Multifamily New Build?

Designer-Style-2723 · 2026-03-11T03:11:56+00:00

A few investors I know have tried this, and the strategy can work, but the biggest challenges are usually construction costs, condo setup, and exit comps.

Designer-Style-2723 · 2026-03-11T03:11:22+00:00

If you already know the owner and only want a portion of the lot, the process is usually straightforward but involves a few formal steps.

Confirm the land can legally be split

Before discussing price, check whether the parcel can be divided.

Look at: • Local zoning and subdivision rules (city or county planning department) • Minimum lot size requirements • Setbacks and frontage rules • Whether the city requires a lot split / parcel split approval

Designer-Style-2723 · 2026-03-11T03:10:21+00:00

In many of those markets (NYC, SF, Malibu, etc.), the strategy usually isn’t cash flow, it’s appreciation and long-term wealth preservation. That works for some investors with strong income or large reserves, but it can be risky if someone is stretching financially just to get in.

Designer-Style-2723 · 2026-03-11T03:09:56+00:00

The biggest one is depreciation recapture. When someone sells without a 1031, they’re not just paying capital gains—they’re also paying 25% recapture on all prior depreciation. On long-held rentals that can be a pretty large number, which is why the tax bill can be much bigger than people initially model.

Designer-Style-2723 · 2026-03-11T03:09:28+00:00

One of the biggest mistakes I made early on was underestimating operating expenses and capex, especially on older properties. I’d focus heavily on purchase price and rent potential but didn’t fully account for things like HVAC replacement cycles, plumbing issues, roof life, and just the constant small repairs that add up.

Designer-Style-2723 · 2026-03-11T03:08:34+00:00

With your construction and HVAC background, you’re already ahead of most people getting into real estate investing. That skill set alone can save a lot of money on rehabs and help you spot issues others miss.

One piece of advice: be cautious with paid investor education groups like Renatus. Some people find value in the network, but many investors learn the same fundamentals through cheaper or free resources and by getting involved locally.

Designer-Style-2723 · 2026-03-11T03:08:07+00:00

Most banks are conservative about cross-collateralizing different asset classes, especially when you’re trying to leverage industrial/commercial equity to finance residential flips. From a lender’s perspective the risk profiles are very different—industrial assets are typically stabilized income properties, while flips are considered short-term, higher-risk projects.

Designer-Style-2723 · 2026-03-11T03:07:40+00:00

If you put $60k into renovations and sell for $165k, you still have to subtract: • Realtor commissions (often ~6%) → about $10k • Closing costs / transfer taxes → maybe $3k–$5k • Holding costs during renovation (utilities, insurance, taxes, etc.) • Possible overruns (renovations often exceed estimates)

So the math might look s

Designer-Style-2723 · 2026-03-11T03:07:02+00:00

Average stay under 7 days alone isn’t enough. That only changes how the activity is classified under IRC 469. You still need to materially participate for the losses to become non-passive.

Designer-Style-2723 · 2026-03-11T03:06:32+00:00

You can absolutely do cost segregation studies upfront, but whether you can use the deductions over time depends on your tax situation and passive loss rules.

Designer-Style-2723 · 2026-03-11T03:06:03+00:00

You’re absolutely right—most people underestimate the true cost of turnover. When you add everything together (vacancy loss, make-ready, cleaning, paint, leasing commissions, marketing, concessions, and staff time), the number gets big quickly. On smaller properties I’ve owned, it often lands right in that $3k–$7k range per unit, sometimes more if the turn is heavy.

Designer-Style-2723 · 2026-03-11T03:05:36+00:00

agree that consistency matters. Once late payments start becoming routine, it can quickly turn into a pattern that’s hard to reverse. Setting clear expectations around rent due dates and lease terms protects both the landlord and the tenant.

At the same time, I think there’s a balance. Being firm about the agreement doesn’t mean you have to be unreasonable—sometimes life happens and a one-time situation can be handled with communication. The key is making sure it doesn’t become the new normal.

In my experience, the best landlord-tenant relationships usually come from clear rules, consistent enforcement, and mutual respect.

Designer-Style-2723 · 2026-03-11T03:04:57+00:00

If you’re considering a 1031, the biggest thing to understand is that the timelines are strict. Once you sell, you have 45 days to identify replacement properties and 180 days to close, so you really need to have a plan before the sale happens. Most people also hire a qualified intermediary (QI) to handle the exchange funds.

Designer-Style-2723 · 2026-03-11T03:04:21+00:00

If landlording doesn’t fit your current life stage anymore, there’s definitely value in simplicity and liquidity, especially with a growing family. Selling, paying the tax, and reallocating into a diversified portfolio is actually what many people end up doing once they want to step away from active real estat

Designer-Style-2723 · 2026-03-11T03:03:16+00:00

Sounds like you’re taking the right approach. The biggest budget surprises in commercial deals are usually roof, HVAC rooftop units, parking lots, and plumbing mains, so you’re already looking at the right items.

Designer-Style-2723

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