All Forum Posts by: Keith Bloemendaal

Hey guys/gals,

It's been awhile since I have updated, sorry about that. So much has happened since April! 

First of all, this home is almost complete, and is going under contract for $367,300 today. Some pics below of the home now. 

Numbers:

$367,300 Sale Price

$91,500 lot

$195,000 building/loan costs

$18,365 R/E commission

$5k closing costs

$57,435 estimated profit. (still a few things to complete on home) which is roughly 15%. Not bad for my first build! 

I also have 4 other homes started now (one just starting this week), 2 of which have already sold. One at $370k, the other is at $420k and climbing. I also put 4 more lots under contract, which have now increased to $100-$105k, so that as soon as a home goes under contract I can replace it. Trying to keep 3 specs going at all times.....

Those number are going to be different in different areas. 

My land costs $50-55 per square foot of finished house. While we are at $210 per foot sales price, other areas around here are well under $150 per foot. Construction costs can vary heavily based on what finishes you are putting in the house and the design of the home, ie: it's far cheaper to build up than out. We hover in the $100-110 range on our homes. Also my soft costs rarely hit $20k. 

In the $180-220k range, I suspect your margins will be much lower than in the upper ranges. I build in the upper $300k to low $400k (1800-2k') and get 13-18% profit margin. I know builders that are happy with getting 5%, it's all market driven though....

$120 per ft seems extremely high for multi family in this area, a couple of years ago I built several fourplex buildings for around $60 per ft. Affordable housing isn't going to have granite, wood, tile, etc.. It is basic finishes. 

Get a good realtor, maybe wait until drywall to list, but get a good realtor. It will cost you more than the 5%-6% (I pay 5% as a spec builder) if you try to sell on your own. 

My homes are in the mid $300k to low $400k and I require a non refundable builder deposit of $10-$20k, plus 100% of any upgrades paid up front. Period. 

It takes 3-6mos minimum here, I can't imagine taking 12mos or more to create a development, market changes too much to take that sort of risk! 

@Daniel Do you not have to do stormwater to get plans approved?

So, are you pitching for investors here or telling us about how you are putting the deal together, like a "Diary"

If it were me I'd call my civil engineer for advice/pricing to subdivide. There could be issues like stormwater that would need to be addressed (this is usually the biggest hurdle for me when developing). 

 You didn't say that though. 

 I would never build a home under those terms. 

 I am looking at having the first one completed end of May, you are more than welcome to come see anytime!