1st new construction spec house!

[Tyler Nicholls]

Investment Info:

Single-family residence other investment.

Purchase price: $10,000
Cash invested: $126,180
Sale price: $220,000

Purchased a vacant lot in a Downtown Development Zone and build a new, single family home. The home sold before framing was completed. It was a 4 bedroom, 2 bath 2-story home. In addition to $60,000 profit from the build, I received 20% of the hard building costs back from the county in the form of a grant.

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

A friend offered the lot to me well below market value. I had never built a new house before but did not want to turn down the opportunity.

How did you finance this deal?

I used a line of credit from some rental properties to finance the build

What was the outcome?

Around $70,000 in profit and a lot learned

Lessons learned? Challenges?

I learned that the prep work to get drawings, permits, variances, site work done ect. takes a lot longer than fix and flips. About 2 months getting permits together before work could even begin.

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

I am a licensed real estate, so I marketed the property myself.