Should I Build a Duplex Rather Than Buy?

Question

Hey everyone, me and my fiancé just very recently got engaged!!! We are planning on getting married in about a year and a half and I've somehow convinced her to house-hack for our first home haha.

A big question I've had was if it would make sense to build a duplex as our first home utilizing an FHA construction loan rather than finding one in our area. We plan on living in or right around Oxford, AL where our city's population is only around 22,000 people.
Being in a relatively smaller/medium sized city there's not a ton of residential multi-family properties in the area that aren't in dangerous locations with high amounts of crime nearby, which is leading me to wanting to build.

I can't find too much information online of people taking this approach in comparison to finding a deal on a pre-existing home and I was curious if there were reasons or reg flags for that? I understand that the cost will be higher and there won't be any opportunities to add value through renovation but I wasn't sure if those were big enough reasons to look into a different direction.

Very open to all feedback, I'd love to get any information or knowledge about why this could or could not be a good approach. Please leave any comments you think could help.

Thank you!

Bill B. · Answer

If both options are available in the same neighborhood figure out the price difference. In most situations you’ll find new is 10-50% more than existing, sometimes 100% more but rarely if ever less.

The only reason to go new would be location, personal preference, or selection.  My example would be the age/condition/neighborhoods and selection of existing Vegas SMF sucks. In MN existing 4plexes in the northern suburbs are nice brick buildings on the bus lines, in established neighborhood that are closer to- the cities than you could afford to build new.

I guess I would search your desired neighborhoods for the newest 4plexes, see if anyone is building in the last 5 years. If not, it probably doesn’t make sense. If there is, find th3 builder and talk it out.  Are there any lots for sale in your desired neighborhood or is it all built out? I think you’ll find the newer is obvious.

Kyler Wright · Answer

@Bill B. Thank you greatly for your response, I appreciate you laying out how I could go about finding if this makes sense or not.

And just to be clear, to find newly built SMF you are saying to drive through my desired neighborhoods looking if I notice any SMF properties? Which could then lead me to the builder for a further conversation correct?

I'll do some looking through these neighborhoods and get in contact with a few builders. Thank you!