Though only in her thirties, Natalie Cloutier has built a nine-million dollar real estate portfolio with just eight properties. Her secret to success? The “build-to-rent” strategy that so many real estate investors won’t even consider. Most investors feel that the building process is too complicated, expensive, and requires too much effort to be worth the time. But what if this “build-to-rent” strategy allowed you to create your own profitable deals, make massive amounts of equity, and build wealth even in a highly competitive market?

After her parents shared their secret strategy to build wealth, Natalie realized that building rentals, not buying them, was her ticket to financial freedom. But how could she get started? She was a fresh college graduate with no money to her name. Thanks to a no-money-down construction loan, Natalie built her first rental property, a house hack, which ignited her multimillion-dollar real estate portfolio.

In today’s show, she shares her “super secret method” to “building” wealth with the build-to-rent strategy, how to CREATE your own deals in ANY market, what you can expect to pay for a new construction home, how to find land to build on, and the biggest challenge that stops most investors from getting started (you CAN get around this!). Plus, how she’s doing it all in Canada’s unbelievably unaffordable housing market.

Dave:
Welcome to the BiggerPockets podcast. I’m your host, Dave Meyer, joined today by my friend, Henry Washington. Henry, thanks so much for joining me today.

Henry:
Hey, thank you for having me, man. I always say it, but I love doing these shows with you. And this is a pretty fun one that we get to do today.

Dave:
I am very excited to have this conversation, but I need to ask you, how is your French accent?

Henry:
Well, terrible to be honest with you. Terrible. Every time I hear a French accent, I just think about the video where the guy got his croissant knocked out of his hand and all he could say was, “You made me drop my croissant.”

Dave:
Okay. Well, I’m going to still make you do it anyway because our guest today is a French Canadian investor, which is super cool. There’s a lot to learn and there are so many overlaps and interesting things going on in the Canadian market. And I am going to have you pronounce Natalie’s last name because I want to hear your French accent.

Henry:
Yes. Today we’re going to be talking with Natalie Cloutier about new construction and how she is using new construction to create profitable deals in today’s market. We’re going to learn about how she is finding land and developing that land into a robust rental property portfolio by doing her super secret method that you know a little bit about, which she will share with you at the opening of the show.

Dave:
Well, first of all, Henry, I took French for six years and you have a better French accent than I do, so excellent job with that. But as Henry said, Natalie is a seasoned investor and she’s going to teach us about budget-friendly construction that honestly is not as inaccessible or difficult as you might assume. Let’s bring on Natalie and learn about her really interesting and unique approach to real estate investing. Natalie, welcome to the BiggerPockets podcast. Thanks for being here.

Natalie:
Thank you for having me. Man, what an honor. I am stoked. I am nervous, I’m all the feels. Let’s do this.

Dave:
I like it. I am feeling the energy. This is going to be a fun show. To kick off this conversation, can you tell us a little bit about your real estate strategy? I understand you have an interesting name or terminology for the strategy you use. Can you tell us about it? I

Natalie:
Have a couple names for it, but I guess the one that kind of bounces off more is the BRRRR 2.0 that I like to call it. It’s like the traditional BRRRR of buy, renovate, rent, refinance, and repeat, but instead it’s build, rent, refinance, and repeat. We build from the ground up and we hold the properties long term. You can also call it the build to rent or build and hold. But yeah, basically you buy land, you hire a designer, you set your budget, get all your estimates, get your appraisal, build the thing, rent out the thing. And then refinance and repeat again.

Dave:
Very cool. I’m looking forward to digging into that. But before we talk about specifics about this really cool sounding strategy, you are a Canadian investor. Can you just tell us and give us a little bit of background about the Canadian housing market and what’s happening there?

Natalie:
Things have been crazy probably about the same as you guys. But obviously interest rates skyrocketed, they doubled or if not more. And so I’m a realtor, but I am not a very active realtor, so I don’t check the database all the time, the daily activity. But I do know on the buy and sell side of things, there’s definitely been a little bit more of an increase in inventory in the market, but not that much because I think there’s still a lot of people that are waiting on the sidelines for interest rates to drop.
Houses that are priced above 650K. I think 650 is pretty much the average home price, so anything above that takes a little bit more time to sell, yet it still does sell. And it might even sell with a competing offer, but it usually sells under asking, so you have to be well priced. I also think that in the next couple of months, the projected five-year fixed will be a little bit lower and things might start picking up again during the springtime. But that’s my opinion anyways for the local Ottawa market.

