How to succeed with new construction entry level homes with Brandon Cobb!
How to Succeed With New Construction for Entry-Level Homes
Building Affordable Housing with Brandon Cobb
What if the American dream of homeownership didn’t feel out of reach? In this episode of the Affordable Housing & Real Estate Investing Podcast, host Kent Fai He sits down with Brandon Cobb, CEO of FBG Capital, to unpack how new construction can be a powerful way to create affordable, entry-level homes. Brandon went from being unexpectedly fired from his medical sales career to building a real estate development company that specializes in constructing homes working-class families can actually afford.
For investors, developers, and housing advocates, this conversation highlights how focusing on entry-level homes creates both financial opportunity and long-term social impact.
Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.
Why should investors focus on entry-level new construction homes?
Brandon’s pivot from flipping houses to new construction came from a simple realization: building from the ground up was faster and more profitable than rehabbing distressed properties. More importantly, the market for affordable homes is massive—first-time buyers make up roughly 36% of the homebuying market, yet fewer than 10% of new builds serve them.
In a market defined by rising interest rates and volatility, Brandon emphasizes capital preservation. Entry-level homes aren’t just profitable, they are resilient, because families will always need an affordable place to live.
How do developers pick the right land for affordable housing?
Most people imagine construction as dirt, cranes, and framing. But the real secret starts with land acquisition and rezoning. Brandon explains that developers must:
Engage the city first. By asking local planning commissions about their long-term vision, developers identify areas where rezoning will be supported.
Work with civil engineers. Mistakes in site planning can cost hundreds of thousands, so strong engineering partners are non-negotiable.
Force equity upfront. Rezoning land dramatically increases its value before a single shovel hits the ground, creating a safety buffer for investors.
His example: buying a property worth $350,000, rezoning it for 73 homes, and creating over $2 million in value before construction even begins.
What challenges do developers face in affordable housing construction?
Brandon doesn’t sugarcoat it. The process is complex, and risks are real. Common hurdles include:
City approvals: Rezoning and entitlements require multiple hearings and traffic studies, often taking months.
Trade coordination: Rain, delays, and subcontractor schedules can derail timelines. Sequencing every step is key.
Construction costs: Lumber, asphalt, and labor costs change quickly. Smart developers build in at least a 20% cost contingency.
Despite the challenges, Brandon believes partnering with experienced teams and focusing on smaller, affordable units makes the process sustainable.
What does an entry-level affordable home look like?
At FBG Capital, the sweet spot is:
Price point: $365,000 or less
Size: 1,100 to 1,400 square feet
Layout: 3 bedrooms, 2 bathrooms
These homes attract first-time buyers and are flexible enough to work as build-to-rent properties. That means investors have multiple exit strategies—sell to a family or rent to tenants under Housing Choice Voucher programs.
How does mindset shape success in affordable housing development?
Brandon’s story is one of resilience. After being fired from a career he loved, he reinvented himself. He stresses three key mindset shifts:
Hire rockstars, not cheap labor. Strategic partners with expertise and cultural fit are essential for scaling.
Hyperfocus. Avoid running multiple mediocre businesses. Focus on the one model that creates the most impact.
Know your real business. Brandon realized FBG wasn’t just a builder—it was a capital raising and finance company that happened to manage construction in-house.
For entrepreneurs and investors alike, his advice is clear: embrace risk, build the right team, and focus on long-term capital preservation.
Key Insights for Affordable Housing Investors
Entry-level homes represent the largest buyer pool but the least new supply.
Rezoning land creates equity upfront and mitigates market risk.
Capital preservation—not just profits—should guide investment decisions.
Partnering with experienced civil engineers and trades reduces costly mistakes.
Build-to-rent models align perfectly with affordable housing and Section 8 vouchers.
Best Quotes from Brandon Cobb
“Nobody is going to look out for your financial well-being but you.”
“We actually built a brand new home faster than we rehabbed one—and made three times more money.”
“Entry-level buyers make up 36% of the market, but less than 10% of new homes serve them.”
“Hire strategic partners who are smarter than you. That’s how you scale.”
Frequently Asked Questions
Why is new construction better than flipping for affordable housing?
Flipping is limited by existing structures and surprises during renovation. New construction allows developers to control costs, design for affordability, and scale faster.
What makes entry-level homes a safe investment?
They serve the largest buyer demographic, are always in demand, and provide resilience during economic downturns. Families may delay luxury purchases, but they always need affordable housing.
How can developers protect against rising construction costs?
Build in at least a 20% contingency and secure strong supplier relationships. Some firms even import materials internationally to cut costs.
Can new construction serve Section 8 tenants?
Yes. Build-to-rent models can align with Housing Choice Voucher programs, providing government-backed rental income while meeting community housing needs.
Why this episode matters
Brandon Cobb’s journey proves that affordable housing and profitability can go hand in hand. By focusing on entry-level homes, developers can help families achieve the dream of homeownership while providing investors with recession-resistant returns.
Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.
DM me @kentfaiheon IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.
