Northern Liberties Philadelphia Luxury New Construction SFH

[Douglas Gratz]

Investment Info:

Single-family residence commercial investment investment.

Purchase price: $360,000
Cash invested: $1,050,000
Sale price: $2,200,000

Building a luxury SFH in Northern Liberties. 5800 sqft, 4bed/4baths , 2 car garage, roof deck with city line views

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

It was a once in a life time oppurtunity to buy a piece of land for 360,000 with a market value of $600,000. I have always wanted to build new construction and believed that this was the one to start my first new construction. Northern Liberties Is one of the most sought after places to live in the City of Philadelphia (Downtown) Instead of just flipping the land, and making 240k, I decided to build so I could make a profit of around $600,000. Homes like this have been selling in one day!

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

An good friend of mine, her parents owned the land. I met her in 2014 and when I picked her up for the first time I saw this land which was then , their backyard. I said then, when ever your parents want to sell, please come to me first. Come 2021, I got the call and jumped on it!

How did you finance this deal?

Hard money loan at 9% and 2 points

How did you add value to the deal?

I built on the land.

What was the outcome?

To be determined and updated once completed

Lessons learned? Challenges?

1. How to subdivide land
2. Zoning codes
3. How to use an architect to get building plans and zoning permits
4. How to building luxury homes that you need to use an agent or a team of agents who specialize in selling high end homes
5. Challenge 1, finding a lender to lend large sums (2.2 Mil)
6. How long it takes from inception to getting building permits
7. I learned the whole process of new construction from start to finish
8. What kind of insurance I needed

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I used TAM lending and Direct Loan Mortgage Co for hard money

I am using Mathew Millano as my agent but had the opportunity to use the McCann Team of Keller Williams

I am using Design Builders to build

I hired a consultant

[Cindy Cheng]

Congrats on the opportunity Douglas! I'm curious to know the outcome.

I am also looking to perhaps invest in a LTR (either townhouse or multifamily) Northern Liberties/Fishtown area. I am a bit concerned about crime and vacancy in the area and in all of Philly though. Do you see any of those being a concern today and the near future?