Construct 2 duplexes or 3 SFRs??

[Ryan Walker]

I have a client who owns an East Austin lot that's just over half of an acre. He is planning On subdividing this lot into 2 lots, so that he can build and sell 2 duplexes. The lot is only large enough to build 2 duplexes, but he could subdivide the lot into 3 parcels and build 3 SFRs. Running the comps and costs associated for each I estimate the duplex option would be roughly $20k more profitable than the 3 SFR option. It seems to me that there are extra risks associated with the duplex option as he will have slightly higher construction costs, a slightly less desirable property, and 1 more unit to sell. Is the projected additional $20k in profit (total profit projected to be 200k) worth it?