Investment Info:

Single-family residence other investment.

Purchase price: $60,000
Cash invested: $287,000
Sale price: $440,000

This was my first real estate investment. I purchased a lot in SW Cape Coral for $60,000. Worked with a builder in the area for a profit share and built a 4bd 3 bath pool home for $287,000. Sold house for $440,000. After profit share my ROI was 11%. Now, In 1031 exchange for buy and hold properties.

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

I was trying to get into real estate investing for the past couple of years. I knew an investor who did a similar deal and had worked with this builder and I basically copied his formula.

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

Negotiating the lot was the best decision I made. The lot had a burrowing owl on it and therefore had been dismissed by several buyers/builders. After some inspection we realized we could build around the burrowing owl without disruption to his habitat during the winter months. Also, the burrowing owl nest was on the perimeter of the lot, which helped. This owl saved us probably 30K in lot price.

How did you finance this deal?

All cash from our personal savings.

How did you add value to the deal?

Buying a lot under price in a sought after neighborhood. Working with a builder that was willing to do a profit share.

What was the outcome?

We made 10-11% in ROI and it took us 15 months from purchase of lot to sale.

Lessons learned? Challenges?

Be more conservative with construction costs. We were 13% above our construction budget which could have been dire had we sold for less.