Build-To-Rent Explained: Filling the Middle Market Housing Gap in 2026

Alec Neu (00:00)

That’s a newer side of our business. We really just launched that, I’d say, within the past three months. So we’re still learning the ins and out of that, ⁓ of capital raising. We’ve had some early success in that. We’ve already raised $5 million.

within the past 30 days to build right around 150 units throughout ⁓ Indianapolis as well as in Muncie, Indiana.

Michelle Kesil (01:58)

Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil, and today I’m joined by someone I’m looking forward to chatting with, Alec Neu, who is a director at Neu Real Estate, a real estate development and investment firm based in Indianapolis, Indiana. So excited to have you here today, Alec.

Alec Neu (02:18)

Yeah, thanks, Michelle. Appreciate you having me on.

Michelle Kesil (02:21)

course, think our listeners are going to take something away from how you’re approaching your multifamily developments and raising capital, so let’s dive in.

First off, for those who are not yet familiar with you and your work, can you share what your main focus is?

Alec Neu (02:39)

Yeah, of course. So neu real estate group, it’s I’d say a family business. We’re based here at Indianapolis and focused on build the rent. So we’re a developer and a builder. We build in the Indianapolis area, a duplex and quadplex product. I’d say within five to 15 minutes of the downtown Indianapolis core and then

The other side of our business, also build to rent communities, which is essentially looks like a subdivision of all for rent housing. So we’ll build and raise money to develop anywhere between 25 to 150 units throughout the state of Indiana, as well as in Indianapolis.

Michelle Kesil (03:32)

Is your market currently only Indianapolis area, or are you expanded in other markets as well?

Alec Neu (03:38)

Yeah, great question. we’re in, ⁓ we started in Indianapolis. We’re now in ⁓ Muncie. We’re in Anderson. We’re in Noblesville. We’re in ⁓ Fort Wayne as well as Fortville. So really the whole northern part of the state, I would say within a two hour radius of downtown Indianapolis is now where we’ve expanded to over the past really six months.

Michelle Kesil (04:08)

Amazing. And how did you get started as an investor?

Alec Neu (04:14)

So I got started and the founder got started or I would say the founder got started and started a neu real estate group about 25 years ago. He had started it and been running it since essentially for his own real estate holdings.

And now where Neu Real Estate Group has grown to, and now where we’re at here in 2026, we started this new phase of our business model probably about two and a half years ago.

Much of the Indianapolis market as well as other markets throughout Indiana.

A lot of the housing is older 1900s construction, which is where our team saw a void to fill. And the space that we’re in, which is called middle market housing, where you see say like a single family home, or you see a large scale apartment complex, we’re trying to fill that gap, which would be middle market housing, two to call it four to eight unit multifamily properties.

⁓ that we’re now building here throughout Indianapolis and Indiana as a whole. ⁓

Michelle Kesil (06:20)

Awesome. What has been like the biggest challenge or obstacle that you’ve experienced and overcome? And now looking back in hindsight, you can see the lesson.

Alec Neu (06:32)

I’d say the biggest obstacle we’ve been encountering is how fast we’ve been scaling. So our business model took off really fast. I want to say our first year we had…

built and sold probably 150 units, which if we’re building and selling 150 units, we’re actually selling them before it’s built. So our construction team got incredibly overwhelmed.

all at one point in time. And now we’re working on really expanding our construction team, expanding our scale throughout Indianapolis and then some of the other markets that I had mentioned like Fort Wayne, which is two hours north of downtown Indianapolis. I’m working to find contractors, subcontractors in those markets so we can then continue to scale outside some of those other markets that I had mentioned has been say our biggest

obstacle to date.

Michelle Kesil (07:38)

Absolutely. And what do you feel are some of the main keys that have made the biggest difference in allowing your business to be able to scale so rapidly?

Alec Neu (07:50)

I’d say the biggest key that’s allowed us to scale is word.

Like I mentioned, trying to fill that void with middle market housing. There’s not many other providers or developers, builders here in the Indianapolis area that are really filling that niche. So when you put an attractive business model out there, ⁓ especially in a growing market like Indianapolis, it’s allowed us to expand and get traction in a really quick or short amount of time.