Henry:
For a point of clarification, so right now here in the US we’re at 680 on a 30-year fix. Where are you at in Canada in terms of interest rate?

Natalie:
First of all, 30 year fixes don’t exist in Canada. That blows my mind that you guys can get, you lock in a rate for 30 years. I’m so jealous of that. I know, right? God bless America. In Canada, you have to renew your rate no more than five years. Five year max you got to renew your rate. I believe we’re at 5%. We’re a little lower than you, but our house values are a lot higher than your typical in the US rate.

Dave:
I do just want to clarify for people as we have this conversation with Natalie. I know everyone feels the United States housing market is very expensive, and that is true. But by most estimates, the Canadian housing market is 50 to 70% more expensive than the American market as just judged by income versus the expense to buy a home. If you’re thinking, oh, things are different in Canada, it must be easier to buy. It’s actually harder for people to buy in Canada than it is in the United States.

Natalie:
Absolutely. It’s a pain in the butt.

Henry:
More expensive and you can’t get a 30-year fixed. Got it.

Natalie:
Yeah, exactly.

Henry:
The other thing I wanted to talk about was in the United States, what’s playing into our prices not really taking a huge dip across the country is we’ve as a nation have more demand than there is supply. I would say especially in the single family space we’ve got, we don’t have enough homes for people who want to rent or buy, which keeps the pricing up. You talked a little bit about inventory, but can you give us some… Paint a picture in terms of what’s inventory like in Canada?

Natalie:
Well, you know what? I think our problem in terms of housing shortage, from what I’ve read and from what I understand, I think it’s worse in Canada. Because yes, there’s less people per capita, but there’s just not enough housing. There’s just so much territory to cover.
And so, we are facing serious housing shortages in different markets. You look at Vancouver, Toronto, Montreal, all that, the bigger urban areas, there’s definitely a big problem. And so a lot of municipalities, a lot of areas are trying to get more inventory created. In Ontario, they created the Bill 23, so for me, this was a golden ticket. They created this in 2023 that basically it allows to add more secondary dwelling units onto existing properties that already have secondary dwelling units.
It’s basically a way to stop the municipalities from putting their brakes on development projects and stuff like that so that we can create more affordable housing. Yeah, no, I think we might be a little bit worse, but I’m not too sure. Don’t quote me on that, but it’s definitely a big problem of housing shortage here.

Henry:
Well, it seems like we’ve talked about a lot of challenges and difficulties that one would see as a problem to be an investor in the Canadian market. How is your method of the BRRRR 2.0 allowing you to succeed? Because it sounds like you have all these challenges, but you still have a successful real estate portfolio and business. What’s driving that?

Natalie:
Our strategy, I mean we’ve been doing this for 10 years now. We have seen a couple market cycles. We always face challenges. During COVID, it was the high prices of construction, finding labor. Yet there’s still a lot of reasons why I just love this strategy.
I have five reasons to why I love this strategy, but first of all, the number one is new construction. The value is always higher than older buildings. If you look at our portfolio to say that we have $9 million or we’re closing in on $9 million worth of real estate, but that’s only spread out across eight already built properties. Yes, we have three vacant lots, but they’re worth a lot less than the actual built properties. That’s 26 units for almost $9 million of real estate. But I know someone who has a portfolio of $15 million, but it’s 90 doors. For $6 million more, they have to manage 70 doors more than I do.
I just love new construction for that because you can basically, you have more control over the design and the budget and what you want to build on the land. You can almost create the value that you need for the property. I love that.
I also love the fact that you can create your own deals with it. Finding properties on the market that have enough equity built in so that you can force appreciation with renovations can be really challenging. And especially here in Ontario, the rental laws make it very, very difficult to vacate tenants in order to renovate the properties. For us, doing new construction is like creating a loophole for creating our own deals.

