Percentage of Final Sale Price for Lot Cost

[Josh Gaddy]

I am looking for advice from someone familiar with infill residential development.

I am looking put a property under contract in a very nice established neighborhood in Charlotte, NC. This is one of the 2 or 3 highest priced areas in the city and houses are selling very well in this particular area. My intentions are to joint venture with a builder once I have the property under contract so that I can learn the ins and outs project management for a luxury house. I have already spoken with a few that would be interested in the JV. If that will not play out, I would consider just assigning the contract to the builder.

I have spoken with a few homebuilders and they have told me that, generally, they only like to pay 20% (MAX) of the final sales price (ARV) for a buildable lot. However, it doesnt seem like this is the case for an infill project.

Does anyone know what percentage of the final sales price a builder would want to pay for a lot as an infill project. Keep in mind that there is currently a house on the lot and this is an extremely nice part of town. I understand that this is a vague description of the situation but I was hoping to get some general comments.

Thanks for the help.[/i][/b]