Michelle Kesil (08:28)

Yeah, absolutely. And how is your team structured in order to support you?

Alec Neu (08:36)

So our team right now, I’m our company is fully integrated. We’ve got ⁓ a team that does site selection on the lands. They find ⁓ growing or desirable high growth neighborhoods ⁓ throughout those markets that we then go and buy that land and then work with. ⁓

We’ve got another team that works with these municipalities to figure out what the municipalities really want built there. And then from there, we’ve were fully integrated through our construction team and now working on being fully integrated through our property management team that now handles, I’d say right around 350 to 400 doors that we also own. So.

Michelle Kesil (09:29)

Awesome. When it comes to raising capital, what does that side of your business look like?

Alec Neu (09:37)

That’s a newer side of our business. We really just launched that, I’d say, within the past three months. So we’re still learning the ins and out of that,

of capital raising. We’ve had some early success in that. We’ve already raised $5 million.

within the past 30 days to build right around 150 units throughout ⁓ Indianapolis as well as in Muncie, Indiana,

is about 45 minutes north. There’s a university there called Ball State. So now scaling that side of the business is really the next challenge that we’re looking to knock down.

Michelle Kesil (10:54)

Awesome. What are you most focused on solving or scaling to next?

Alec Neu (11:02)

Yeah, I’m working on solving or scaling the number of markets that we’re building in, as well as continuing to develop deeper relationships with the municipalities that we’re already working with and just expanding our presence of neu real estate group all throughout Indianapolis and our mission on the void that we’re trying to fill with middle market housing as well as affordable housing.

here in the Indiana area.

Michelle Kesil (11:35)

Can you expand on how you’re working on the affordable housing?

Alec Neu (11:40)

Yeah, we’re working on the affordable housing right now. ⁓ Indianapolis is under supplied by about 37,000 units. It’s needed to be delivered to the Indianapolis market within the next 24 months. And if you go online, you check the number of permits that are needed ⁓ or already filed to try and fill that void. It’s very ⁓

underwhelming, you could say. There’s not enough construction, not enough units being delivered to the market to fill that void, which is where we’re trying to step in and build a community-centric product. Like I mentioned, we’re not building large-scale apartment buildings. We’re building something that’s going to jive with the community and be ⁓ well taken in by the communities that we’re building our product within.

Michelle Kesil (12:40)

Awesome. And what does that like, look like in terms of the types of developments that you are working on?

Alec Neu (12:48)

Yeah, great question. So we’ve got really three different models that will build either individually on what I would call a one-off scattered or infill lot, which is where our business started.

ground up from, which is in the Indianapolis market. were building two duplex products and a quadplex product. So our duplex, one of our duplex products, we call it a budget duplex. It’s a two bedroom, two bathroom duplex model. We’ve also got a larger duplex model, which would be three bedroom, two bathrooms.

And then we’ve got a quadplex model, which would be four units under one roof. All four of the units are two stories. They essentially look like townhomes. So that’s a two bedroom, two and a half bathroom model. And then we’re also building that to scale.

in communities, which would be 25 to 150 unit communities where we just build that product in larger tracks.

Michelle Kesil (14:01)

Awesome. And are there any specific challenges or hurdles that you’ve overcome while creating this new solution?

Alec Neu (14:11)

I’d say some challenges we’ve overcame have been just not knowing what we know now.

So with construction, with working with different cities, different cities have different codes or different ways of viewing products. We’ve had challenges. We’ve had ⁓ constructions stalled for on some projects for like four to six months, which can definitely hurt you from a holding cost perspective.

But

I would say a lot of the challenges that we’ve faced thus far, we’ve been tackling head on and working hands on with whoever’s brought that challenge up, whether it’s the city, whether it’s contractors, whether it’s capital investors that are, ⁓ say, looking for better returns or different markets that we’re not currently in.

Michelle Kesil (15:59)

Yeah, absolutely. And what are some opportunities that you’re looking forward to taking advantage of in this upcoming year?