Dave:
All these points make sense, but I can imagine that there are probably some cautious investors out there who hear the term new construction and basically think risk because I am one of them. After the break, Natalie walks us through what she’s doing to mitigate that risk and the smartest choices any investors should make in order to keep building costs low. Stick around.

Henry:
Welcome back, everyone. We’re here with Natalie Cloutier and we’re talking about investing in new construction and how to keep your costs low and your profits high.

Dave:
Natalie, it’s interesting because you’re saying that you find all this flexibility and creativity in new building, which is really cool. When I look at new building, I see risk. It worries me just to be perfectly honest. I see a lot of complicated things going on. And so, am I wrong. Do you see risk or are you just comfortable with risk or how do you get over some of the challenges that are associated with new buildings?

Natalie:
I mean there’s definitely more risk, especially in terms of financing. It is way easier to get financing on an existing property because there’s a tangible asset for the lender to consider. When you’re doing a new construction, you’ve got a vacant land, it can be harder to get traditional financing because there’s nothing tangible for them to consider. And so they don’t want to repossess a half-built property. It’ll be very hard for them to resell.
Traditional financing can be harder. However, it is done. We have done it. We started through house hacking, so just saying that could be a good way to get in. But there is risk. You just have to hire the right people. You have to hire the right designer, the right civil engineers. And have the pre-consultations with the municipality. That’s my number one rule.
If you go under contract on a property, make sure that your condition in your offer includes a pre-consultation with the municipality and bring a list of questions of what you want to address. Don’t hide what you plan to build. Be straight up with them. Tell them, “I want to do this. I want to do a triplex, I want to do a fourplex. What do I need to get this approved? Do I need to do minor variances? Do you think this lot will cause any problems?”
You just have to be really straight up, do all your due diligence. And then in the end, to me it’s like doing any other kind of deal. It’s all about your due diligence and hiring the right team.

Henry:
Hiring the right team is drastically important. And I think you said something here that is important for people to realize. You said you go and you talk to the city’s and municipalities and you’re upfront with them about your plans. In the United States, we also have to deal with obviously the cities and the municipalities and get their approval. What I’ve found is super helpful is not just going to them and saying what you want to do, but going to the city and asking for their opinion on what they think should go or what should be done in this area.
Now, whether you’re going to do that or not is irrelevant, but I found when I go and I ask, “Hey, I’ve got this lot, I’m considering doing this. What do you think or what would you do with this lot?” Knowing because they have obviously information about what’s coming that maybe you don’t have. And I just found that if I rephrase the question and ask for their opinion, whether I do it or not, I get their buy-in on whatever I’m going to do because they feel valued and they feel like this is somebody who wants to work with us and not somebody who’s trying to work against us.
Is that… I would assume that the permitting process or that the approval process is very similar. You’ve really got to get these people on your team. How do you go about that?

Natalie:
You nailed it because we have to have really good relation with the city. You have to make sure that you have an open, honest communication with them and that you can have a precedence and make sure that you build a solid relationship or a solid… I have the word in French. Reputation.

Dave:
What is it in French? What is it in French?

Natalie:
Réputation. It just wasn’t coming to me.

Dave:
That sounded way cooler. Let’s just stick with that.

Natalie:
My bad.

Henry:
No, that’s perfect. I was going to take on a new construction project this year. And then I decided not to do it because there were just a lot of challenges and hoops to jump through, and it became very overwhelming for me. And not because I think new construction is super overwhelming, but I think because it’s not my bread and butter, the time and effort it was taking me to have to jump through all these hoops and plan this thing out was taking away from me doing deals that were within my bread and butter.
But one of the things that were a concern for me was, and I think it’s a concern for a lot of investors, is the initial upfront costs to build a new construction project before you even break ground, right? Because permitting costs money and surveys cost money and utilities cost money. And there could be excavation work.
And so, I guess it’s a two-part question. How do you pay for those things on the front side or how do you budget to pay for those things? And then, how do you know what you’re going to have to pay for when you’re out here making these offers?

