30A investment lot to build STR

[Ricardo Hidalgo]

Investment Info:

Single-family residence other investment.

Purchase price: $177,500
Cash invested: $37,598

Appraised for $44,000 over purchase price. We will be building an STR creating a 370k equity position or 450k equity position that will generate 55-60k a year or 75-80k a year. Hoa will let us know if we can build an 1100 square foot or 1500 square foot home.

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

Lots are undervalued with high rates since building requires more upfront capital but due to 30A high appreciation and median price point of 2.5 million, we are focusing on an entry point of 850k to 1 million for resale since its affordable for the area. We will be holding 55-65% equity position once the build is completed and will be cashflow positive even with current rates. 

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

MLS and slowdown of market

How did you finance this deal?

Commercial loan

How did you add value to the deal?

Got it under value and exploring different floor plans to maximize value and rental return

What was the outcome?

Passing plans with HOA.

Lessons learned? Challenges?

Study comps and cost to build plus interest and fees of the loan.

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

I am a real estate professional