New Member (Multi-family Question)

[William Kane Rodriguez]

Hello everyone!

My name is William Rodriguez, I am currently separating from Active Duty (Air Force) in the next 30 days. My wife and I have been living overseas for the past 4 years saving every penny we earned to come back to the states and use the VA Home Loan to purchase a multi-family. New to real estate investing, been a successful stock/crypto swing trader but excited to get into the Real Estate game.

Right now something I am back and forth with is purchasing a new build multi-family home or an already existing one. For some reason I am more nervous going the new build route. Does anyone have any tips or advice on this subject? (we are moving to San Antonio, TX)

[Randall Alan]

Quote from @William Kane Rodriguez:

Hello everyone!

My name is William Rodriguez, I am currently separating from Active Duty (Air Force) in the next 30 days. My wife and I have been living overseas for the past 4 years saving every penny we earned to come back to the states and use the VA Home Loan to purchase a multi-family. New to real estate investing, been a successful stock/crypto swing trader but excited to get into the Real Estate game.

Right now something I am back and forth with is purchasing a new build multi-family home or an already existing one. For some reason I am more nervous going the new build route. Does anyone have any tips or advice on this subject? (we are moving to San Antonio, TX)

@William Kane Rodriguez

I think most of my concerns would primarily be around the timeline factors associated with any new build.  

Just know that the quoted time to build something may vary GREATLY from what you are told up front.  A relative of mine built a new house (granted during what turned out to be the pandemic era) and it took over a year longer than expected.  A lot of that was due to permitting.  But there’s also just a lot of challenges in getting skilled people to do the work, and I would now suggest the tariff situation could impact you adversely from a supply perspective and increased costs for materials.  So you definitely will be taking on more unknowns doing a new build.  I would anticipate whatever you are quoted for a completed price to be higher than that when finished due to the above.  Builders get to adjust the price of things if their costs go up… just keep that in mind.  

The advantage of a new build would be that you get to make it exactly how you want it.  One thing to keep in mind is to avoid over-spending on the units that are not for your personal occupancy if you are looking to optimize profits.  Tenants do not require fancy wall finishes, or solid surface counter tops, or top of the line  “anything” to be quite honest.  “Nice enough” and  “functional” should probably be the typical goal for a rental unless you are going to be charging a premium rent. 

The other advantage of a new build is that your maintenance expenses will likely be lower in the first 5-10 years.  No new roof, new hot water heater, and likely few calls for AC repairs, etc. 

It probably would depend on availability of what units were out there to choose from if I were making the call.  If there was something that worked, it would get you into the multi-family business 12-18 months faster than having to do the new build, with a lot less unknowns.  

All the best!

Randy