Last year we purchased a property in Seattle with the intention of clearing the existing mobile home and building a 4 or 5 bedroom home to sell for a decent profit. We had a partner in Seattle to project manage the construction for 1/2 our profits. As things often happen, we never got out of neutral, spoke with a lot of people but the project stalled.
Long story short we have approx $220k invested in this parcel of land.
It will cost approx $350k to build a home.
New homes in this part of Seattle are selling for $700k+.
At this point options being discussed...
- Sell to another investor (local to Seattle)
- Add another partner with cash for construction financing and split profits 3 ways
- Manage the build ourselves, from cross-country and get a no-income check construction loan (not a great option)
We're pretty sure we'll sell the land to an investor but I figure put this out to the experts for your thoughts before making any big mistakes.
The number one reason investors lose money is contractor mismanagement. Do you really want to try to manage a build from a distance?
@Brett K. thanks for your thoughts. I appreciate all the input and will most probably sell the land to a Seattle based investor who can manage the construction locally.
It sounds like you don't have anyone who is guaranteed reliable. Or as Rumsfeld would say 'a known known.
Maybe you can increase your rate of return by offering to carry the land for another investor?
ok thanks, I'll update when we take the next step
A bit late on my follow-up.k.. we did not build and have the lot for sale.
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