Categories: Podcast

102 -Developing Homes Out of State for Infinite Returns with Jess White

Synopsis

Jess is an investor in the Bay Area who builds new construction homes in Texas. With his strategy, he’s able to purchase vacant lots and build new, cash-flowing homes with almost no money down. If you’re interested in building new homes out of state, stay tuned to figure out how it’s done.

Key points

From Financial Disaster To Real Estate Investor

Jess starts the episode by recounting how he was not in a really great shape when it comes to finances. But everything changed when he met his cousin and told him about real estate investing, specifically developing homes. His cousin was also the one who encouraged him to read the book “Rich Dad, Poor Dad”. This pushed him to put first his finances in order. He went from “buying things to buying assets”. His finances eventually improved from being a total wreck.

Starting Out Developing Homes

Jeff started a job in the Bay Area. After earning a decent amount of money, he thought that he can already invest. What he found out, however, is that it’s really expensive to invest in the area. So he started looking in his hometown in Texas. This time, he can afford the properties but can’t find interesting ones that will profit him. What he did then was to invest by building homes on his own with the help of his dad.

On His First Developing Journey

Jess shares the process he went through in building his first investment property. The first thing he did was to get a house plan. Then he looked for a lot to build on, contacted the lot owners, processed the paperwork, and visited the local credit union for financing. Jeff found an opportunity to develop homes on a lot in an area where there are no good rentals.

Making The Most Of Interest-Only Loans

What’s good about interest-only loans is you can already earn through rentals while you’re still just paying interest. So the goal is to build houses as quickly as possible so you can maximize the time and rent it out within the interest-only period as long as possible.

Land Takes The Big Chunk Of The Budget

Jeff reminds the listeners that the most expensive part of the process is the purchase of the land. He advises that it will help a lot if you can get land for an affordable price as there’s only so much wiggle room when it comes to the actual home development process. The most expensive part of the construction process, however, is the framing.

Advice For Those Who Doesn’t Have Their Own Crew

Jeff and his dad don’t have their own team of builders but still was able to do well in new constructions. He encourages the listeners to find and leverage people to help them in developing homes. These are people who are not super established but not a complete newbie either. It’s a win for them since they will earn while having no money going in it like usual.

Jeff’s Criteria In Finding A Place To Invest In

He shares that his main criteria are the potential of cash flow, areas that have affordable lots and schools with a good reputation. As he said, people pay more for a house just because of the schools near the property.

Get Started Early

If he’ll do it again, Jeff would’ve started sooner, even though it’s fairly soon. For him jumping in there and making the mistakes sooner is worth it to learn and be more successful. He advises not to be afraid of your first deal. Don’t waste time not reading books and not being with positive people who are driven.