Hey everyone, I'm a new investor from Reno NV. I just put my first investment under contract and wanted to say hi.
My deal: I have a good friend who is a contractor and breaking into the new home development world. I originally called him about getting bids on rehabs as I went along with starting my real estate investing. After talking to him we were able to work a deal to buy some of the new homes he is building for below market value. I plan on renting out the first few as they should cash flow moderately after using the brrrr strategy.
The greater Reno area has exploded in the last few years, driving home prices sky high. It has become incredibly difficult to find rental properties that will actually cash flow as the rents have not seemed to keep up with home prices. I adopted my new strategy in Hope's of partnering with my contractor friend to possibly start investing in real estate development.
Any thoughts on this strategy, or am I well out of the realm of what a new investor should be focusing on?
Sounds like a deal, just would ask is your purchase price based on A) a fee 8% over his cost so if his cost is $200,000 to build + 8% markup you’re paying $216,000 (regardless of the appraised value) or B) deduct 20% from appraised value, so if the appraised value is $250,000 - 20% would be $200,000. Or could be a totally different formula since you’re providing the land. Best of luck!!
I Am paying 30% under market value. This first one i am purely purchasing it from him for a good deal, however my end goal is to be the one who holds the properties and have him build and pay him according to a cost plus type contract. The only struggle for me at the moment is obtaining enough capital to buy more than one lot and be building more than one house at a time.
I'm trying to work a plan to find investors that would enable me to do this but being a new investor it is difficult to find people who would trust my abilities to scale at the rate I want with their money.
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