BuyRRRR or BuildRRR? Better to buy or build?
Ok so Im finally about to close on a $115k HELOC, and on top of that I have about 30k of my own cash ready. So my guns are just about loaded and I originally had my sights set on a BRRRR strategy with a focus on 3/2 SFR. In the area I will be investing in the average ARV for a 3/2 is between 165k and 240k. I was planning on going with sec 8 in which market rents for a 3/2 is $1600... This was my plan and then my friend tells me I can build a 3/2 for $150k (permits and all). There are many 1/4 acre lots available for as low as 10k + price to clear is about 10k. Add to that 5k closing and misc costs and your all in for about 175k to 185k. The value for brand new 3/2's here are between 220k to 240k. I'm thinking I could rent out a brand new house to get a top tenant, refinance 80% to 75% LTV to get all or almost all of my money back and then do it again... This is what I call the BRRR, with only 3 R's because there is no rehab... or I guess you could call it the BuildRRR or the BuRRR or whatever...
I want to know what you guys think? What are the pros and cons you've experienced in building investment properties? Which strategy do you think I should choose: BRRRR or BuRRR and why? Any and all comments are appreciated 👍😊👍!