Getting out is difficult!

[Rich Weese]

I haven't posted a thread in awhile. I think one of the last ones said I was retiring for real....Wifey and I decided to consolidate and move to The Villages in FL. We had 3 houses to sell, 4 cars, a golf cart and 5TH wheel. Got most of them sold. Here is my problem.

Money really does grow on trees. I just planted 3 fruit trees at my new home. If I water, fertilize, prune etc. I'll be able to pick grapefruit, oranges and tangerines off them for the rest of my life. Money trees are the same thing. If I do a few things, my money tree will prosper and I'll be able to pick money off forever. I have the formula, methods and experience to grow more trees. That is the problem.

If you aren't aware, The Villages is BOOMING-like a feeding frenzy with affluent people buying here. 50,000 golf carts and 45 golf courses-33 free for the rest of your life. There are 100,000 affluent people living here that want to play and spend money. It is projected togrow 20% by 2016. They're selling FIVE HUNDRED homes per MONTH! That extra 20% will require more support services of every kind. Restaurants, repair places, medical etc etc etc.

So, a week ago (March 9) on the front page of the Daily Commercial, the Leesburg FL newspaper says "wildwood: The next Boomtown". This little town is 100 yards from The Villages and has 7160 residents. The article says it will grow to 60,000 in 20 years. That is a 8 times growth. All the other little towns around here will do the same. That is the problem-Dang the money trees!

I know what Village buyers are paying and I know what I can build the SAME house for. I also know the price per square foot of each floor plan-don't ask me how I got them... I also know the subs building these. Sit down for this part.

The price per square foot is between 37 and $41 sq. ft. I know, not possible, but it is with a 75% profit margin without lot.

If I go just outside of the Villages, I can buy lots that are splittable and build the same house and sell for less and still make obscene returns. See why getting out is difficult?

Anyway, I just tied up 7 lots which will be split into a total of 12 lots for 80K. My builder will do all the oversight, I get my money back plus an obscene return and then we split the balance.

Dang trees! There are so many amazing things going on here in fun, activities, and opportunities.This is truly amazing and reminds me of other places I invested in over the past decades. Anyway, if your area has begun the slowdown, do some homework on my area. Your eyes will bug out at the #'s. Hope everyone is doing well. Rich

[Johnson H.]

@Rich Weese  - Congrats on acquiring the permits. Are you giving away a golf cart with every home purchase?

[Rich Weese]

Maybe a cheap one....

[Rich Weese]

it is about time to give a short update on the property here close to the villages in Florida. I did end up buying nine lots originally and split them into 13.

First, my disclaimer. I did not build for the price that I had originally thought I could build for for several different reasons. The villages already own their property and it is ready to build on. All the utilities or ran in the ground is relatively level and they start their actual construction.

The lots I bought came heavily treed and had to be mostly cleared. With this being my first entrance into property in this area I learned a lot about the subcontractors that I want to continue with and the ones that needed to be replaced. I knew in advance that I would have the costs to remove trees, dig a well, and install a septic system. I also did not take into account the size of my lot that I was building on compared to the average size lot in the villages. The first lot I built on was nearly 19,000 ft.². I should never have installed an irrigation and landscaping over the entire lot. Big mistake. I will also have motion sensors and cameras from here on out. Someone came in and stole all the copper wiring which required us to pay extensive additional expenses for new wire, new sheet rock repair, and new paint to restore it to new condition.

it also took longer than I expected to get permits, design drawings, and final inspection and meter installation. I expect to do much better on the second home and completed in a much more timely fashion.

The first home is sold and expected to close in one week. The multiple listing service will show the sale at $208,000. The listing agent already had a buyer lined up that was willing to pay the $208,000 but we had it listed at 220,000. He agreed to take 1% commission so our net was $206,000 less closing costs. I will have the final numbers within another week or so.

Our second home is already sheet rock and moving along much quicker. It is a little smaller since I wanted to test the market with two different sides homes. We have just recently cleared to more lots and have prepared the pad for spec number three. We have also been told that one of the larger builders in Florida, Adam homes, is also following me into that same area to begin building homes after the first of the year. That can be both bad news and good news. They will do a great deal of advertising which will bring additional lookers into our area. It will be up to me to build a competitive home at a competitive price. I am attempting to purchase more lots at the present time.

I believe my net will be approximately 30% cash on cash in a six-month period of time for an annual net return of 60%. I expect to do much better than that on the second home due to lessons learned and improvements made. I also anticipate it to be a total time period of approximately 4 months. If I can turn these in four months, my annual return will improve considerably.

More info soon.

Rich

[Karen Margrave]

Kaching!! Kaching!! Sounds like you got a sweet deal going there! Welcome back to BP, I haven't seen you on here for a long time, and have wondered what you were up to, though I thought you were relaxing on a beach, counting your money! Look forward to reading more of your deals. 

Also, did you see the new forum? Investor Deal Diaries? You might want to put your next house on there. See you around Rich. Congrats! 

[Rich Weese]

hi Karen,

I'm not really aware of any of the new forms. I just don't spend much time on bigger pockets anymore. I do try to reply when I mentioned in a forum thread and I certainly still reply to e-mails I receive. I will try to find investor deal diaries and take a look at it. Merry Christmas to you and your family.

Rich

[Rich Weese]

Karen,

Where is this new forum you speak of?

[Rich Weese]

Originally posted by @Rich Weese:

hi Karen,

I'm not really aware of any of the new forums. I just don't spend much time on bigger pockets anymore. I do try to reply when I'm mentioned in a forum thread and I certainly still reply to e-mails I receive. I will try to find investor deal diaries and take a look at it. Merry Christmas to you and your family.

Rich

[Siye Baker]

Originally posted by @Rich Weese:

Our second home is already sheet rock and moving along much quicker. It is a little smaller since I wanted to test the market with two different sides homes. We have just recently cleared to more lots and have prepared the pad for spec number three. We have also been told that one of the larger builders in Florida, Adam homes, is also following me into that same area to begin building homes after the first of the year. That can be both bad news and good news. They will do a great deal of advertising which will bring additional lookers into our area. It will be up to me to build a competitive home at a competitive price. I am attempting to purchase more lots at the present time.

Rich

Sounds very exciting! Strategizing is definitely one of your strong points. I suspect that you will be turning the arrival of Adam Homes into an opportunity. Thanks for the update, and keep us posted!

Sebastian

[Jon Klaus]

Hi Rich, good to see you back. Here is the link to

Investor Deal Diaries

[Karen Margrave]

@Rich Weese 

 Here you go! Investor Deal Diaries

[Rich Weese]

Thanks Karen.

Rich

[Rich Weese]

Just an update. A couple e-mails asked about this so I'm posting here.

We continue to improve on our costs and also the length of time to construct. We just closed on a home at 8500 S. E. 158th Pl. in Summerfield. This is just a few hundred yards from where The Villages ends. Took too long to build and move. This home was listed and sold through the MLS for $205,000 with a 4 1/2% commission. We had to completely clear the lot, provide a septic system, install a well, and add a completely covered and screened in Lanai. Including the above AND the lot. The total costs were $134,000 with a net of $192, 701.95.

This was a nice profit but took too long. Building 2 more at present. Current one will be completed in 90 day construction and a little nicer and bigger. Listed at $239,000 so should have a nice return. Other one is couple months behind. I could build more at a time, but don't want to get caught with pants down when correction comes.

These are all block homes with trusses and built for cash.

This continues to be a fantastic place to live and invest.

Rich