First New Construction

[Blake Schreckhise]

Investment Info:

Single-family residence other investment.

Purchase price: $160,000
Cash invested: $1,000
Sale price: $209,900

This happened to be another accidental money maker. We actually bought land and built a house with the intention of staying there for quite a few years. Life happens of course and we decide to move after living in the new house for about five months. It ended up being a great sale and profit so can't complain too much!

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

Working with the builders as they built spec homes. They offered to build a custom home for myself and at the time I had intentions of doing further work with them. Thought this would be a good way to get started since I could more easily finance for my personal house.

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

I bought the land from a fellow Realtor that I have a good relationship with. He had just bought over 300 acres and I needed a small tract so he split me off six acres and there wasn't much negotiation he made me a good deal at $18,000 and I took it.

How did you finance this deal?

I had an in house loan for the majority of it, but being a self employed real estate agent lenders don't like to count your income very well. Had to get a loan from a friend for the difference. Was going to pay him off with the refinance but since we sold paid him off then.

How did you add value to the deal?

My wife made the floor plan and made all the design choices that made it sell so quickly. I just made sure we stayed on track with the contractors.

What was the outcome?

Very little money in up front and after fees and everything we walked away with over $40,000.

Lessons learned? Challenges?

Be much more specific with your expectations up front. We are easy going but a lot of issues could've been avoided if we just had a clearer plan from the beginning.

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

I'm my own real estate agent, so definitely recommend! The builders T and R Construction in Johnson County AR are excellent builders.