Flip or Raze Durham

[Greg Gibbs]

Long time lurker first time poster! I just purchased my third IP in Durham NC. It was a foreclosure, 900 sf 3/1. I had planned to flip into a more usable 2/2. The area is just a mile from some of the hottest parts of Durham. There is probably 80k of upside in the flip.

Alternatively, Durham is very friendly to options that increase density and affordability. I could certainly get a duplex or even a triplex on this lot and use as LTR #3/4/5 for us. 3 brand new units has its definite benefits.

I’m a newly minted GC with past residential construction experience, both new construction and rehabs. Our plan was to flip a few to get more capital and eventually end up with 10-12 doors.

Is there anyone who has done the same tear down and replace? The numbers seem to work from my napkin projections at a build cost of $90/sf.

[Greg Dickerson]

Originally posted by @Greg Gibbs:

Long time lurker first time poster! I just purchased my third IP in Durham NC. It was a foreclosure, 900 sf 3/1. I had planned to flip into a more usable 2/2. The area is just a mile from some of the hottest parts of Durham. There is probably 80k of upside in the flip.

Alternatively, Durham is very friendly to options that increase density and affordability. I could certainly get a duplex or even a triplex on this lot and use as LTR #3/4/5 for us. 3 brand new units has its definite benefits.

I’m a newly minted GC with past residential construction experience, both new construction and rehabs. Our plan was to flip a few to get more capital and eventually end up with 10-12 doors.

Is there anyone who has done the same tear down and replace? The numbers seem to work from my napkin projections at a build cost of $90/sf.

 Let the numbers guide you. You need to take into account the time value of money associated with each project. Calculate the value of the cash from the flip reinvested and compounded vs tying it up in the longer term play.