Jumping into New Construction

Mike Hambright (00:00.64)
Hey everybody, welcome back to the show. Today I’m here with Terry Thayer and we’re gonna be talking about jumping in to new construction. Terry’s been rehabbing for quite some time, has a lot of experience here. It’s gonna be a great show, so listen up. Terry, what’s up buddy, how are you?

Terry (00:13.601)
I am good, how are you doing?

Mike Hambright (00:15.136)
Good, Excited to talk about this. There’s a lot of people that have transitioned into, from rehab. I know a lot of people that have done rehabbing and they’ve kind of moved into new construction and they like the fact that they can control it and they can put out pretty houses and they’ve got a little bit more control over what they’re building versus just taking the bones of an old house and fixing it up and stuff. I’m sure we’re gonna talk about.

All that stuff today, but before we jump in, you have a ton of experience doing this. Maybe kind of tell us like how you got started and then a little bit about what your business looks like today.

Terry (00:41.824)
yeah.

Terry (00:49.518)
Got it. Okay. The short version is I grew up in this business. is, mean, construction is all I know. Second generation carpenter. My father was a carpenter, worked with him, you know, since I was young, moved to North Carolina from New York 30 years ago. And, you he was in more, he, when he moved to North Carolina more in the siding business, I worked with him from 95 to 2000. Basically, you know, I wanted more. I didn’t want to work for somebody.

And gave me a lot of experience. When I left there, had 250 guys under me. It was a big company. And basically said, look, make me a partner, pay me a whole lot more, I’m out. And he didn’t do the first two, so I left. But I always had this desire, like, we’re working for all these builders. I always wanted to be the builder. But I didn’t know the path of how to get there. So for the next two, three years, I was doing renovations for people, kitchens, bathrooms, such.

Mike Hambright (01:32.576)
you

Terry (01:48.334)
trying to figure out my foot into the business, started, you know, meeting with some people, some builders that are, that have been doing it, gave me some tips on how to get started. And in 2003, that’s what I did. So I’ve been now 20, what is that? 23, 24 years, something like that. Or 22, if I can’t do math, whatever, 20 something years, I’ve been building houses, building new construction. And you know, basically,

Mike Hambright (02:06.144)
Yeah.

Terry (02:17.198)
You talked about in the beginning, a lot of people going from flipping to building new. Well, for some weird reason, I was building new and wanted to also get into flipping. But I learned very quickly that that is not where I want to go. It just seems like a major waste of time when you know how to build new construction in comparison. The profit margins aren’t nearly as good. It’s so much more difficult to flip houses than it is to build new construction. And yeah, so gone through all these different transitions.

had a wholesale in operation, shut that down. And now we only focus on building new construction and coaching new construction.

Mike Hambright (02:53.94)
Yeah, yeah, yeah. So you have a little bit of experience with rehab. I mean, obviously you could probably do with your eyes closed, but in terms of a business model. So maybe just kind of share some of the benefits from the way you see it of rehabbing. And I’ve fixed and flipped hundreds of houses here. And so it’s one of those things where I say, I love what it’s done for me, but I didn’t necessarily love it. All right. I kind of said that about real estate. mean, real estate is kind of the thing that helps me get the thing, but it’s not, I’ve kind of fallen out of love with real estate.

Terry (03:07.726)
Okay.

Mike Hambright (03:23.304)
even though this is a real estate show, I’m still a real estate investor in many, ways. But just talk about the pros and cons of, as you see it, rehabbing versus new construction.

Terry (03:34.892)
Yeah, I mean, a couple things are one of the things that I mentioned is profit margins. Like I think, yeah, you’re gonna, you’re gonna be able to do, I probably flipped about a hundred houses over a course of about 10 years. That wasn’t my main focus. It was always new construction. But you have a lot more time invested into a flip. And there’s so many unpredictable things that can happen in a flip where you’re, I mean, I’ll give you an example. I just flipped the house. The last one I flipped was about,

I don’t know, about six, eight months ago, something I thought I was, you know, a couple of deals came to me and it was a double wide. Like there’s not much that I can walk into. There’s not the whole, tear this up and rot and all that. Like you can’t get that past me. I’ve built enough houses that no one understand the whole thing that I can’t, you can’t get that past me, right? But I mean, even the craziest things come up, like in this particular house, we get down to the end.

