Why Build-to-rent can be such a good play!!

[Seth Weaver]

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $550,000
Cash invested: $55,000

These pair of new construction, build-to-rent duplexes were my first build-to-rent properties. And they wouldn't be my last...

How did you find this deal and how did you negotiate it?

I'm from the area and saw it come through one of my saved searches that sends me emails each morning. They were asking $55k, which was already a good deal, so I gave them full price. I can't tell you how many times I have lost a good deal trying to be greedy over a few thousand dollars. When you see a good deal, just buy it as is. Don't risk losing it over little money.

How did you finance this deal?

I bought the land for $55K, then split the land into 2 separate lots which both appraised for $55K once we started the build ($110K total). Obtained a standard construction loan from a bank that funded 80% LTC (which the land equity covered) and started. Most banks only like to fund 70-75% but there are banks out there that will do more! Don't be afraid to try several different lenders!

How did you add value to the deal?

I am both the owner and the builder. This took me around 6 months to build. We pre-listed the units and had them all rented by the time we closed.

What was the outcome?

This is in a good area which brings good renters. Over the past 4 years, I've had 2 units sit vacant for around 3 months total. Since it is new construction, I have had ZERO maintenance costs. Another great benefit of new construction is the equity you get as soon as you are finished. This project cost me $550,000 to build but appraised for $850,000 when it was finished. That's $300,000 of INSTANT equity! Furthermore, I was able to use 100% cost depreciation to write $120,000 from my income.

Lessons learned? Challenges?

Investors: YOU can be part of a deal like this as well. You just need: 1) the right builder & 2)To know how to structure your partnership. Since this project, I have partnered with several investors and used those partnerships to grow both my wealth and theirs. I know the good and the bad. Let me show you how!

Builders: What are you doing with the money you make?!? Let me show you how to be smart with your profits and turn this into a volume based strategy!