Natalie:
Yeah. When you’ve got all your plans done by the designer, you have to have them appraised. You have to have your budget, you have to get your estimates in before you even submit for your appraisal. And then once you get your appraisal report, that’s where it paints a really solid picture of they’re going to give you your cost approach, which is basically what it costs to build. Your income approach, that’s usually the highest one. And then your market value.
By seeing that report, it can give you a good idea of what you’re going to have to work with in the budget, because typically a traditional lender will finance 80% of the cost approach, which is the lowest of the three approaches in your appraisal. If you think that you’re able to do it for that 80%, then yeah, you’re probably good to jump in. But if you think that your costs and your estimates are way over that, then maybe it’s not the right project or maybe you have to redesign, maybe you have to reassess.
We usually, because the way they do the traditional financing is that, like you said, you have to put up a lot of upfront money. You have to basically cover the down payment, the 20%, yourself before they even give you that first draw. It can be very tricky. We have line of credits lined up. We have been working with the same credit union ever since we started, but you can also get a private lender.
We’ve done that before too. We were about to build a fourplex once. And at the ninth hour the financing fell through. They thought they made a mistake, and so they revoked it. And we were just about to pick up our $40,000 permit, so we panicked. And we got, you do what you do when you don’t have a choice and you’ve got a gun to your head. And we found a private lender. It was a really great deal, and it ended up being a really good contact of ours now.
But yeah, we did the entire construction with a private lender that he still did it in a traditional draw. He would send in the draw. You’re only paying interest on the amount that’s being used, you’re not paying on the full amount. And we did it that way. That’s a really good way to do it when traditional financing is taking too long or if there’s just too many bureaucracy loopholes to jump through.

Henry:
Okay, great. That makes sense. It’s actually pretty similar to what we would do on a more traditional renovation project. What you’re saying is you understand that there may be expenses on the front side before I break ground. And so, you go out to your network of private lenders and your network of institutional lenders and you get lines of credit or access to money. So that if those things come up, you’ve got them on lines of credit. You can then fund these things not directly out of your pocket, take care of the expenses. And then when you go and you get your loan, you can either pay yourself back for those things or when you refinance out, you can pay yourself back for those things. Is that what I’m hearing?

Natalie:
That’s exactly it, yeah.

Dave:
Natalie, you very clearly know what you’re talking about, new construction. And I am just curious, is this how you started in real estate? Did you just start building stuff right off the bat?

Natalie:
Not really, no. We started, we were just fresh out of college in 2013. We had graduated from college, young and in love wanting to move in together. And it’s funny because my husband was actually renting from student housing rental back in the day, and he had a bunch of roommates and they were the definition of the worst tenants. I’m talking bed bugs, parties, never paying on time, the whole shebang. It’s ironic that now he’s a landlord.
But anyways, he wanted to get out of that and move in with me. I was still living at my parents. And so we ended up buying a basement unit condo because that’s all we could afford. We thought we’d be renting an old apartment, but we bought a basement unit condo. We moved in there. And then three months of living there, we realized we are not condo people. There’s just too many neighbors living above us. The condo fees were already rising.
And so we were talking to my parents about that and how we were a little disappointed. And I had this aha moment because my parents was like, okay. My mom said, “This is time you knew the truth.” And so it felt like, I don’t know if this ever happened to you guys. When I was a kid, I had this fantasy that my parents were secretly rich, but they just wouldn’t tell you because they want you to be humble. And then all of a sudden they revealed that secret to you. It felt like that moment, it’s not what happened.
And so, they told us, “There’s this loan you can get, it’s called an auto construction loan. And you can replace your down payment with sweat equity.” I remember feeling super stressed because I thought I’d be renting an old apartment to now all of a sudden I’m building a new house. They said, “And then to help pay for expenses, “because we were new graduates, they said, “You can just get a basement apartment to help pay for expenses.” Already it was house hacking. I didn’t know it was a thing back then.
But that’s what we did. We built our own home, we added the basement apartment. And then a year later we realized that we had forced appreciation with that basement rental. And so we added a $40,000 HELOC. And then from there we realized we could use our design skills because we studied architectural technology. We’re like, we could use our design skills and make this into a business. And then we only learned a couple years later that this is actually real estate investing that we were doing. We were young, so we really didn’t know what we were doing.