HVAC system was good, got everything checked out before I finished. Just before, right after we closed on the property, HVAC system ceases. They go over there. It’s gonna cost me more to fix it than to replace it. And I’m just like, what the hell? So I’ve got, you know, eight grand, whatever it was, seven grand that wasn’t expected. It was dry, a speck of rain the whole time we flipped this thing. We get down to the end and nothing but rain.

just as soon as we list it just starts pouring trench of downpours. Water’s getting up underneath, you know, and we put a brick foundation on this thing. So we put a brick block foundation on this thing. Water’s getting in there. We go back in, fix the waterproofing and all that, still getting in. Comes out, comes find out this thing’s got like an underground spring underneath this house. And it’s like, no. So then I ended up, I ended up another 10 grand costing me to

Mike Hambright (05:22.451)
wow.

Terry (05:28.238)
do something to divert this water, to get it into a pump, to get it out and get it away from the house and make it so it was just like, those are things that doesn’t matter how much experience you have. There’s no way you’re going to know. But I don’t know, new construction, it’s like it’s so, so much easier. Like you’re building out everything on paper. The majority of a build is done in all of us. You’re building everything out on paper. You’re getting your architecture, your engineering, your design, your selections, your pricing everything out.

You’ve got everything. It’s like how this is how I describe it a lot of times. Like you take a 5,000 piece Lego set, you throw it on the ground in front of somebody and say, okay, build this thing. It’s going to be hard to build it, right? But now if I give you the instruction manual, it says, okay, step one, step two, step three, put this color here, put this, that’s, that’s building new construction. If you’re doing it the right way, everything’s pre-planned.

Mike Hambright (06:13.578)
Yeah.

Mike Hambright (06:17.514)
Yeah. Dude, I use that analogy of Legos and the instruction manual all the time. So that’s hilarious that you said that. Yeah, because my son was like really into Legos. And I just talk about like, I usually like, you know, when you get the instruction, you can build the Millennium Falcon. But when those pieces all end up in a big bucket with like.

Terry (06:23.852)
Do you?

Mike Hambright (06:35.296)
500 other sets like you there’s you’re never gonna put that back together and I kind of give the analogy of like well Really with real estate kind of coaching and stuff too is like hey the information is all out there But good luck putting it together unless you’re working with somebody that’s put together the manual for you, you know Yeah, that’s funny

Terry (06:48.756)
Exactly, exactly.

Mike Hambright (06:52.023)
And I guess the other thing about new construction, I mean, I suspect we’ll get into this a little bit, but you have a few different designs that you probably stick with. that fair to say? mean, versus like a house where you never know what you don’t know what’s behind the wall. You don’t know what you’re getting into. You kind of know everything about a house when you build it, right?

Terry (07:01.642)
No.

Terry (07:11.276)
Yeah, when you say designs, you saying like color selections or house plans?

Mike Hambright (07:14.494)
Well, like, you know, overall design of the layout of the property and stuff like that. Are you doing are you doing like, you know, I guess you could do custom homes, but a lot of builders actually talk to somebody else who was on a podcast recently. And he’s like, I’ve got, you know, he’s doing builder rent type stuff primarily, which I know we’re going to talk about today. But he’s like, I’ve got like four or five floor plans that we just kind of do over and over and over again. Is that your model or you tend to do more more variety?

Terry (07:22.008)
health plans.

Terry (07:41.462)
No, we do a lot more variety. So it just depends. Like I’ve got 10 build the rents that I’m getting ready to start. And let’s see, eight of them are the exact same floor plan. No, sorry. Six of the exact same floor plan. And then I’ve got four in the front just because of the lots. They’re a little bit different size. So I had to make something custom for those lots. You know, we do a lot of infills. So it’s not, I’m not very, you know, plug and play and type of thing. So then.

Mike Hambright (07:43.498)
Yeah.

Mike Hambright (08:02.708)
Yeah.

