Making Multifamily Money - Aug 7th 2025

Real Estate Updates

I am trying to do a NEW CONSTRUCTION BRRR (Buy-Rent-Refinance-Repeat) with no renovations. If this works, I plan on recycling my capital to buy one every 3 months.

How does this work? National home builders are getting desperate. They need to off load inventory to meet quarterly/annual quotas for their shareholders (think Lennar & DR Horton) so you can get a “significant” discount if you pay using “cash.”

This house was originally $317,000 (4bed/2bath, 2100sqft) with a $22,000 quarter end discount. Since I am offering “cash” (remember, this can be a HELOC, LOC, or cash if you have it) and can close quickly before quarter end, they are giving me an additional $38,000 discount for a final price of $256,000 cash (20% discount which is close to a 75% cash out refinance)

I expect this house to appraise for $320,000 (usually new construction appraises higher than original purchase price) since there are recent sale comps within this new build community.

Lenders typically want a 3-6 month seasoning period to honor the appraised value, but some lenders do not need a seasoning period (higher interest rate if so).

Let’s do some math…

• $320,000 appraised value x 0.75 = $240,000 cash out refinance ($16,000 left in the deal)

• $240,000 @ 7% interest / 30 year fixed = $1,600/month

• Property tax + HOA + Insurance = $200/month

• Expected rents $2,150/month

• DSCR = $2,150/$1,800 = ~1.2

• PM = 10% = $210

• Total net cash flow = $140/month (breakeven if you factor in capex, vacancy, etc)

I am able to buy a new construction property leaving very little money in the deal, get almost 65k of instant equity, and have a break even cash flow deal despite higher interest rates.

This is the new construction BRRR with zero renovations and I can pull out the cash within 30-45 days of closing if I wanted to if I am using the lender ok with no seasoning.

I should be closing in about 1 week and waiting for the property to get rented out. Once rented out, I will engage DSCR lenders because I am looking to buy again using recycled capital.

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