From Dirt to Doors: A Real-World Walkthrough of Building Duplex Rentals

From Dirt to Doors: A Real-World Walkthrough of Building Duplex Rentals
By Chase Calhoun
If you caught my latest YouTube episode, “Building Duplex Rentals: Start-to-Finish Tour + Funny Surprise Visitor!” you saw two side-by-side projects in radically different stages—one slab just poured, the other gearing up for lease-up. Today I’m expanding on that tour with a step-by-step playbook, real cost benchmarks, and hard-won lessons you can use on your own build-to-rent (BTR) deals. YouTube

1. Start with the Exit—and Work BackwardKnow your rent targets and refinance plan on day one. For our Little Rock duplexes (≈1,350 sq ft per side), we’re underwriting $1,550–$1,650 monthly rents based on nearby comps and the 2025 surge in renter demand that BTR properties keep capturing nationwide. Institutional research projects continued growth in this sector as affordability pushes more families toward purpose-built rentals. Cushman & Wakefield
Pro tip: Run a sensitivity table on exit cap rates before you buy the dirt. A half-point swing can erase your margin if you’re banking on a quick refi.

2. Land Acquisition & Due Diligence

• Lot cost ceiling: I aim for land at 8–12 % of projected ARV. Anything higher crushes cash‐on‐cash.
• Zoning check: Verify duplex use-by-right or secure a conditional use permit early—fees are cheap compared to redesigning after you’ve poured piers.
• Infrastructure: Confirm water, sewer, and three-phase power capacity. Nobody wants a $25k utility surprise eating the contingency line.

3. Budget Benchmarks (2025 Numbers)Cost BucketTypical RangeMy Target*Land (per finished lot)$20–$55 k$32 k
Hard Costs$130–$200 / sq ft national avg HomeAdvisorBankrate$142 / sq ft
Soft Costs (plans, permits, interest)7–12 % of hard9 %
Contingency5 %5 %
*Little Rock labor & materials; adjust for your market.
At these numbers our all-in is roughly $410k. With stabilized rents of $3,200/mo and a 6.25 % fixed-rate DSCR loan, we’re penciling $700+ monthly cash flow and ≈20 % IRR over 10 years. Real-life investor Brannon Potts is seeing similar spreads—about $330 per unit—by keeping build costs near $120 / sq ft and self-managing the GC relationship. Business Insider

4. Construction Phases in the Field

1. Site Work & Slab – Laser-grade pads, post-tension slab, sleeves for utilities.
2. Frame---to-Dry-in – Roof on within 14 days of set; schedule windows before the framers leave.
3. MEPs Rough – Place HVAC returns high to free furniture walls (my favorite framing tweak from the video).
4. Inspections & Insulation – Use open-cell spray foam in party walls for sound + R-value without adding furring complexity.
5. Finishes – Standardize SKUs across all projects to keep change orders—and margin erosion—near zero.

Surprise visitor bonus: Yes, that possum in the dumpster reminded us why lids stay closed after framing crews leave!

5. Financing: Construction-to-Perm in One ShotLocal banks still quote 75–80 % LTC if you demonstrate a proven cost-control track record. Structure interest-only during construction, roll to a 30-year amortizing note at C/O, then refi into agency debt once you’ve got seasoned rents. Bring ≈20 % cash for draws between inspections—that’s the same buffer I recommend to clients who toured the site last week. (If you missed the episode Q&A, rewind to the 4-minute mark.)

6. Operational Edge Once the Keys Turn Over

• Lease-Up: Offer a 14-month first lease—tenants lock an extra month of security, you stagger winter turnovers.
• Maintenance: Pre-install smart water-leak sensors behind every sink (≈$60 each vs. a $3k insurance claim).
• CapEx Reserve: Set aside $300 per unit per year—new builds cost less up front, but roofs still age.

Bottom LineBuilding duplex rentals isn’t just stacking two single-family homes back-to-back. Done right, you squeeze more doors out of the same footprint, reap economies of scale on everything from framing to lawn care, and lock in returns that beat most turnkey single-family acquisitions in today’s compressed cap‐rate environment. With smart land buys, tight cost control, and a crystal-clear exit plan, you can go from raw dirt to cash-flowing doors in under 12 months--and have a good laugh when uninvited wildlife drops by.
Ready to dive deeper?

1. Watch the full on-site tour here.
   
2. Download my free duplex pro-forma template.
   
3. Join our investor list for first look at the next tranche of BTR projects hitting the pipeline this summer.
   

👉 Want the inside track on new deals, build-cost data, and subscriber-only case studies? Join our mailing list here.
See you on the job site—until then, keep stacking bricks and building freedom.