Terry (08:10.178)
that, you know, those, those are my build a rent. So I’ve got 11 that I’m building right now. where we, I do have, those are pretty similar. We change up the elevations, but then we’ve got some custom million dollar homes that we’re building and every single one of those are a different plan every time.

Mike Hambright (08:26.378)
Yeah, yeah, yeah, that’s great. So let’s talk about the kind of the experience needed. somebody clearly does not need to be have the experience as a rehabber to get in to this. You had a lot of experience in trades and stuff like that before you kind of got started, right? But what I guess people could come from just about anywhere. They don’t necessarily need a lot of experience. You have the ability to kind of learn all those things to jump in, right?

Terry (08:50.03)
100%. Yeah, it’s like you need drive and determination. Like I can give you all the information as long as you take that information and put it to use and actually implement it. You’re there. There’s a step by step by step process to follow. Are you going to become a builder over time? Heck yeah. You’re going to become more experienced. You’re going to learn a lot of a lot of different tricks and trades. It’s going to become unconscious consciousness over time. So so yes, you’re going to become better, but anybody can build.

right off of the bat. We’ve got people in the program that have been flipping, wholesaling, never built or flipped anything or did anything with construction whatsoever. Realtors in a group, have, you know, people that have nothing to do with real estate that just came into the group because they just want to be a builder.

Mike Hambright (09:36.956)
cool. let’s, so you don’t really need to have, are there, I mean it is probably fairly common that somebody is moving from being an active real estate investor or rehabber or wholesaler and moving into doing this. I suspect that’s, I mean I know several people that have done that over the past couple years just because they couldn’t find enough inventory to fix and flip or they got tired of you know the lack of control or whatever. So that is a pretty common scenario of people that were rehabbers moving into this space I assume.

Terry (10:05.09)
Yeah, I think it’s become like the next sexiest thing to do is like, let’s build new construction. The problem with that is that so many people are doing this wrong. In my opinion, is going to come back and bite them. And I just I like I pray so so much that that people just start doing it the right way. What I mean by that is when you’re fixing and flipping, you typically you have a contractor or sometimes multiple contractors that

Mike Hambright (10:08.186)
Right. Yeah.

Terry (10:33.3)
are coming and doing the work and you’re just finding the deals and they’re flipping the property or creating a scope of work and all that. In new construction, you want to become the GC. And I think a lot of people’s misconception is the word GC. They think that that means that you have to be this tradesman. You have to have all this experience. You have to know how to build something. And none of that is true whatsoever. The GC just is the person that

goes and pulls the permits that puts the, you’re basically when you’re handed over to a GC, you’re basically everything except for the person pulling the permits and the project manager, which that’s another thing. Like I see so many people like, yeah, I’m gonna partner up with this person and do 50-50 profits with this person because they know how to build the house. I’m like, so you’re basically giving 50 % to a project manager. They don’t know how to find the deals, how to finance the deals.

how to put in, do anything, all they are is a project manager and you’re gonna give 50%, you’re gonna give 20 % of the work, you’re gonna give that person 50%. So it’s like, it’s just a lot of misconceptions with new construction, you know, versus the rehab side.

Mike Hambright (11:45.12)
So do you have to be, I mean talk about that role a little bit more as like a GC, like what do you have to do as a builder? what do you, I guess you could start from anywhere, but what’s your primary role as a builder?

Terry (12:01.026)
Yeah, okay. So first and foremost, depending on the state you’re in, you have to become licensed. I think Texas, you don’t have to have a license in Texas, is that right?

Mike Hambright (12:09.394)
I’m not sure. I don’t know that it is still a little more of the Wild West here generally, but yeah, yeah.

Terry (12:12.238)
I like I heard that. Literally. I’ve heard that. I don’t know if that’s true. I’ve never really checked that out. But like in the state of North Carolina, I have to get a license. It’s very difficult, very difficult. It’s very easy in North Carolina to get a license. Basically, there’s a seminar you go, you can go to, get some books, you study them, you pass a test, you have an application, you have to show some financials. Very easy. Other states are a little bit more difficult. So what is the actual

Mike Hambright (12:39.402)
And you’re licensed as not a builder, you’re licensed as a contractor or what is the? Yeah, yeah.

