First Development Deal... Am I being overly ambitious?

[Jordon March]

So, I’m considering buying about 3 acres of land for $1.6 million. The seller is open to seller financing for less than a year, but would want at least $500k down and non-refundable. Demolition would be about $100k and $200k for street/utilities/etc. We could fit about 10 lots at about 0.3 acres each, which would probably sell for $200-250k. I’m thinking of looking for a hard money lender to try and make the deal work. Do you think the potential profits are worth that added risk of getting an expensive loan like that? Also, do hard money lenders go for those types of deals?

[Chris Youssi]

What am I missing? 200K x 10 = $2,000,000

1.6M + 100K = 200K + 1.9M 

This gives you a 100k profit which is absurd - other ? is if its such a good deal why does the seller not do it themselves?

Your ROI gives you a paltry 5% which does not even cover your interest expenses . Do not Run SPRINT from this deal. I only do Development deals if I can make a minimum of a 50% ROI