Investment Help on New Construction

Member since 2022 · 5 posts · 0 votes

Investors, I’d really love some honest opinions.

I have a new construction single-family 4 bed/2 bath in Kentucky listed at $400,000, and I’m all in at about $370,000. Holding costs are around $2,750/month, and it’s just not selling.

If this were YOUR deal, what would you do?

What would be the best strategy to make this property work if it continues not to sell? I’m open to ideas and would really appreciate hearing what other investors would do in my shoes.

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Michael Eskenasy

Investor · Pacific Northwest · Member since 2026 · 538 posts · 309 votes

1mo

At $400k with ~$370k all-in, you don’t really have a $30k cushion. Once commissions, closing costs, concessions, and another few months of $2,750 carrying costs hit, that spread can disappear fast.

If it were mine, I’d stop asking “how do I get $400k?” and ask “what is the cleanest exit from today forward?” Your original basis is sunk. The decision is now between:

taking the market-clearing price today,
offering a buyer incentive/rate buydown if that moves it faster than a price cut, or
holding/renting only if the rental economics genuinely beat the cost and risk of continuing to carry it.

I’d also look very closely at the competing new construction nearby. Builders can bury incentives in financing, upgrades, and closing costs that make their effective price much lower than the sticker price, so you may be competing against something the MLS number doesn’t show.

Andrew, if you want, send me the property and what you’re carrying for debt/expenses. I’ll tell you how I’d map the exits before you burn another few months waiting on the same strategy.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1mo
Do you have the funds to pay it off above what you are owed? What is your agent saying? To me I would try and sell because it adds to your stress and takes up too much time for you to think about it, focusing on better things you could be doing
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- Andrew Yates
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  Member since 2022 · 5 posts · 0 votes
  1mo
  Yes, we do have the funds to pay off the difference if we had to. We’ve put a lot of our own money into the build beyond the loan, which is why I’m trying to really think through the best option rather than just taking a loss and moving on.
  Our agent has been recommending staying the course, but with the market being so slow, I’m starting to wonder if there’s a better strategy we haven’t considered. I definitely agree that the time and stress are factors too, which is why I’m asking other investors what they would do in this situation.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1mo
What's the realistic rental rate? How are the neighborhood fundamentals? Reasonable expectation for meaningful appreciation in the near future?
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- Andrew Yates
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  Member since 2022 · 5 posts · 0 votes
  1mo
  I think realistically $2,500–$2,750/month for rent. It’s a new construction single-family home in a good neighborhood, and I think the fundamentals are solid. I’m just not sure I’d count on meaningful appreciation in the near future with the way the market is right now.
  That’s actually part of what I’m trying to figure out — whether it makes more sense to hold and rent it or find the cleanest way to exit while the market is slow.
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Michael Eskenasy
Investor · Pacific Northwest · Member since 2026 · 538 posts · 309 votes
1mo
At $400k with ~$370k all-in, you don’t really have a $30k cushion. Once commissions, closing costs, concessions, and another few months of $2,750 carrying costs hit, that spread can disappear fast.

If it were mine, I’d stop asking “how do I get $400k?” and ask “what is the cleanest exit from today forward?” Your original basis is sunk. The decision is now between:
1. taking the market-clearing price today,
2. offering a buyer incentive/rate buydown if that moves it faster than a price cut, or
3. holding/renting only if the rental economics genuinely beat the cost and risk of continuing to carry it.
I’d also look very closely at the competing new construction nearby. Builders can bury incentives in financing, upgrades, and closing costs that make their effective price much lower than the sticker price, so you may be competing against something the MLS number doesn’t show.

Andrew, if you want, send me the property and what you’re carrying for debt/expenses. I’ll tell you how I’d map the exits before you burn another few months waiting on the same strategy.
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- Andrew Yates
  OP
  Member since 2022 · 5 posts · 0 votes
  1mo
  Thanks, Michael. That’s exactly the kind of perspective I was hoping to get from posting this.
  We originally listed it at $439K, but the market has really tanked and it feels like no one is buying right now. We’ve dropped it to $400K.
  The loan balance is around $299K, but we’ve also put a significant amount of our own money into the build. We added a finished bonus room and several other upgrades to make the house stand out, which brought our total all-in cost to around $370K. Carrying costs are about $2,750/month.
  I’ve also considered renting it if I could get around $2,500–$2,750/month. I’d definitely be interested in hearing how you would map out the exits from here. I can send you the property info.
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Divin KanyamaBusiness Member
Accountant · Seattle, WA · Member since 2025 · 433 posts · 173 votes
1mo
@Andrew Yates If this were my deal, I’d stop thinking about the original margin and focus on limiting the burn rate. At $2,750 per month, six more months of holding costs would consume roughly $16,500 before any additional repairs, commissions, or concessions.
I’d have two or three agents who actively sell new construction in that exact submarket underwrite the exit using sold, pending, expired, and competing listings. If traffic is weak, I’d make one decisive price adjustment and relaunch rather than chase the market with small reductions.
A rate buydown or closing-cost credit makes sense only if buyers are showing but not converting. I’d also underwrite a rental exit using actual market rents and include management, vacancy, maintenance, taxes, insurance, and capital expenditures. If the property remains materially negative, renting may simply turn a short-term problem into a long-term one.
I’d compare the net loss from selling now with the projected loss from holding three to six more months and the stabilized cash flow as a rental. Then choose the exit that preserves the most capital and frees it for the next deal—even if that means taking a controlled loss.
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James WilcoxBusiness Member
Real Estate Agent · Bowling Green KY ~ Lexington, KY · Member since 2015 · 1k+ posts · 602 votes
1mo
@Andrew Yates sorry you are in this position. @Michael Eskenasy is pretty on point. Unfortunately, you may be far enough into this one that the goal needs to shift from making a profit to minimizing the loss. We are in a buyer's market so as a seller you are at their mercy. If you’re already around $370K all-in and trying to sell at $400K, there may not be much room left once you factor in all the other costs you will see at closing. Even if you had an offer today you are still another month out before you would close assuming nothing happens along the way. I’d be asking your agent a few very specific questions: What are the average days on market for homes in this price range? How many comparable homes are currently competing with yours? How many showings have you had, and what feedback are buyers giving? Have similar homes actually sold near $400K, or are they just listed there? They maybe right to stay the course but can you last that long yourself? Are you comfortable sitting on the market for several more months?
I’d also have your agent prepare a net sheet at a few realistic price points $390K, $380K, etc.—so you can see exactly what the gain/loss looks like at each level.
At the end of the day, if you’ve had reasonable market exposure and buyers still aren’t responding, the market is usually telling you something. Most often it’s price. The important thing is not to keep holding out for a number just because that’s what you need to make the deal work. Every additional month you hold it increases the amount you ultimately need to recover. I would be looking at refinance and renting options as well at this point depending on how buyer feedback is going.
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