From Raw Land to Sold House = $100k profit

[Sandra S.]

Investment Info:

Single-family residence other investment.

Purchase price: $81,000
Cash invested: $350,000
Sale price: $495,000

Purchased 1.5 acres of raw land and added well and septic along with 2100sf 1 story house. Listed and sold in 5 days. Net profit approximately $100,000.

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

Well draining soil, flat topography, only 10 minutes from home. We have a hot sellers market, so I was confident I could sell it quickly for a good profit. I added a detached shop to make it a sure thing. In our area, that's an important add.

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

Listed on the MLS for 1 day and I pounced. I know this area and knew the price would work for me. I was competing with one other agent and my offer was chosen because the agent knew me and liked me.

How did you finance this deal?

Paid cash for the land (from a previous land/build/sell deal), then used home equity lines for the build.

How did you add value to the deal?

Added a detached shop. A big seller around these parts.

What was the outcome?

Netted about $100k. Turn time a little over a year.

Lessons learned? Challenges?

The builder is a turn-key outfit where they offer plans to choose from and very little customizing. It works well as a system, but their subs did a bad flooring job and it soured the deal a little.
Building the shop was a risk but paid off bigtime. Permits took about 5 months, which was excruciating. I seem to underestimate the time it'll take to actually start the build.

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

I am a Realtor so I listed it myself.