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Updated over 1 year ago,
Some feedback on this deal would be greatly appreciated:) !
Hello!
I have a 60,000 sq. ft. lot with an old, outdated, and really bad house that needs to be torn down in order to build a new home. The seller is asking 400,000 for the house that sits on the big lot. If I demo the old home, split the lots into two 30,000 sq. ft. lots, and build new homes on both lots that will sell for 600,000 a piece is it worth the 400,000 asking price?
The build price of the homes will be around 230,000 plus 200,00 from purchasing the original home that will get demolished. This will put us at 430,000. Plus a holding cost of maybe 3,000 a month over probably 6 months is 18,000 as well as %3 commission on 600,000 is another 18,000. So 36,000 more will put us at 466,000. Let's say a closing cost of 2500 will take us to 468,500. Demo costs of the house will be around 15,000 and for any ballpark shenanigans that may arise setting an extra 20,000 to the side.
This will put us at 503,500 for the brand-new home to sit on the lot. The home is going to be most likely a 4 bed 2 bath home near the freeway and next to all the good spots in town, Costco and Target a mall are on the other side or down a short way on the freeway. The movies are in equal lengths away both ways it's in a prime spot. So even if the investor comes up 550,000 per house all said and done and I really if I ran my numbers wrong they can get at the very least get 20,000 in profit if they still only sell the home for 570,000 give or take because I know commission numbers can change.
Yes, it is a lot but I would very much appreciate some feedback on the numbers. This is a wholesale home and my fee is 5000 tacked along in there which may change my asking price. Houses based on comps nearby on small or big lots, around 2000 sq ft for the home and 4 bed 2 bath homes. If you are interested in the deal please contact me! I would be happy to sell it to a member of bigger pockets but if you are not here to buy some simple input would be greatly appreciated :)!
Thank you