All Forum Posts by: Siva Singh

Thanks Jason for the detailed feedback.

Will check with more contractors about construction costs.

Why is selling costs 7%? Most brokers around here charge 5%. Are there any other costs that I am not including?

As for financing costs, this will be a owner occupied financing as this will be the only house that I own. So I am assuing a rate of 3.5% for a 5/1 plus $10,000 towards closing costs.

What are land carrying costs? I will add insurance costs. How much do you think it will be for 2 years for such a construction project?

Thanks for the reply Jay Henrichs. If your friend bought it on the foot hill side, it must be big lot and hence the square footage must be higher and also construction cost in the hill side is much higher. My wife seems to confident of the construction costs. But will verify with more contractors.

Thanks for taking a look. 

My construction cost is $233 per sq ft. Yeah it is that high out here.

As for financing charges, I am taking a mortgage as a primary residence because I don't own any other house. For 5/1, I am getting APRs of around 3.3%. Even assuming 3.5%, that works out to $98,000 for two year plus some $10,000 for other fees.

My wife is an interior designer in Silicon Valley. She comes across a bunch of investors who buy old homes, rebuild it and sell. So we are wondering if we can take up that as a business. Here are some initial numbers that I am trying to workout. Let me know if I am missing anything.

Purchase cost of an old house on a 7,000 sq ft lot - $ 1,800,000

Architect Fees - $ 30,000

Other Soft Fees (like Permits) - $ 45,000

Construction (3,000 Sq Ft) - $ 700,000

Finance Costs(Borrowing around $1.4 m for 2 years - $ 110,000

as primary residence mortgage)

Selling Costs (5% of $3.3 mil) - $ 165,000

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Total Costs - $ 2,850,000

Selling Price - $ 3,300,000

Profit - $ 450,000

Are these realistic? These will not be realistic if you are from any other part of USA ;)

Anything that I am missing? Any costs that I can reduce?

My wife is an interior designer in Silicon Valley. She comes across a bunch of investors who buy old homes, rebuild it and sell. So we are wondering if we can take up that as a business. Here are some initial numbers that I am trying to workout. Let me know if I am missing anything.

Purchase cost of an old house on a 7,000 sq ft lot        - $ 1,800,000

Architect Fees                                                            - $     30,000

Other Soft Fees (like Permits)                                     - $     45,000

Construction (3,000 Sq Ft)                                           - $   700,000

Finance Costs(Borrowing around $1.4 m for 2 years      - $   110,000

as primary residence mortgage)

Selling Costs (5% of $3.3 mil)                                       - $   165,000

------------------------------------------------------------------------------------

Total Costs                                                                 - $ 2,850,000

Selling Price                                                               - $ 3,300,000

Profit                                                                         - $    450,000

Are these realistic? These will not be realistic if you are from any other part of USA ;) 

Anything that I am missing? Any costs that I can reduce?