Build‑to‑Rent Boom: How Are You Making It Work?

Question

Good morning everyone!

I'm Chase, an investor and builder based in Little Rock. I spend most of my time juggling new construction projects, rentals, and property management. Lately I’ve been paying close attention to the build‑to‑rent space because it seems to be gaining momentum everywhere.

From what I’m seeing, a lot of people, millennials, Gen Z, even some retirees, love the idea of brand‑new, professionally managed homes without the commitment of ownership. For builders and investors, there are real benefits: you can build multiple units at once, streamline materials and management, and create communities that have a consistent feel.

On the construction side, small‑scale builders are picking up the slack as existing home inventory stays tight. To make the math work, many of us are leaning into lean management practices, modular or prefab components, and strategic site selection. Financing is pricier these days, so creative capital stacks and partnerships have become important.

A few things I’d love to hear from this group:

• Markets. Are you sticking to the bigger Sun Belt markets where build‑to‑rent is booming, or are you exploring secondary cities that have large pipelines of future developments?
• -For us we are currently only building in Central Arkansas but hope to expand to other parts of the state in the very near future.
• Construction hacks. Have you found modular or prefab systems that actually save time and money without sacrificing quality? How are you managing trade availability and permitting delays?
• -We have stayed with site/ stick built construction as i have not come across a more affordable option yet, although i do think pre fab makes sense in some markets where construction costs are higher.
• Financing. What kinds of financing structures are you using? Any luck combining short‑term and long‑term loans or negotiating rate buydowns?
• -We are still using commercial/ bank financing for our new construction; latest rates have been in the 7's.
• Amenities and management. What amenities or smart‑home features help you fill new rentals quickly? Are you seeing demand for green or energy‑efficient features?
• -Just been focused on affordability on infill BTR's although will be starting a larger BTR community in the near future, not a huge deal but planning on side walks on both sides of the street, not a requirement here, but will be a nice added amenity for the community.

Markets. Are you sticking to the bigger Sun Belt markets where build‑to‑rent is booming, or are you exploring secondary cities that have large pipelines of future developments?

-For us we are currently only building in Central Arkansas but hope to expand to other parts of the state in the very near future.

Construction hacks. Have you found modular or prefab systems that actually save time and money without sacrificing quality? How are you managing trade availability and permitting delays?

-We have stayed with site/ stick built construction as i have not come across a more affordable option yet, although i do think pre fab makes sense in some markets where construction costs are higher.

Financing. What kinds of financing structures are you using? Any luck combining short‑term and long‑term loans or negotiating rate buydowns?

-We are still using commercial/ bank financing for our new construction; latest rates have been in the 7's.

Amenities and management. What amenities or smart‑home features help you fill new rentals quickly? Are you seeing demand for green or energy‑efficient features?

-Just been focused on affordability on infill BTR's although will be starting a larger BTR community in the near future, not a huge deal but planning on side walks on both sides of the street, not a requirement here, but will be a nice added amenity for the community.

I’ve got my own ideas and experiences, but I’d really like to hear how others are navigating the build‑to‑rent wave. What’s working for you, and what’s not?

– Chase

Denise Supplee · Answer

Hi @Chase Calhoun,here are a few of my thoughts. For markets, secondary cities can offer strong opportunities if you can identify areas with population growth, solid rent demand, and limited new supply sometimes these outperform the bigger Sun Belt metros in ROI.

For financing, combining a short-term construction loan with a long-term takeout loan is common, and negotiating rate buydowns upfront can lower overall costs.

Regarding amenities, focusing on affordability is smart, but even small touches like well-maintained landscaping and curb appeal, modern or fresh paint colors, energy-efficient LED lighting, updated cabinet hardware, ceiling fans, good window treatments, and ample storage solutions all stand out and can help fill units faster and improve tenant satisfaction.

G. Brian Davis · Answer

Hi @Chase Calhoun

Nice to meet you. I started in real estate with buy-and-hold rentals myself, learning firsthand the challenges of dealing with tenants, maintenance, and property management. Over time, I shifted toward passive investing, partnering through my co-investing club on larger projects where I don’t have to handle day-to-day operations. This approach lets me participate in bigger deals and diversify across markets while leveraging the expertise of other members, from underwriting to property management, who pick deals apart collaboratively.

I completely understand your focus on affordability and community feel in build-to-rent; that aligns with what we often see in larger passive deals too. In terms of your questions, I’d be curious to hear how others balance financing and construction timelines, because those are the areas that often determine whether a BTR project can scale efficiently without cutting corners. Your experience in Central Arkansas could offer some great insights for secondary markets, which is something many in our club are exploring as well.

Todd Anderson · Answer

@Chase Calhoun,

Great thread.  I love to hear about others experience in the Build to rent strategy.

It sound like you are finding your way to a very successful portfolio.  Are you planning on keeping all the product that you build?  Many of the builders that I have been working with over that last number of years are doing some of both, holding a percentage and selling the rest to find the next project.

At Build 2 Rent we partner with builders around the country to market the inventory that they want to move to the over 10,000 investors that we work with.  We normally put properties on our inventory when the build gets to the 2-3 month out stage.  That way we can help find an investor that is ready to get their next investment.  the investor comes in with end financing and closes once the build receives CO.  We have been doing this for over 5 years and are working with a good number of builders in a large variety of markets.  As I stated above we also have a very large number of investors that are looking for the ease of our process.

