If you’re a real estate investor who is exploring the possibility of investing in a brand new home instead of buying an existing structure, you’re really on the right path in the proper market. Lot values over recent years have been next to nothing in certain areas and with the housing rebound,new construction sometimes the better real estate investment is building a new home instead of rehabilitating an old one.

When you decide to invest in a new home to flip or rent out, you have two basic choices. You can build from scratch based upon your own plans and specifications or you can buy a new home from a developer in a new subdivision and while there are similarities there are also some differences between the two.

If you want to build your own home with your own plans the process will take a bit longer. You’ll have to hire an architect to help design your home or find existing construction templates already prepared. Once you have your plans ready you then find a builder to provide you with an estimate on how much it will cost to construct the home. Once those costs are identified, a trip to a construction lender is next who will provide the construction loans and monitor the payout process between the bank and the builder. Finally, once construction is complete the construction note is replaced either by you or your buyers with a permanent loan.

If you’re picking out a home in a development, you will visit a few model homes then pick out the different floor plans the builder is offering. In addition to the floor plan you’ll also customize the home from a choice of appliances, colors, drapes and flooring. Instead of construction financing however, all you’ll need to do is provide an earnest money deposit to the builder, obtain a conventional mortgage then close on the transaction once the home has been completed.