Terry (12:44.328)
Licensed general contractor that allows you to build houses like like in our state. You can’t build anything over 30 or $40,000 without becoming a licensed general contractor so I can build like a shed or a garage. Yeah, exactly. If I build anything bigger or I do larger innovations, I have to be a licensed general contractor. And so like, what are the roles like the light? The general contractor is basically a real estate investor.

Mike Hambright (12:56.158)
Okay. You could be a handyman, but you can’t be a… Yeah.

Terry (13:13.72)
We find money, we put the deals together, we find lots, get, you know, create the architecture, the design, the selections, you know, kind of put together the vision on paper to put it out in field to actually build it. And then you’re the one ultimately responsible for the build, but if you hire the right people, you have to hire licensed trades for different things too.

Mike Hambright (13:39.872)
Sure, yeah, yeah, yeah. And are you building, I mean, guess you could do anything, but is your focus on, you know, from high-end luxury to entry-level price point houses? Like, what’s kind of your sweet spot, or what do you teach people? Is it to kind of stay around the median price point in the marketplace, so there’s a lot of demand, or is it like high-end stuff, or what does that look like?

Terry (14:00.938)
Yeah, I think that people should probably stay around median to start off with get comfortable. You know, it’s a it’s a big boy game. You can win and lose a lot of money in this game. So you want to make sure that you understand the product, how to build the basics before you start getting into luxury. If you feel comfortable luxury, go with luxury. I it’s not that much of a difference. You just want to make sure that you’re building a good solid product because.

The luxury buyers are a little bit more experienced, a little more savvy and they know what they’re looking for. Yeah. So I’ve seen, I usually say like a little like median price range is, is typically your track, your national builders, right? That’s what they’re building. It’s almost impossible to build median price work because you can’t buy the deep, the dirt cheap enough. You can’t build cheaper than what they can build. So like, for example, here median, I think is right around 400, a little more than 400.

Mike Hambright (14:30.504)
Yeah, yeah. So let’s…

Terry (14:56.494)
I would say like a good solid product for a builder like myself would be like 650,000. Somewhere between like that 550 and 800,000 is a good place to start and play in, in my market.

Mike Hambright (15:09.792)
Yeah. So let’s talk about, you kind of said a couple of things as a GC, the role is finding lots and finding money. So let’s go, I want to talk about both of those, but let’s go into lots first. So in fill lots. And for those that don’t know, those are just like, there was a development there and there’s a couple of lots that are still around and you’re just going into an existing development and, know.

Are they, were they always never built on? mean, I guess you could scrape houses and stuff like that. Maybe not. That’s probably a little bit harder at that price point is my guess, but like, how do you find lots and what as an owner, like how, cause these are, you can’t, you can’t build if you can’t find a lot. So how do you find the lots?

Terry (15:36.844)
Yo.

Terry (15:48.674)
Yes, I mean, a lot of people, they’ll do marketing for lots or whatever, especially for infill stuff or tear down new builds and such. You could buy from wholesalers and I’ve bought from wholesalers. I’ve done marketing for deals. But honestly, like I’ve got a really easy way of finding deals. I have no problem finding deals. I turn away more deals that come my way than I turn away.

away so many deals because I just can’t handle all the stuff that comes to me. so occasionally a wholesaler bring me something that I’ll be like, yeah, this makes sense just because they don’t know what they’re looking at. For example, just before we started recording, I have a build a rent product. I’m building 10 houses on there. There was one house and this is kind of in a downtown area. believe it’s like 0.7, point almost 0.8 acres. So not very big.

and we’re putting 10 houses on it. So I made, turned it, I turned that one lot into five lots and then I could put a primary with an ADU on each one of them and I’m renting it. And so the way we laid it out, it works very well and we’re finishing up our architecture, final architecture. We’ll go into permits, start building them here in about two months.

Mike Hambright (17:02.912)
Yeah, that’s cool. And in a deal like that, like are there some zoning issues you have to get changed? mean, is it you kind of once you do this a little bit, you kind of know how to how to play the game, right? But it’s probably not not everybody would know how to go turn one lot into 10 lots.

