salary, and my side hustles one step at a time until it is finished. What does everyone personally think?
More info about the house: ranch style, single-story 3/2 house, and min 1,500 sq ft. The lot is paid off and is free and clear.
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
6y
@Juan David Maldonado, financing ground-up construction is going to be very challenging right now. Perhaps you find a partner to bring the rest of the cash? Bank financing for new construction, HML, and private money is pretty much frozen right now.
More importantly, have you run the numbers, I mean really run the numbers on this? Even without paying for the lot, new construction is going to run at least $150/square foot. Maybe a lot more, depending on where you're located. That's at least $225k. Now factor in the value of the land. $250k+. If this is to be a good rental and good use of your money, you want to be close to the 1% rule. So, will a SFR like this rent for $2500/month? I already know the answer: it's no. It will not.
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Juan David Maldonado leverage is the best way to expand and scale your portfolio. Read Rich Dad Poor Dad. There is good leverage and bad leverage. I dont think its a bad idea to use your own cash at first. Once you raise your Real Estate IQ then leverage will help propel you to the next levels.
Investor · San Antonio, TX · Member since 2018 · 188 posts · 53 votes
6y
@Jaysen Medhurst yes, I understand, and agree it is going to be hard. What is your opinion on going the modular home route? Cut cost, time, and since I own the land already.
@Alex Deacon thank you for your input. Yes, knowledge is power.
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
6y
I think modular homes can be a great building solution in some situations, @Juan David Maldonado. The reality is that they're rarely less expensive than stick-built homes. You do save a lot of time, though. No matter which route you take, you still have to account for getting all utilities to the site, which is always a big number.
I have a lot and last year I ran the numbers. About 1400 square feet. I couldn’t get it done for less than 130K and that’s calling in all favors and me working on it as well. Modular will only save you time. The cost is about the same. Some cities don’t allow closed wall construction so make sure you check.