All Forum Posts by: Derek Hand

Depends where on N. Penn. It's a very busy street. A place fixed up, in a safer neighborhood etc. can sell for 350k or so. I'd visit during the winter once if you haven't yet - be prepared for the Midwest gloom and the winter months. 

This is where my focus is. I can build cheaper than buying similar, no unknown issues as I perform most of the work, and have 12%-16% CoC returns a year after completion. Not to mention if you are building in areas that need rentals, city governments have grants and/or tax abatements that can apply that make the numbers all the better - or will help push through rezoning efforts for larger projects.

I've grouped mine into a holding company and an LLC for each parcel that I am developing (currently 4). Parcel A will have 32 doors, B will have 53 doors, C will have 30 doors and D will have 13 doors. Each LLC will have its own bank account and this way I can scale the business appropriately while keeping everything organized as I scale.

 The city I am in is attempting to achieve 300+ new units in the next 3 years and offering quite a few incentives. I've never had an issue getting a good renter as the units in the area are pretty run down. 

It depends if each unit is wired independently of each other. If they are, this makes things easier as you have options. If you don't want the headache of keeping track yourself, you are looking at several 7-9k on Oahu to start (former Big Island resident myself). If you need to separate the units wiring, that will get expensive fast, especially if it is a single wall construction house. There are few people that will even touch them anymore. 

I prefer smaller for my area as the rent increase for a 3/2 makes it harder to justify the added cost for me. Not many will pay that much more in my area for the additional room. 

I have been building and holding without involvement of banks. Currently, I have no plan to sell and will hold at least until the entire property is developed. Then I may consider selling, but by that time, I will have 132 units built. 

Depends where you are. Where I am in Iowa, I can build a 2bd, 1 bath duplex, ~1000 sqft, separate utilities etc. and have less than 200k into the build. Each unit renting out for $1200/month. 

I am doing new building in South East Iowa. They are currently penciling in at ~12%-14%. This is with me doing a large portion of the labor to decrease the overall build price in order to keep loan amounts reasonable. 

I am currently investing in South East Iowa by developing 8-plex's on a property that I own. I have a background in construction though, so I am able to save a significant amount on labor costs. 

I am investing out of my home state for a couple of reasons, 

1) I have family in the area that can assist if need be

2) Land is much more affordable

3) I will be moving there within the next 5 years - once I have my first units built to where building the next 8-plex will be my full time job.

Sure, I won't get near the rents as I would in Colorado, but I also won't have near the expenses. At this stage in my investments, I wouldn't invest out of state without family/friends that can help support. But once I have my land developed, this becomes a little different as there will be 100+ doors that will help pave the way for the next development.