Building vs Buying (Duplex)
I am a real estate agent new to the Denver area. My wife and I live down in Castle Rock and we have been thinking through some different ways that we can jump into real estate investing. The housing market in the Denver area is red hot and has been that way for the last 5+ years. It will take us a little while to save up enough to buy a multi-family unit here in Denver. I had another idea I wanted to run past y'all. I know there are several plots of vacant land in Denver and the surrounding areas. My idea was to buy a plot of vacant land for around 80-100k and then purchase one of the Menards or Lowes duplex plans and build that on the property. I can purchase all the materials and the land for around 200k. The cheapest duplexes in the Denver area are selling for around 400k. We would like to build the duplex and live in one side and rent out the other side. We would do this for a year or two until we could borrow against our equity to purchase a single-family home. Then we would rent out both sides of the duplex and use that as our launching pad. I know there are additional expenses of tying into city water, electricity, and sewage. I'm not sure how much those expenses would be. If I could keep all of the costs under 400k I feel like that would be a worthwhile investment because I would end up with a brand new duplex for less than the cost of purchasing a very low end duplex. I would be able to save quite a bit on the building side as I could do close to 60% of myself. I'm open to hearing other thoughts about my idea? What am I missing? What are some additional expenses I'm not thinking about? Has anyone ever tried something like this with success or failure? Thank you in advance for your input.
Blessings,
Jay Young