For my students that have been learning from me for the past several years, they already know that you shouldn't build a piece of investment real estate until you're in a hot market. Otherwise, building will cost you more per square foot than what you can buy it for in a slump market.
And that's a complete waste of money!
The next huge money-maker is buying raw land and building, especially small multifamily buildings anywhere from "quads" (4-plexes) to 8-unit buildings.
These can make you a fortune in this market because now, in many super hot areas, it actually costs less to build than buy a fully occupied multifamily (and even commercial-commercial) property.
What's awesome about this strategy is that, once you take a piece of raw land and build, you can quickly lease the units (because they are brand new, there is a higher demand and you can get top rent dollar) but you can "flip" the property to other investors who want the leased-up high-in-demand rental property.
In fact, you'll get more money per unit than comparable buildings in the area because the units are brand new and getting more in rent than other units in the same area.
Plus, this strategy can put you into Class A and B areas whereas before you were probably only investing in (or considering) Class C and D areas because it was more affordable to get into.
I have a new lender that handles financing both raw land and the construction portion of the deal. A construction loan goes up to 1 year and then you refinance it into a conventional loan after the construction (and lease-up) has been accomplished.
Why buy a Class C property when you can buy raw land and build a Class A property that commands top dollar in both rents and cost-per-door when you flip it?
There is a specific step-by-step strategy required to make a fortune with this investment methodology. I've never taught this rare, little-known strategy to any of my students.
Even better, this lucrative strategy can be used to build any type of asset class from 8-plex multifamily buildings to a retail strip mall.
And no, you don't need to be a contractor to pull this off nor do you need to get ripped off by a GC (general contractor) in most states. As long as you know the steps, you can contract the job yourself by subbing everything out one piece at a time.
Rehab and new construction have always been my favorite method of real estate investing just because it allows you to be creative and to become part of a process in making a nice home for people. It's the one facet of real estate I enjoy the most, even down to choosing the color of the exterior paint of a building.
See you at the top!