First development deal

[Jackson Boyer]

Investment Info:

Single-family residence other investment.

Purchase price: $400,000
Cash invested: $2,600,000

Montana single family home. Would like to hold the property long term as a rental.

What made you interested in investing in this type of deal?

Upside in the area is very high. Close to skiing. Huge development in the surrounding area. Strong comps.

How did you find this deal and how did you negotiate it?

Looking for land all over. Found a lot I thought was unusually inexpensive compared to surrounding homes. 99 year old entrepreneur owned the land and many lots around. Thought I would be able to make friends and get a deal. Lot sat for 6 months. Ended up negotiating with his 4th wife. Got abused and they came off the price 5k. Year later the lot tripled in value and I thought developing made sense.

How did you finance this deal?

Cash and a construction loan. First time developer so the bank ended up making me take on a higher limit than I was projecting. I am not done yet but my numbers are turning out to be more accurate.

How did you add value to the deal?

Design and being hands on. Stepped away from my software career to focus on the project full time. I have been involved in every phase. Pulling wife, nailing off trusses, concrete forms. You name it, I have touched it. Today I have moved in 200 sheets of drywall.

What was the outcome?

TBD.

Lessons learned? Challenges?

Don’t sweat the small things. Everything takes longer. Labor is difficult to find and harder to keep. Quality isn’t guaranteed, but helps if you are on site everyday.