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And assuming the fixer upper would take $75k less to finish than building a house? And assuming the investment is for rental or appreciation?
A1 - Just for appreciation? Certainly not the best investment you could make as most locations see modest appreciation when compared to S&P but there are plenty of other things that could make it a better investment than just appreciation.
Depends on costs to connect utilities I guess :-)
Mentor
Sure….I did something very similar. Can you renovate everything you want with $75k?
Neither… building a new home is a major undertaking and fixing up a home takes twice and long and costs twice as much as you think. Buying land is speculative and provides no cash flow.. what if a recession hits and there is no new development for a few years? I think it would be better to take those investment dollars and buy something decent that will provide cash flow to help cover the mortgage.
Personally, if it was me, I wouldn’t buy right now.. real estate prices are cyclical, and I would hold out a while longer to see if these recession predictions come true and then buy when no one else is buying and they think you are crazy for buying during a recession.
But, if I really felt compelled to buy something now, I would be laser focused on a particular part of town and know exactly what the most recent sales and rent trends are, and then be ready to jump on a good deal when you see it.
The good thing about real estate investments is that you can run the numbers to see what is a good investment and what is not. People buy primary homes based on emotions, access to schools, etc. whereas investment property should be purchased based on current cash flow and hopefully not on speculation about future appreciation.
Dont you pretty much need all cash for a lot vs house you can get a mortgage?