#Case-Study - New construction in C areas
** Lessons I Learned Following New Construction in Sea C **
Yo yo, hello everyone!
So I have been doing new construction for some time (in addition to flips) at a different area level
(C areas to Areas) and now I can say that I have conclusions I can share.
From what I was going through, I found that it was easier for me to build (assuming of course there was the right contractor) than to do some of the flips I did.
And that's because there were fewer undercurrents and overall the process was pretty straight-forward.
*** Let's start with the brakes that happened: ***
- The rise in timber prices in the United States is drastic.
- There were fears that we would not be able to sell because of the corona, etc. - it did not happen.
- We expected that the process of obtaining permits (permits) would take some time and it was not so long (less than a month).
*** Good things done: ***
- ARV inspection before construction, during construction, and at the end of construction.
The problem with new construction in non-construction areas is that I felt I was moving in the dark.
Obviously new home prices will be higher, but by how much? And would anyone be willing to pay for it at all? So we started the sale from a high enough price knowing we would have to go down in price.
- I built a garage for two cars and it's good that way! In such areas, Garag attracts full of people.
- Even though it's a new building, we did not do anything fancy (fancy fancy), because of the awareness of the neighborhood and the budget.
- I complied with the buyers' request and put vinyl flooring (LVP) in the bedrooms as well. I realized that maybe from now on it is better for me to put LVP in bedrooms as well.
*** Advantages: ***
- The construction process is faster compared to large flips, because the process is very structured and orderly and there are no manifestations of problems in the middle.
- There are almost no requirements for repairs after the buyer's inspection, and even if there are then it is minimal and simple things.
- Higher yield percentages, because in the first place I set a minimum profit margin that if it does not exist, I do not buy the plot at all.
*** Construction time + sale: ***
7 months. And that's because the municipality issued us permits really fast.
Sale Amount: 204K
Total investment amount: 135K (which is not always the amount, usually it is more)
Final return: 39%
After all, it's a little harder to sell a relatively "expensive" house in a C / C neighborhood.
Doesn't mean I stop building there, because if there is a good deal then there is a good deal, but by and large I would prefer to build in B / A areas first.
Overall this was a really good deal, and it ended faster than flips I had at the same time.
The sale was harder, but hey it's real estate and we'm used to this nonsense.
The original responses to the post can be read at the bottom of the current post page on the site or in the link to a post on Facebook and of course you are invited to join the discussion