All Forum Posts by: Seth Weaver

A few years back, some local investors reached out to me wanting me to build a small, 3BD/2BA home in a rural part of town. I built it 10 times over about a year. By the time I made it to the last one, I knew exactly what the cost to build would be. I knew exactly what they would sell for. Furthermore, I could build the house in about 3 months from start to finish because my subs & I had built it so many times. I also knew that this house would cost the same to build in the city as it did in the rural area. The difference was that the city was pulling close to $25 more per square foot. 

So I had the product, but I didn't have the money, nor the network to scale. Fortunately, I was able to figure it out. And by figure it out, I mean barely survive after nearly going bankrupt and losing everything. Yes- I scaled and in a BIG way. I went from building 10-ish homes per year to 45-50 homes per year in just 2 years. No giant neighborhoods. No single, big $$ backers. Just by partnering with everyday strangers like yourself. 

So yes-  A major success story right?...WRONG! Back to nearly going bankrupt- One could say I was highly versed in my product, my operational capacity and my ability to secure partnerships. That wasn't the issue. The issues relied in my partnership structures and deal structures. I'm sure you've heard the phrase "High risk = High reward," which is true. However, it can also be "High risk = no reward" and that equation doesn't math well! 

Over the past few years, I have fortunately been able to, not only survive that no-reward equation above; but learn how to still scale quickly but in the right way. I've learned who/who not to partner with; how to structure the deal to where both parties are protected; and also how to make lots of $$, which is why you're reading this right now!

I think there's 2 types of people in the world: Those that listen to others advice and those that hear it but would rather learn from their own experience. Others may call them "the wise and unwise." (I'll let you guess which one I was!) So, here I am now, trying to teach others to BE WISE! 

Now, I coach & consult both aspiring builders and investors who want to get into the build-to-sell world. I show them how they can 10X their volume just like I did, while avoiding the mistakes that nearly killed my business. 

If this is something you're interested in, please send me a message and we can discuss how we may be able to help each other! 

@Jeb Durgin Send me message if you'd like to know more. I'm always connecting lenders with my builders & investors to get them building up to 50 builds/year within a couple years. You may know some people I can get in touch with! 

I'm located in Chattanooga, TN; however, I coach and consult builders & investors all over the country so that they can do the same.  

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!

Investment Info:

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

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

These pair of new construction duplexes were my first build-to-rent properties. 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 bank loan that funded 80% LTC (which the land equity covered) and started. This is in a good area and 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/issues. 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! To top this crazy story off, I was able to use bonus depreciation on the property (at this time was 100%) which allowed me to write off around $120,000 from my income that year.
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?!? Since this build, I have been doing this as much as a I can to create that generational wealth that we all hear about here on BP. You NEED to do this as well. Let me show you how!

Just finished a few deals, and now on to the next one. I have 2 options- I bought some property a year ago to build a short term rental on; however, with the talk of a possible recession coming and rent on the rise, I'm thinking it may be better to look for another multi-family deal and hold off on the STR.
If the market remains steady, the STR deal would bring in more cash flow. I just don’t know if it would hold up during a down market. 

What are your thoughts? Will a short term rental hold up during a recession? Which would you choose in this situation? 

Thanks in advance!