Terry (17:13.612)
Yes, I don’t

Terry (17:17.806)
Right, you have to learn it obviously and just give you a quick high level view on that is I don’t look to change zoning. Zoning is, mean, that’s a longer game. I mean, that could take, that could sometimes take six months, it could take years to do and it could be a 50-50 toss up, toss up whether you actually get it. There’s a lot that goes into zoning change. So what I do is I focus and hone in on a particular zoning that I know

I can maximize density out of. on this one, there’s, think it’s RS, sorry, RU5 is what the zoning was called. And I can basically build on 2000 square feet. I can build a single family primary with the ADU on there. So they maximize on density, which has become a big thing over the last several years.

Mike Hambright (18:14.312)
Yeah, probably cities and every city is going to be different, right? But they there’s a lot of pressure on affordable housing. So they’re OK with maximizing density in a lot of markets because they want more affordable housing, right? Yeah.

Terry (18:22.954)
Exactly. Affordability. That’s exactly what it is. So yeah, when I’m looking for deals, I’ll hone in on the zoning. I’ll look at a GIS map and then I could just look for lots that are abnormally big, a little bit bigger than other lots. And I know I could split that lot up into, you know, maybe two or three or four or even 10 at this point.

Mike Hambright (18:44.756)
Yeah. And the traditional wholesaler or fix and flip investor is looking at the value of the current house fixed up. They’re not looking at how to, what if I bulldoze this and add 10 houses on this lot, right? So they’re valuing it very differently than what you would.

Terry (18:51.254)
Exactly.

Terry (18:55.604)
Exactly. Yes, like they brought that to me as a fix and flip, and I looked at this and I was like, holy crap, this is a big lot. You know, at first I was like, no, I’m not interested in buying any flips. And I was like, let me look at this, you know, look at that GIS view. I’m like, damn, this is a big lot for this area. I could do something to this. So, yeah. And then.

Mike Hambright (19:04.224)
Yeah.

Mike Hambright (19:12.99)
Yeah. Yeah. I mean, from somebody that’s flipped hundreds of houses and wholesale hundreds of houses, I can tell you, I never once that I can think I’m trying to think of this right now, like, ever paid attention to the size of a lot, other than like, that’s a big lot. You know, might say it’s a big lot. But I never thought like, what else could I do with all this space that was usually like a burden? Like, man, we got to mow all this, you know? Yeah.

Terry (19:31.532)
Right.

Terry (19:37.902)
Exactly. Exactly.

Mike Hambright (19:41.248)
Yeah, it’s funny. And then let’s talk a little bit about kind of finding funding. So obviously on the real estate investing side, there’s, know, if you’re wholesaling, it doesn’t matter if you’re a rehabber, you got to get kind of private money or maybe hard money or things like that. Like what are the common funding sources in the building game?

Terry (19:58.082)
Yeah, so I mean, it’s going to be the it’s kind of hard to say hard money lenders. call them institutional lenders. They’re not quite a bank. They’re they’re more than a one person operation, hard money lender, somebody that’s kind of pulling funds. They’re more than that, but they’re not quite a bank. They’re working with hundreds of millions of dollars versus a couple of million dollars or something. So those types of hard money lenders I’m working with on.

the bills. don’t work with traditional banks just because they’re a pain in the ass. They take too long. You’re maxed out at how much they’re going to lend to you. You’re usually going to get the best rates, but it’s just not worth the headache going through it. So that’s what I do for my construction loans. 100 % of my construction loans go that route. But when I’m buying land, lots. So like, for example, I buy this one house, I tear it down, and I turn it into 10 lots.

Mike Hambright (20:29.845)
Yeah.

Terry (20:54.838)
I borrowed private money for my land, my teardown, any kind of horizontal work that I need to do to get this thing build ready, my architecture, all that stuff. So I borrowed the money for that. I’ve now prepped this into five lots. It’s all prepped into five lots. I’m finalizing the architecture. We’re getting ready to go into permitting. As soon as we’re going to get the permits back and I have everything priced out, designed, and I know exactly what it’s going to build me in a build.

exactly what I’m going to build and how much it’s going to cost me. At that point, then I refinance out the first, which is now private money into a hard money lender or institutional lender. And I typically don’t have to put money into the deal because I bought so well. I turned this one piece into five pieces, which is now 10 units. And exactly, exactly.

