Trying to help my bro with his problem

[John Matveyev]

Hey Guys,

Here is the situation:

My older brother who doesnt really know much about investing or real estate WAS trying to sub-divide his property to build a spec home and sell. He invested about $25k and did not complete the process due to financial problems.

When the housing bubble burst he was literally screwed! he is a general contractor who only makes enough to pay for mortgage and bills. So im trying to think outside the box and find a way for him to make this work.

He needs another $30-$40k to get the lot ready for construction. He can not sell the lot yet and he doesnt have the money to finish what he started.

The lots in the area sell for $90k-$120k, its about 8,000 sq.ft.
and homes are in the $300k-$350k range.

It would take him and crew 5-6 months to build a nice home on the lot.

He has great credit, 750-780 but banks wont talk to him because he is self employed.. I have already loaned him money to keep him from going under..

If he can get this lot ready to sell or build, then he would be in a better situation.

Anyone have any suggestions or ideas?? we were brainstorming and didnt really come up with anything..

Iv been reading this forum for awhile and LOVE IT here! Its great how there are so many experts here willing to share their knowledge!

Thanks,
John

[Brian Levredge]

50-65k seems like a lot of money just to get the site ready to build. Are these permit fees, lot improvements like grading, or building an access road/driveway on an easement, or both? I'm a GC as well and have specialized in new construction. I just don't see how you could have to invest that much on such a small parcel unless you have plans in place and those are permit fees, which still seem exorbitant. Furthermore, land is typically 20% of a home's value. I would be absolutely certain on those values you listed because that is lot of money to spend just to break even or make 5k.