All Forum Posts by: Dwayne Jones

I’m a builder/developer in Memphis, Tennessee trying to rebuild the inner city. Currently we have several vacant lots via individuals, land bank, and tax sale. I have one bedroom and two bedroom cottage home plans for sale with a lot of people interested in purchasing. The houses range from 280 sq. ft. to 832 sq. ft. Low income, service workers, millennials, live in place etc. I have two models (both 480 sq. ft. one bedroom one bath) 90% complete but there hasn’t been any new construction in the area for years. Before I started construction I tried to get an appraisal based on plans and specs but no appraisal would give me a value for a new 480 sq. ft. home in the inner city. The cost of new construction is what it is and shouldn’t be compared with existing houses. They also have an issue with using larger new home values in other neighborhoods. Any suggestions on creating fair comps?

@Jack Inman great idea and I had considered rent to own or lease purchase options but I haven't been able to secure construction loans because of the small loan amount at 80% of LTV. So, I'm all in cash on these two small homes. Also, if I created notes and sold them for a discount there wouldn't be any profit. I need to pull my cash out of these two in order to have proof of concept and a track record for future comps.

@Travis Biziorek that’s why I’m pushing homeownership initially. I’m projecting once the program gets traction and expands to two and three bedroom the comps and values will be better for investors as well. I will definitely reach out when I come to Detroit in the spring. I posted two pictures above also.

@Travis Biziorek I’ve been planning to visit Detroit because of the Tiny House project by Cass Community. Also, I have relatives and I’ve looked up lots and there are definitely plenty. The projected rents are $600-$700. A mortgage for purchase is projected at $387-$480 depending on credit.

@Travis Biziorek thanks! I have a few investors looking at purchasing for rentals (buy and hold). Not many one bedrooms in the area and definitely no new construction in the area.

@Andrew Postell thanks for your feedback but I’m not a new developer. I’m going into a new market with smaller homes. I currently have homes 2200+ and some 1200-1500. The city of Memphis has a need for smaller, energy efficient, and affordable housing but no one wants to be first to invest or develop the inner city. I grew up in the inner city and taking a leap of faith along with some business risk to make this project happen. I agree cash buyers would be good but right now no one wants to be first. I plan to have an open house on January 10th. Again, thanks for the feedback.

@Andrew Postell

I’m a builder in Memphis, Tennessee with two 480 sq. ft. one bedroom one bath single family homes built on concrete slabs. I have one 480 sq. ft. permitted and two 280 sq. ft. homes permitted and ready for construction. My goal is to sell these homes but no new construction has occurred in years and the size makes it difficult to get comps. The goal is to sell the 480 sq. ft. homes for $65k and the 280 sq. ft. for $45k. Currently, I have several people interested but none are qualifying for local bank financing with downpayment assistance. Needless to say I have a lot of interest in renting but I need to get my cash out of the two houses under construction and create comps for future sales. Any deal structure advice would be appreciated. *note: the Memphis real estate market is still low so our values are behind other values nationwide including nearby Nashvillle. Also, plenty of inner city lots but few investors/developers/contractors are willing to build new homes.