help! need advice on potential tear down and developer flip

[Laura A.]

I have an opportunity to buy a lot in FL (with house that needs to be torn down) that can be split into two buildable lots (it hasn't been split yet though). I want to flip/wholesale the lot to a developer.

I know the ARV for 3/2, 2000 sq ft brick houses in that neighborhood ($235,000 max), but I am having trouble trying to figure our my best possible offer for the seller because calculating "repair" costs really means I have to calculate the building costs, demolition costs, survey costs, septic installation costs, etc.

I'm a newbie to flipping. I need some guidance from someone who can give me some rule of thumb on the margin for builders on homes in that price range. Any other advice welcome too. Bring it on, please. :)

[Steve K]

Build costs will depend on where in Florida. On a house with a 235k exit value I'd pay no more than 15% of that value in land and that's making the pretty big assumption that you can sell a 1,750 square foot home for $235k.

By the time you incur all of the expenses to make these lots shovel ready for a builder there will be no meat on the bone unless you're able to buy somewhere in the $20-$30k range.

Even getting the zoning as a shared wall scenario isn't going to reduce construction costs enough to interest a buyer.