So I have currently been working with a relator in my area on finding a duplex for my wife and I to buy as our first home/first investment. I think this is a great way to get "my feet wet" in REI.
My question is mainly focused on price. Originally we were going to purchase a home first before I started investing but I feel it would be best to buy and live in my investment first. I was planning on spending anywhere from $175,000 to $250,000 for our first home (with 20% down). My relator told me about some land in Raymore area (for those of you familiar with Kansas City) where a builder will build brand new duplexes for $229K.
Do you all think it is wise to spend that much for my first home/investment or should I look more into a live in flip at a cheaper price? My plan would be to live in the duplex for a year or two then buy my wife and I are actual home.
Thank you all in advance for the advice!
While new construction does have an appeal, it also comes with some risks. The big 3 are overbuilding, poor build quality and less than desirable locations.
Are they in a desirable area? Would they cash flow as rentals with conservative projections including management/cap ex and repairs?
If I was having a duplex built for an investment, I would deliberately make the units different. I would have one as a pretty much bare bones unit and the other with some added "wow factor" items that would command higher rents and increase interest. This way you are at least covered initially if the market is very price conscious or amenities conscious.
One thing you may consider with having an investment property built is looking for areas where you can improve on "builder grade" that will make an impact, but not break the bank. If you have the builder do upgrades be sure to negotiate on price - the mark up can be very significant.
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