Dave:
Natalie, when you moved in together, did your husband become a better tenant than he was with his friends?

Natalie:
Well, I mean he was owning, so at that point, yes. But he’s still messy. I mean, hey, he’s a guy.

Dave:
But he didn’t bring the bedbugs with him hopefully.

Natalie:
That wasn’t him. That was his roommates. It was guys living in that apartment.

Dave:
All right. Well, thank you for telling us a little bit of your backstory, Natalie. I’d love to pivot the conversation a little bit to some tips that you might have for our audience about building. It sounds like Henry’s been considering it. I actually closed on a property today that I’m thinking about redeveloping. I would love your help on how to make new builds cost-effective. It seems like the fear I have personally is that we might have something just gets super expensive and there’s just all these over-run. How do you keep things under control?

Natalie:
The first thing I would say is you have to meet with your designer, architect, whatever you want to call them, and you have to sit down and tell them that your intention is to build a rental property I’m assuming. I don’t know if you’re building to sell, but in this case if we stick to building to rent, you say, “Yeah.” You want to have a budget-friendly construction.
It doesn’t mean cutting corners and being a cheap contractor. It just means you don’t want any fancy roof schemes or fancy footprints. You want to keep the box and the footprint relatively simple so that the structure aligns, your mechanical aligns, your electrical panel is placed in a convenient location that it’s not too far away from the kitchens where you have the most wiring. Your duct systems are essential. You have to just make it efficient in terms of budget and in terms of everything else, in terms of functioning too.
And then another thing too, that if you want to save a lot of money, is build it yourself. Be the project manager on that bill because you’re going to save 15% on top of your cost. If you hire a PM on it, they’re going to charge you 10 to 15%.

Dave:
Well, that one’s out for me.

Natalie:
Yeah. It is for a lot of people, and I mean that’s fine. But yeah, it’s going to cost you a little bit more. We save like $75,000 every construction by doing it ourselves, so it’s a good chunk that you can put towards your refinancing, your BRRRR. But yeah, and then obviously just get as much estimates as you can.
But definitely, it’s all about the design and the structure. You don’t have to put in fancy bathrooms. We used to put a standalone tub and a standalone shower, but then the shower would always leak. We’d always have problems. We just do shower tub combos. We do maybe a single vanity. You keep it simple, but you keep it nice. You keep it, it still has to test of time. But yeah, I mean it’s all about the KISS rule, keep it simple, stupid.

Dave:
Does that mean that your buildings are ugly? Just out of curiosity, I don’t want to make any accusations, but are you still able to make it into a nice place?

Natalie:
Absolutely. It’s all about textures. You can have a boring box, but if you make the front work with different textures and stuff, it can still look really nice. And anything that’s new is not ugly. I mean, come on. It’s new. It looks good.
Yeah. We play with a lot of the textures and we can make it look usually really nice. We’ll play with stone and siding. Typically, that’s the exterior finishes that we look for here in our area. But we have one building that we’re doing right now with the budget was a little tighter, so that one’s a full siding, a little bit more boring. But it’s still new, so it still looks good.

Henry:
No, I think that that’s a fair question, Dave. Because that’s what people think, right? When we say, “I want to build a rental,” people automatically think exactly what you said, Natalie. Oh, you’re going to cut corners and you’re going to build something ugly.
And that’s not at all what’s happening. Affordable housing doesn’t need to be ugly. Affordable housing doesn’t need to be cheap. It can be done intelligently and still look beautiful. I think your point about being smart about the types of finishes that you put in is huge because when I was in talks with the designers, everything they wanted to do, you’re right, it was these pitched roofs. And what are they called? Where you let the light in that I’m drawing a blank on right now.

Natalie:
The skylights.

Henry:
Yeah, pitched roofs and skylights. And I remember she was like, “For the driveway, we can have it where you do the slabs of concrete and then the grass in between.” And I’m like, “I just need a place for them to park.” When you think of from a rental perspective. And so, are you finding designers that typically do this for rental property so that you’re not having to deal with all of those headaches of trying to explain to people every single time why that doesn’t make sense for your build?