We have found a good result with both infill builds and community builds.  The largest part of our investor base is looking for the 1-4 unit residential build to expand their portfolio.  Most of our investors are getting on average 4 units from us over a number of years.  We have also been finding institutional investors that are looking for a full community to acquire.

We have found that this is a growing part of the REI world and by the sounds of your experience, you have found the same.  It is great that you are finding a way to scale this strategy.  let me know if you may be interested in talking more about ways we could help you.

Best of luck with the newest venture.

Chase Calhoun · Answer

Thanks so much, I really appreciate that. We’d love to keep everything we’re building, and we’ll definitely be holding onto the larger subdivision we’re doing. We do keep some of the infill projects, but we’re also selling quite a few, some of which go to or through turnkey providers. Mainly, like you said, it’s just to keep feeding the machine and rolling into the next builds.

I’d love to connect and hear more about what you’re doing. It sounds like you’re essentially turnkey but focused specifically on Build-to-Rent, which is right in line with where we’re investing heavily. I’d be interested to learn more about how you’re structuring things and see if there’s a way to work together.

Looking forward to connecting.

Chase Calhoun · Answer

I completely agree, secondary markets are great, but I even like the tertiary ones like Central Arkansas and Little Rock. There’s still a lot of room for growth here, and competition is way lower than in the larger Sun Belt metros.

On the financing side, we’re taking a similar approach on our next big project — short-term construction financing with the plan to refinance into a long-term Fannie/Freddie-type takeout loan once it’s built and stabilized. That’s really the key for us, just getting it leased up and ready for that permanent debt.

For our upcoming 86-unit build-to-rent community, we’re planning to include front-yard landscape maintenance and then charge it back to tenants. It keeps the curb appeal consistent and the neighborhood looking great without driving up overall costs too much. We’re also doing LED lighting throughout, nicer cabinet hardware, and ceiling fans in every room. Nothing too over the top, but clean, modern, and durable finishes that photograph well and attract good tenants.

We’re keeping it simple on paint colors and window treatments, usually just mini blinds and adding one-car garages on this project, which I think will really stand out. On our smaller infill rentals, we typically skip the garages to keep them more affordable, but the goal is always that balance between nice and practical.

Chase Calhoun · Answer

Hey, great to meet you as well! That’s awesome that you’ve transitioned into more passive investing and co-investing, one day I hope to lean more in that direction myself. I recently partnered on a self-storage project where my team handled the construction, but my partner oversees the day-to-day operations. It’s been great to experience that more hands-off side of a deal, and honestly, I wouldn’t have taken it on otherwise.

I completely agree that build-to-rent has a ton of opportunity, especially at scale. For us, the smaller infill projects (a few duplexes or townhomes at a time) are all about speed and efficiency, just getting them built, leased, and stabilized. We’re about to start a larger BTR community with a single JV partner — 43 lots, or 86 units total. We’re securing financing for the full project upfront but plan to start with around 10 duplexes to gauge absorption. Having a three-year, interest-only construction loan gives us flexibility to ramp up or slow down depending on leasing velocity.

Weather’s usually our biggest variable, but with tight project management, internal inspections, and good software systems, we’re able to stay pretty efficient. If I can ever help your group with insight into Central Arkansas or share what’s worked for us on construction timelines and financing, I’d be happy to. It’s definitely a tertiary market, but it’s growing fast, strong job base, affordable cost of living, and a lot of migration into the area.

Ryan Arth · Answer

We have not built any BTR yet, but we are currently building out simply SFRs with SIP panels. My framer said that it shaved a day off on the walls alone. We are moving towards SIP panels for both walls and roof going forward, which should shave off more time. We also did not have to insulate, as it was already done.

We are working through approvals on six townhomes right now, and looking at SIPs, full modular, concrete panels, and stick framed. It is the test case that will inform everything going forward.

A large portion of our one development site may be our first BTR community. That site has been previously approved for 80 doors, 20% of which can be attached.

As far as amenities, we are keeping it very simple. We aim to provide additional housing units where there aren't enough, and to focus on base hits.

With financing, we are seeing the same rates that you are, but we are partnering with the landowner in many cases, which helps the capital stack.

Chase Calhoun · Answer

That’s great insight, Ryan. When I talk about build-to-rent, I use it kind of broadly, a lot of what we do are single-family new construction rentals, anywhere from one to four units on infill lots. But we’re also starting to move into full BTR communities as well.

I’ve seen SIP panels used before and would definitely be curious to see what the actual cost comparison looks like. We haven’t used them yet here in Central Arkansas, stick framing is still a lot more cost-effective just because labor’s so much cheaper and crews are easy to find. I think it’s definitely market-dependent, though.

We’ve also looked into modular, and I think it makes a lot of sense in markets where labor is expensive or where you’re trying to tighten timelines. The main issue I ran into when I looked into it last year was availability, the manufacturer I talked to had a great product but was quoting about a year out, so you really have to plan ahead.

That 80-door BTR community sounds like a great project. We’re getting ready to start something similar, 43 lots, 86 total units — and we’re structuring it to keep things simple and affordable too, but will be slightly nicer than some of the infill product we are building. main difference will be one car garages for each unit and management will provide front yard landscaping (will be charged back to tenants).  I love the “base hits” mindset; that’s exactly how we think about it as well. Partnering with landowners is an interesting angle, I’ve thought about it but haven’t come across the right opportunity yet. Definitely a smart way to strengthen the capital stack.