Alec Neu (16:09)

I’d say the biggest opportunity we’re looking to take advantage of is what’s currently gone on with ⁓ non-occupied owner housing here in the state of Indiana. I believe it’s also happening from a federal level with regards to ⁓ property tax assessments on non-occupied owner housing. ⁓

This bill was really passed for municipalities to be more progressive with development and working with builders to put more ⁓ supply online for rental housing. So we’re excited to tackle that obstacle and build deeper relationships with cities and work much more hands on with them to. ⁓

establish, I would say, a better supply of rental housing in each of the markets that we’re already building in.

Michelle Kesil (17:12)

Yeah, awesome. And when it comes to like finding the best opportunities for deals and leads, is there any like strategy that you found works best for you?

Alec Neu (17:28)

Yeah, would say our best strategy that we found, again, has been working with a lot of cities hands on. A lot of the cities that we’re in, they’re already pretty progressive with growth that they’re looking to.

to bring to the market, whether it’s on a housing basis or a corporate investment basis, just creating more jobs within these markets. So our biggest advantage has been partnering with cities, learning about what they’ve got going on, whether it’s a 10-year plan or 25-year vision that they’re looking to put into effect over the next 10 to 25 years on their cities and how we can establish a long-term partnership with them. ⁓

to be right alongside them. They’re growing as we’re growing, as we’re both ⁓ mutually benefiting from that growth.

Michelle Kesil (18:26)

Yeah, absolutely. And when you say like relationships with these municipalities and cities, how do you form those?

Alec Neu (18:36)

So we’re meeting with a lot of mayors within the cities. We’re targeting cities that aren’t.

call it too small. They don’t have a population less than 10,000. They also don’t have a large population, say over 60,000 that are living within these cities. So we’re meeting with the mayors of these cities. We’re leading with the economic councils of these cities or the land entitlement or land development committees within these cities and seeing where they’re seeing the growth within the neighborhoods of those cities to where we can fill that void, whether it’s

developing within those neighborhoods that are growing, whether it’s like say the north, the east, the south, the west side of those cities and trying to establish ourselves as a good housing provider within those cities.

Michelle Kesil (19:37)

Yeah, absolutely. And when you are working on developments, is there any sort of criteria that you kind of look for in terms of finding the right area or,

Alec Neu (19:56)

Yeah, absolutely. We’re looking to build alongside a lot of the corporate investment or corporate development that’s going on along each of the markets that we’re building within. All that really means is this corporate investment or development is happening within these markets. There’s going to be a level of job creation, whether it’s workforce housing or high paying jobs. So us not only establishing relationships with these cities, but also establishing

relationships with say housing providers that work specifically within the corporations, ⁓ especially foreign national corporations that bring workers from overseas or out of country in to work at their, whether it’s their factories or ⁓ whatever it may be, ⁓ establishing those relationships with them.

which we’ve already done in a handful of markets that we’re already building in, has been pretty fruitful.

Michelle Kesil (20:57)

Is there any advice you have for people that are new or in this industry and are just starting out?

Alec Neu (21:05)

Yeah, would say if you’re newer within the industry, reach out to anyone that you can find, whether it’s on LinkedIn or Facebook or Instagram. It’s already within the industry, within the real estate industry, and learn from them. Reach out to them, pick up the phone, call them, email them, text them.

can call me, email me, or text me. I’m always available to answer or help any novices that are looking to dip their toe in the industry and ⁓ help accelerate the growth in whatever capacity that I can or say with whatever capacity, whatever real estate veteran you reach out to can help you with.

Michelle Kesil (21:53)

Well, before we wrap up here, if somebody wants to reach out, connect, learn more, where can people find you and connect with you?

Alec Neu (22:01)

You can find us on any social media platform, Facebook, Instagram. I want to say LinkedIn as well. We’re still working on growing our presence on each of those platforms, but you can find us by searching Neu Real Estate Group. It’s N-E-U, not N-E-W. So don’t get it mistaken. You can also go to neurealestategroup.com and reach out to us directly there ⁓ as well.

Michelle Kesil (22:30)

Perfect. I appreciate your time, your story and your perspective. Thank you for coming on.

Alec Neu (22:36)

Yeah, I appreciate it, Michelle. Thanks for having me on.

Michelle Kesil (22:39)

And for the listeners that are tuning in, if you got value, make sure that you subscribed. We’ve got more conversations with operators like Alec who are building real businesses and we’ll see you on our next episode.