Residential Development Opportunities in Florida
Residential Development Opportunities in Florida
This post will go over the different projects we do within residential real estate construction. We buy infill lots*, build a property on them and sell or rent them. Each type of project has unique qualities, strengths, and weaknesses.
1 unit -Single Family Residence (SFR)
2 unit - Duplex
4 unit - Fourplex
*Infill lots are in pre-existing neighborhoods, usually with no HOA.
FHA Opportunities
One thing we like about the properties we build is that they all qualify for FHA loans. The FHA program is designed for first-time home buyers, and they accept a low down payment of 3.5%. This gives us a very large pool of buyers looking for their first home or looking to house hack**.
** House hacking refers to buying a multi-unit property, living in one unit, and renting out the other unit(s)
Types of properties that we are building:
1 unit -Single Family Residence
We build mostly single-family homes because they are the easiest to buy and build in bulk. Many people are looking to buy an affordable home, and recently, there has been high demand from investors looking to rent out single-family homes.
Floorplans
1000 sqft: 3/2 home Geared towards a refinance and rent exit
Better as a rental, with less upside but easier and faster to finish.
1270 sqft: 3/2 home Geared towards a hybrid exit
In the middle, good upside and good profit margin.
1600 sqft: 4/2 home Geared towards a sales exit
Better as a sale. Most profit margin but hardest to rent in our markets.
Advantages
Cheapest and fastest to build.
Disadvantages
Fewer units as rentals, so you can't get multiple rentals off one build. More expensive homes can also become challenging to sell depending on the market.
Feasibility
Many residential lots are available in most markets. They are the easiest to get a permit approved by the county.
2 unit - Duplex
Duplexes give us the best ROI due to their versatility. They are suitable for investors to buy and rent out —new homeowners like them due to their low price point and ability to house hack.
Floorplans
Regular: Two 3/2 units
W/ Garage: Two 3/2 units; bigger model, more expensive to build but may be required or more profitable in some markets
Advantages
Great versatility as a rental but also suitable for homeowners due to the house hacking option.
Disadvantages
Lots are not readily available.
Feasibility
Certain markets have more inventory than others, but generally, there are few duplex-zoned areas. The permits for duplexes are a bit harder to obtain than for single-family homes.
4 unit - Fourplex
Fourplexes are the best bang for your buck regarding cash flow. It is a great asset for an investor and a homeowner alike. This property type is a bit more expensive than the others but for those that can afford it is great as a house hack or as a cash-flowing asset due to the increased number of units.
Floorplans
Regular: We currently only offer one style of a fourplex, which is a single-story building with two 3/2 units and two 2/2 units
Advantages
Highest unit for a residential property. It is great for investors and qualifies for FHA, making it accessible to homeowners.
Disadvantages
Lots are more scarce and expensive to build. The permitting process and building requirements are also more stringent.
Feasibility
The land with zoning for these buildings is hard to find. Generally, you can build more than four units unless you have a small lot, but then you have to choose if you want to build a residential or commercial property (>4 units) where the financing will differ.
Zoning
The type of construction we do will highly depend on the zoning. Different counties have different zoning restrictions. For example, most counties have an abundance of single-family lots, so that is what we mainly build. In certain counties, there are a lot of SFR, but there are also many duplex lots. We get better ROI on duplexes, so we exclusively build them in those areas.
INTERESTED IN BUILDING YOUR REAL ESTATE PORTFOLIO?
If you are interested in learning how to build projects like these or want us to build them for you, please contact Ivan at officeadanordonez@gmail.com and ask for our “Substack subscriber” new construction deals.