Mike Hambright (21:43.572)
Yeah, yeah, you got a lot of sweat equity there. yeah, yeah. And is it traditional hard money lenders? I know we’ve got partnerships with a couple of large lenders. I think they do a little bit of new construction.

Terry (21:58.914)
Yeah, I mean, CV3 is a big one that we work with. We have a ton of notes with them right now. Long-term and new construction.

Mike Hambright (22:07.924)
Yeah, so let’s talk about some of the pitfalls, like things you’ve seen of people that kind of jump in. And of course, you kind of mentioned one upfront of people that don’t know what they’re doing and try to do too much themselves or try to hire their fix and flip guys to build a house or whatever. But what are some of the pitfalls that you’ve seen of people that kind of jump in and don’t do it the right way, I guess?

Terry (22:25.122)
That’s a big one too.

Terry (22:31.522)
Yeah, I think the biggest thing is that they hired GCs to do the work versus, and then they try to act like the investor. And it’s just like, look, you’re already the investor. Everything’s going to fall back on you regardless that GC is just a contractor that’s going to go away. When you flip a house, you might be able to, you might put one of those home warranties, a $500 home warranty on it. Boom, you’re done with that thing. Your responsibility is over. When you build a new construction house,

you offer a one-year warranty. You have to offer a one-year warranty, okay? And then there’s kind of like this unwritten rule or kind of thing out there that you have to have a 10-year structural warranty. Some states actually make it mandatory. Some states, if it’s not mandatory, but if something happens and there is a structural failure and they take you to court, you’re gonna lose every time within that first 10 years. So you might as well put that into your plan. And it’s, again, you’re gonna have some shitty GC,

that why is that GC wanting to build your houses for 20, $30,000 a pop when that person could do the exact same thing. All they are is a glorified project manager. They could do the exact same thing themselves and get 25, 30 % of the sales price in the form of net profits. You see what I’m saying? Like if they’re going to build a $500,000 house for 20 grand, but you’re, but

you’re going to, if you build it, you’re going to, or if they build it and buy the land and get the finance and yeah, they have less risk, but that make under $25,000 or even more. It’s usually because they’re the B in the C contractors that can’t really don’t know the whole thing. You basically as a, I bet 95 % of people that listen to this podcast that are real estate investors.

They literally all they have to do is become a licensed general contractor. So now they can pull permits if you have to be licensed in your state and understand the front end process and boom, you can build houses, take all of it when you control the risk because if something goes down, it’s going to fall on you, not that GC that you hired. Even if it’s that, you know, there might be some repercussions on them if they’re licensed and

Terry (24:51.18)
all that, I mean, it’s ultimately going to fall back on you as the owner.

Mike Hambright (24:54.592)
Yeah, yeah. Let’s talk a little bit about kind of build a rent. I know that that’s some of what you do.

Maybe talk about how that differs from just regular building. there’s probably a lot of similarities, obviously. And then kind of why do it? I a lot of people have rental portfolios. I have a rental portfolio, but I’ve got stuff scattered all over the place. they’re just houses that I could have wholesaled or fixed and flipped, but I kept them as rentals. And so there’s no rhyme or reason why I have that one, other than that’s the opportunity I came across. But maybe just talk about the build to rent model. Because I know it’s pretty hot right now.

Terry (25:28.758)
Yeah, yeah. So when you’re when you’re buying rental properties, fix and flipping them and putting renters in there, you’re constantly it seems like there’s always you can never make money on cash flow because someone stays in the house for two, three years, whatever, whatever cash flow you made on it. As soon as they they they leave, leave there. Obviously, you’re putting the money back into it. But then the other thing is like HVAC and it goes out the roof. You know, it’s always something where you’re just constantly putting that money back into it.

So build the rent deferred maintenance, number one. Number two, you’re building exactly to the person that you’re renting to, know, the layout, everything. So it’s all new construction. If you’re designed, you know exactly what is going to work best for that market. And then the other part could be on both sides, but we, the materials that we put in there, we do mostly furnish rentals. Okay. So I’m going to build these things energy efficient because I’m paying, I’m fronting that bill. I’m going to.

put some things on in there that I know are going to last my flooring. put laminate flooring in all of my rentals because I mean, you get some decent looking laminate flooring, but it stands a test of time with, you know, people tracking through there. So, and then the other thing is like, you’re like, like I just mentioned, I like to have them all in one area. So I have like 10 over here, six over here.

