All Forum Posts by: Account Closed

@Khaled Helmi, the best advice I can give (although you may not like it- I know I didn't) is to get (or find one for bidding and vetting purposes) a set of plans you're happy with and a list of specs and bid it out to different builders/subcontractors.  We build homes from 350k up to 1.4 million.  These homes range in our build cost so much, yet we use the same lumber, framing crew, sheetrock crew, painting crew, subs, etc.  Where we spend different amounts of money is the fit and finishes (windows, appliances, counters, tile, cabinets, fixtures, etc).  Also what can drive up the cost of the house is your architect- some love to place french doors everywhere, cantilevered porches that require extra structural, etc.  We're building 2 high end homes side by side right now and due to architect, one home will come in around 10 dollars/ per foot higher build cost than next door.  Cabinets and counters alone will be about 5 dollars/ ft more than next door due to his design.  That small of a variance can really add up on a 5,000 sq ft house.  These are things I believe people don't take into consideration when they ask for a quick ballpark price per ft.  Let's say you build 2 separate 3,000 sq ft homes- one of them has 4 beds, 2.5 baths and a ton of flex space, game room, etc.  The other has 4 beds, 4 full baths.  Same sq footage- obviously 1 will cost much more to build though, right?  

To answer your other question, our multi was a little less per ft to build.  Less windows, siding, exterior paint, concrete per unit was used.  That being said, we spent a lot of money on the firewall which drove up our framing cost.  

@Alex Franks, sounds like you're killing it.  Thanks again :)

Way to go @Bryce Davis.  I think selling in this case is the right call, and I'm glad you are happy with the price.  Do you have something to 1031 into?  Or are you going to pay the gains on it simply?  I'll let you know my appraisal when I get it back :)

@Ethan Epps- yes, anytime we can divide the land and development cost amongst more for-sale units, we can increase profits.  

@Jon Klaus, good to hear from you Jon!  And good to hear you're still rocking it in Texas!  We were visiting family in Dallas a few weeks ago, and it's booming out there!  May was terrible here, but June, July, August have been awesome.  Hoping May was a strange, seasonal blip.  How's your market?

@Angelo Martinez, not sure I understood your question.  I target properties where I think we can create a higher and better use.  Either subdividing an existing lot and creating an extra lot and for-sale house out of it, or townhomes, etc.  Is that what you're asking?

@Alex Franks, thanks Alex.  I know this is nothing like what you're doing though :)  House took 6 months to build, and townhomes took 7 and 1/2 months.  I attribute it to having to  learn new skillsets (such as firewalls) and the market in general.   We're small and our subcontractors are small and stretched to the max.  

@Deb Jones, thanks, didn't know you were that close!  Would've been happy to show you interiors in person :)

@Alec Sithong, thanks!  We used 505 designs for townhomes and Ashley J designs for the single family.  Although I'll say I was VERY hands on for design aspects.  

@Mario Brown, good eye!  This was Plaza Midwood.  I've built several in the area if you are familiar.  

@Walker Clark, thank you!

@Frederick Walker, thanks Fred!  What have you been up to lately?

Below are photos of our latest speculative development deal.  This was a parcel I purchased for 250k in Charlotte, North Carolina.  I was able to subdivide into 2 separate lots (one of which further approved to have a 2 unit building on).  In essence, I got 3 for sale units in a hot neighborhood I like to build in, and this was my first time attempting townhomes.  We sold the 2,200 sq ft house for 570k.  The 2 townhomes (around 1850 sq ft each) sold for 454,000 and 447,500.  When we designed the 2- unit building, I really wanted an asymmetrical feel to it so it didn't look like a duplex.  Learned a ton in the process!!  Interior pics are of one of the townhomes staged below.  

@Troy Knight, Is there anything we local investors can do to help get you guys out of these projects?  Feel free to private message me if you prefer to take this offline.  

Good luck, I'm about to have an appraisal done on an office building on 36th St in NoDa so it'll be fun to see where we both end up.

I think the concern is you say your alternative is to pull the equity out, but you'll need an appraisal to do that.  I don't see an appraisal coming in valuing this nearly as high as you are or these developers are.

Nobody is forgetting that.  It's certainly a great option if you don't want to create another deal and you believe in the long term value of the property.  Personally, I don't love that area.  Sounds like this developer really wants the property so to them, it's valuable and they're willing to pay over market.  If they pass, what is it realistically worth to normal folks? I don't know your exact address but I think 400k sounds high. Remember the saying- pigs get fat and hogs get slaughtered.  Either way looks like you're in an awesome position and I wish you the best of luck!

Thanks for the mention @Don Harris.  

@Bryce Davis, you asked for expert advice, but unfortunately in this case, everyone will have an opinion, but nobody will know absolutely what is the correct way to go.  I think it depends on your cash availability right now, ability to find deals in today's market, what you think will happen to the value of your property after neighboring development (could increase actually, or as the picture shows, could be a negative), etc.  Personally, if someone wants a property in my portfolio more than I value it at, I say sell and use my skill set to create new deals.  Every rental is a chess piece in my opinion.  Something else to consider, these developers will be flexible on your timeline if you want to defer taxes with a 1031.  If I were you, I'd take the money and start looking for the next investment and don't look back.  :)

Thanks for the feedback everyone.