Building New Construction Rental Properties – Episode 730

If you’ve been following me for a while, you might have noticed that our company’s strategy has shifted over the past few years. While we used to focus on rehabbing rental properties, now our business is almost exclusively based around building new construction rental properties.

On this episode of Investing in Real Estate, I’m going to share why our company pivoted from rehabbing rental properties, to almost exclusively building new construction rental properties. You’re going to learn the three main reasons why I love new construction rental properties, and why this shift in our business model has allowed us to better serve our clients.

More About This Show

1. New construction properties allow us to offer all types of financing. Whether you want to buy with cash, use retirement funds, or use non-recourse financing, we are able to work with you on new construction rental properties. Think about that for a moment: non-recourse financing on a new construction property! It’s a no-brainer. The banks have analyzed our new construction properties have offered to finance them to you the investor. That means that not only do they pass our standards, but the bank’s as well.
2. Most importantly, we are now able to work with investors who want to use conventional financing. Look, mortgage interest rates are at a record low, making conventional financing a great option for growing a rental portfolio. Accepting conventional financing allows us to serve more investors than ever before.
3. Investing in new construction allows you to lower the number of doors you would need to reach your Freedom Number. As an investor, it’s important to look at the long-term strategy. Cheaper rehabbed properties usually mean a larger percentage of cash up-front, and more repairs throughout the life of the investment. With new construction, you don’t have to worry about coming up with the funds for costly repairs because all of the main components of the house are brand new. And once the rental income pays down your loan, you get to pocket the total amount, thus lowering the overall amount of doors needed.

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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.

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