Can an amateur build new construction 4 unit?

Question

Hello all,
I want to build a new construction 4 unit apartment building.
I have general contractor experience buying and rehabbing properties but I've never built new construction. I want to be the general contractor on the project and pull all the permits myself and purchase all of the building materials myself but I want to hire subcontractors in each trade to work different aspects of the project.

I've heard a lot of experienced people tell me this isn't a good idea but also I've talked to other experienced builders telling me yes it can be done.  The reason I want to take on this task is that here in my market in Illinois there is a need for this type of development.

I also believe that by doing it this way I can significantly reduce the cost instead of hiring an experienced builder to GC the entire project.  I want to know the opinions of anyone with experience or knowledge about this.

Louis Jeffries · Answer

@Leslie LaBranche Yes You can. Speaking as a lender, you must be financially strong as most programs do not allow in experienced investors. To overcome this and qualify for an exception, you must have a very experienced builder working for you. You should have very good credit and strong liquidity (liquid assets for down payment closing costs and reserves). The property must cash flow well and have good after construction value.

That said, new construction rental property can be a great investment.

Leslie LaBranche · Answer

Hi Louis, thanks for the response.  Yes, my credit is excellent and I'm prepared for the down payments and any closing costs that may be necessary the only thing I believe I'm missing is the experienced builder to work for me.