Mike Hambright (26:41.578)
Yeah, yeah.

Terry (26:53.442)
Got nine over in another spot. So I’ve got these groups in there in, you know, these groups of areas. The other thing is like, look, I bought one house. I take that, the, the, the expense of that one house and I split that into 10. So I have almost no front upfront costs, my construction costs and all that, because I’m building them. can build them a lot more efficient. can determine what my outcome is from the very, very beginning.

And so I have a lot more equity into them. There’s then most people that are just buying a house to fix and flip or fix and rent.

Mike Hambright (27:31.616)
Yeah, you’ve got that sweat equity in there again. yeah. Yeah, I think if you had control, I mean, I just happened to have, I I like three two-twos, but that’s because I was, that’s what I was looking for when I was buying. you know, sometimes you get like a two-one, I probably have a few of those that are not the best performers, but you can really kind of optimize the space, right? You can say like, hey, I need to, I want to build four twos.

Terry (27:34.007)
Yeah.

Mike Hambright (27:53.8)
or whatever because I can get, I mean, it’s not gonna cost you that much more to build a four two than a three two, but the rents are probably better. You’re probably more likely to get a family that’s gonna stay there longer. All those things, right? So you can really kind of control what do you wanna own as a rental and just go ahead and build it, Yeah.

Terry (27:58.445)
Right.

Terry (28:09.11)
Yep, exactly. And yeah, whether you want long term or short term rentals and how you build them out and all that. Yeah.

Mike Hambright (28:12.959)
Yeah.

Yeah. And I guess I know you said earlier, like a lot of builders, you know, I think you said this before we started recording, a lot of builders just keep plowing their own money back into the business. They just kind of keep rolling forward their profits. And, you know, this is a great way to kind of build long-term wealth is to like, reinvest some of that money in your rental portfolio and use, you know, OPM for the new construction side, right? Yeah.

Terry (28:41.43)
Yeah, totally. Yeah. A lot of builders, don’t, they don’t understand what we understand with money and how you can, why are you putting so much money into your own deals? Like there’s so many ways of OPM, borrowing other people’s money and being able to manipulate your deals to not have to put money into your deals. Where a lot of these people are like, they think that they need to put all this money into it. And then they’re just rolling it into the next, next, next. they, they never really have money, but they’re making big profits.

Mike Hambright (29:00.446)
Yeah, yeah.

Terry (29:11.19)
or they can only do so much, they can’t really scale because there’s so much cash.

Mike Hambright (29:15.412)
Yeah, yeah, that’s great. Awesome. Well, Terry, if folks want to learn more about you or connect in some way, where can they go?

Terry (29:22.444)
So Instagram is always the easiest. It’s terrytheraii is my Instagram handle. DM me there and that’s the best way to connect with me.

Mike Hambright (29:32.552)
Okay, awesome. Well, thanks for joining us today. Appreciate the insights. I’m intrigued. While we were meeting here, I texted my contractor and said, hey, maybe we need to get into new construction. That really happened. So I haven’t read it yet because I don’t want to get distracted. But it’s interesting. I’ve been intrigued by it for a long time. And, you know, there’s only so many things you can do in a day, but it’s intriguing for sure. And I’m going to market with DFW with eight million people and growing fast, you know, so there’s a lot of opportunity here. Yeah, yeah.

Terry (29:43.736)
Yeah.

Terry (29:49.411)
Yeah.

Terry (29:52.824)
I

Terry (29:59.276)
yeah there’s a lot of opportunity there.

Mike Hambright (30:01.864)
Awesome man, well great to see you. Hope everybody watching this got some good value from today. Go check out Terry, he’s putting out a lot of good content too. I’ve seen some of it, so make sure you’re following along with him as well if you have any interest at all in jumping into new construction. So, appreciate you guys, we’ll see you on the next show.

Terry (30:18.83)
Take care.