Natalie:
Well, luckily my superpower as an investor is that I can do the plans myself because we studied architectural technology, so we do all of our drawings in-house.

Dave:
What?

Henry:
Cheat code.

Natalie:
Yeah, so that’s our superpower, our cheat code. Exactly. But there is a way, I have friends who do it with designers. You just have to really communicate. There’s just so many different construction systems out there. You just want to do a plain and simple. Two by six construction with your standard package.
As long as everything is up to code, which is already the building code these days is already way better than whatever it was 10, 15 years ago. You just want to follow code, pass all your inspections, be legit. But yeah, no, definitely it is way fun to be able to do our own designs and our own plans.
The other day we’re working on a new triplex design right now. And it’s like a different grade level and it’s a little bit complicated. And we were sitting watching TV. It was like eight P.M. and Rob just lighted up all of a sudden. He’s like, “Oh, I just have an idea.” And we went to the computer, sat down, redesigned what we were trying to do.

Henry:
That is absolutely a cheat code. That’s cool. During our pre-interview chat I did, I asked you about how you’re finding the land. And you said you get a lot of the land that you’re purchasing. I think you said about half the land, you purchased things on the MLS. Can you talk about that for a second?

Natalie:
Yeah. Most of our deals, I’d say 50% was through MLS and the other 50% was through our network. People just calling us. I’ve been posting on Instagram what we’re doing. And it started with just posting it to friends and family and the word spreads. And people call you, they have land that they want to sell.
And then, yeah, a lot of it has been through MLS because, well, this was before COVID but during COVID, everybody was being a developer, all of a sudden everybody was buying land. But before that, vacant land was usually the type of property that would take a little bit more time to sell on MLS. We had time to do our due diligence, negotiate and then make sure that this was a solid deal.
And it’s starting to come back to there’s still more developers than there were before COVID. But we just bought a bank repo off of MLS. I mean, it’s coming back. Yeah.

Henry:
All right. We’re going to take one more quick break, but stick around for the rule of thumb that you should use if you’re going to be buying land and how Natalie is managing the interest rate challenges of the current market. Stay tuned.

Dave:
Welcome back. We’re here with Natalie Cloutier talking about the smartest way to do new build. Let’s get back into it.

Henry:
One of the things that I do when I’m buying land is I need to get it at a price point where, if at some point I decide that I don’t want to do a new construction project, I can sell the land and at least recoup my money. Break even, maybe make a little bit of money. And so, how are you mitigating risk on your land purchases? Can you pivot or do you have to build once you buy land in order for you not to lose money?

Natalie:
Usually when we buy land is because we’ve done our due diligence, we know exactly what we’re going to build on it, and it’s just like a done deal. But yeah, I mean you can pivot, but if you did your due diligence correctly, you should know what you’re about to build. Or you should have at least an exit strategy of if this doesn’t work, what could we do with it instead? Maybe you can change the zoning on it and do something completely different. Maybe you can resell it at a higher value. If you’ve done a lot of the steps of the permitting steps, maybe you can resell it and include that as a package to another investor. I’m not sure if that answers your question.

Henry:
No, no, you nailed it. You did good.

Dave:
Natalie, as we head into another uncertain year for interest rates, construction, the broader economy, what are some of the challenges you’re anticipating over the next year and how are you managing that?

Natalie:
Interest rates have definitely put a crimp in our approval rating. It’s a little harder to get approval. It’s harder. We used to be able to pull out money at the end of every construction and pay ourselves a salary with that, like a typical BRRRR. But in this case, the triplex we’re doing right now, we’re actually having to leave money in for the first time, which pisses me off, but I mean it’s part of the new world we are in right now with these rates.
The way that we’re going to try to pivot around this in the next couple of years while interest rates are high, is that we just have to make sure that the rents that we can get. Basically this triplex, the reason why we have to leave money in is because for one, we bought the land towards the end of the COVID high time, so it was still a little bit high. And it was a very tight lot where you can only fit two bedroom units.
And like I said, initially there was an influx in two bedroom units, so they are harder to rent and I can only get so much for the rents. But the next triplex we’re doing with the one with grade problems, this one, we should be able to fit three bedrooms, two baths. That should be way better rents, therefore the income approach will be higher, which will also increase the cost approach. And basically your value is higher. We should be able to at least break even with that one and not have to leave any money in.
Actually I just sent it in for appraisal this week, so I can let you know in a week if that works and if the plan pans out. But yeah, I think that’s how. You just have to make sure that you can really maximize your ROI on the build, that you can get as much of the maximum rates that you can for rent so that it improves your value.

