New construction....with a prehab twist

[Rashad Nelson]

Hi all, 

My fellow BP members, I wish to gauge feedback and interest involving a certain strategy that I'm looking to implement in regards to new construction here in Atlanta. In a nutshell, instead of building a fully finished product to market to owner-occupants, I would build simply an empty, enclosed shell - complete with a laid water / sewer line, slab foundation, framing, roof, exterior doors, windows, and concrete landscaping - and market that product to other investors who to wish to complete the house using their desired finishes. Very similar to a full renovation, only an investor/buyer would hire an engineer to verify inspections with the municipality to ensure they've been completed as part of their due diligence, in addition to verifying the ARV. I would sell the property to an investor for about $125K, they put another $90K worth of renovations to complete the property, and make the sale for a good $275K sale price. Their true profit of course would depend on closing costs, whether or not they use a GC, whether or not they use financing, and how aggressive the financing terms (private money vs. bank financing vs. hard money).

Thoughts?