Dave:
Got it. All right. Well, thank you. And what about for people who want to get started in the beginning in new construction? Because it does feel daunting as someone who’s just starting to consider it. How do you recommend people just get on the path towards being able to pull off these kinds of projects?

Natalie:
100% house hack. Now I know a lot of people don’t want to do house hack because maybe they’re already, in their living situation, they don’t want to change. But the reality is if you get to design and build your dream home, why not?
I think it’s great. That’s how we started. It’s always a lot easier to get financing to when it’s a house hack and you don’t have to rent rooms in the property. It can be a basement unit like we did. It could be a unit above a garage or even a coach house in the backyard. You can get creative with the ways that you house hack. But as soon as you do that, first of all, it’s like I said, easier to get financing.
Once you have your foot in the door and you complete your first build, it creates a precedent and it creates a history with your lender. Then they now see that you’re able to complete a construction, that you’re able to do that process. It should be easier on the next one, especially if you can force appreciation with a secondary unit that adds income to the property and you can get a HELOC.
And you do the way we did it, you buy it a piece of land, you keep going from there. I think that’s definitely the best way to get started in new construction as it is in most strategies. House hacking just rules.

Dave:
Well, that’s awesome. Congratulations. I just want everyone to think about what Natalie is saying here. House hacking, we all talk about it so much as it’s such a good way to get started because it’s really just training wheels. It teaches you so much about investing.
And honestly, I had never really thought about house hacking with new construction before. But it’s just another example of how, depending on what strategies you’re interested in and what markets you operate in, you can use house hacking in a variety of different ways to teach yourself the skills in a relatively low risk or at least a lower risk way than just doing this on a traditional rental property that is not owner occupied.
I kudos to you, Natalie. That’s a super cool story and thank you so much for sharing it with us today and all of your knowledge about construction and the Canadian market. We really appreciate you having you on today.

Natalie:
Yeah. No problem.

Dave:
Big thanks again to Natalie. Learned a lot in that episode and it’s something that’s pretty relevant to me. Henry, how deep into your investing career did you start new construction?

Henry:
Six years, five years, maybe five and a half years. Just recently.

Dave:
And what gave you the confidence after five and a half or six years to start going after it?

Henry:
Well, I’m pretty strategic about how I do it. And so I don’t go out and look for property to buy so that I can build new construction on. What I do is I find deals that work as they sit that have additional lots with them. I’m only building on land that I got for free or super cheap. That way if I want to pivot and not build because it gets too tedious or too expensive, I can just sell the land as it sits because I basically got it for free.

Dave:
You clever, clever man. That’s a very good strategy. Well, thank you so much for joining us here today. I would love to hear from everyone listening if this type of information about new construction is relevant to you. I don’t personally do it, but I’m super interested in it. And more and more people I talk to, this idea of build for rent, whether you’re doing a BRRRR or you’re building them and selling them off seems to be a really profitable, successful strategy here in 2024.
And if you want to hear more about it, please let us know. If you’re on YouTube in the comments, let us know in your comments. We’d love to hear if this strategy here, this type of conversation is relevant for you. And if you want to learn more about Natalie, make sure to check out our show notes. Henry, thank you for joining us. I hope you and your wife have a lovely Valentine’s Day. And I’ll see you very soon.

Henry:
Yeah, unfortunately, I’ll be with you on Valentine’s Day and not my wife, but I will make sure she’s taken care of.

Dave:
Excuse you. You are lucky to be with me on Valentine’s Day. I know that’s what both you and your wife want is to be talking about podcasts with this guy. All jokes aside, thank you all so much for listening. We appreciate you and we’ll see you very soon for the next episode of the BiggerPockets podcast.

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



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