latest new build in Charleston SC what do you think?

42 Replies

https://www.flexmls.com/share/1O0R3/8WoodallCourtCharlestonSC29403

history.. lot came up in August on MLS for 150k multiple offers.. I used an escalator clause which apparently the competing agents had never heard of ... so long and short of it bought the lot for 161k

240 ish to build.. Local bank  financing at 1 point and 5.5 %

this is a little street in a really cool area.. I built the new homes across the street in the last two years.

first one I built sold for 450k  last year I sold the one next to it for 550k and this one I have on the market as you can see for 649k..  the first one we paid 75k for the lot  the next lot 110k and now this one at 160k.. Ascending market.

 

That is a really beautifully constructed home right down to the tiny details! Are you only interested in the Charleston market here in SC?

This is awesome!  Wow!  I would love to pull off something like this one day!  

@Jason Ellis   thank you Jason we are happy to be part of the community there..

I have a rock star GC who has made this all happen.  a great real estate team that procures the lots for us and then resells..

We are proud to be a part of the revitalization of Charleston and providing some cool housing.

I would relocate there and buy it just to be closer to Magnolias so I could eat there every night.

 Overall looks amazing maybe on the next one try a brighter kitchen instead of darker, maybe that’s just a personal preference.

@Jay Hinrichs this looks great! Very impressed you're able to build at 130ish a square foot. 

Hoping my Dingle project comes off as nice. 

Originally posted by @Jeffrey Stasz :

@Jay Hinrichs this looks great! Very impressed you're able to build at 130ish a square foot. 

Hoping my Dingle project comes off as nice. 

 on this one we did  on 7 new street with all the requirements there its almost triple to build.. but that one will have all sub zero wolf etc.. this one is just medium grade on appliance packages.

WE sold one of our new builds in North Charleston to the family that owns the company that makes the custom counter tops though.. so those are cool and we got good pricing..  you should check it out.. he makes some that are out of recycled glass and are real fun with all sorts of color mozaics.. and local to Charleston.

I LOVE, LOVE, LOVE that house!! I don't know how you can build for that price with those finishes. Are those engineered wood floors? Are cabinets stock or custom? That tile backsplash is to die for. What is height of house, it's hard to tell from photos, but looks high!! Are you on Houzz? If not, you should be; and post your projects there. and finally ... What is escalation clause? 

Congratulations. 

Originally posted by @Karen Margrave :

I LOVE, LOVE, LOVE that house!! I don't know how you can build for that price with those finishes. Are those engineered wood floors? Are cabinets stock or custom? That tile backsplash is to die for. What is height of house, it's hard to tell from photos, but looks high!! Are you on Houzz? If not, you should be; and post your projects there. and finally ... What is escalation clause? 

Congratulations. 

not sure on the floors we have been using real bamboo  and in our other high end home it will be heart of pine..

not familiar with Houzz

cabinets were ordered  counter tops were custom concrete though..

house is 4 stories and what makes it special is it will be the last one built that can be that tall in that area they changed the code right after we were permitted

Charleston is challenging you need the height to get the sq ft in the house that house is still only 1700 sq ft.. you have to build up out of flood zone in that area so you cant go under and first level has to be parking

so now you can only do two floors above garage.. and because the lots were created back when the US was created basically they are all tiny 20 to 30 feet wide 50 to 80 feet deep.. so it going to be interesting going forward.. basically going to be pretty tough to have anything over about 1500 sq ft.

Escalator clause is where you are asked for highest and best.. and your highest and best is 1k over the highest offer that comes in.. So the competing agents did not know what one was .. so they just do what they normally do and offer a set price.. I put my highest and best at 160k and or the highest offer they got plus 1k.. and I got it..  

Originally posted by @Karen Margrave :

@Jay Hinrichs Do you have a formula you use on your projects for a percentage you'll pay for lot in comparison to construction or market value of home? (I get asked that a lot, and when down in so cal there was no rhyme or reason to pricing, and land was so hard to find)

 you can use formulas when the product is under certain values

but when the homes go way up in value that all changes.

especially in CA.. were you may pay 2 mil for a bare lot in Palo alto spend 600k building a nice 2500 sq ft home and selling it for 4 million ... % does not work.

in our production stuff like we do in Oregon  were the end product is now in the 450 to 500k range  1/4 to 1/5 is what you need for land cost to keep your margin at 15% of gross or there abouts.. but many builders are only making 5 to 10% of gross if that , depending on where they get their construction money.

our Gresham project Lennar offered me 130k per finished lot  and we are selling houses right at 450k.. so they were paying top dollar but they build 400 plus houses a year in this market so their margins are much tighter and they are not carrying ANY dirt or land.. they only buy when they can go vertical GENERALLY speaking as I say this they have just gone into contract of a few parcels next to one I am in process of developing 160 lots on.. but basically that's how it works.

Originally posted by @Karen Margrave :

For some reason I'm not able to vote on your posts @Jay Hinrichs but thank you for the information, and the video, great job. 

@Mindy Jensen is it me, or something on site stopping me from being able to vote? I did earlier on other posts, but for some reason I can't vote on Jays

I think they may be black balling me... ????? 

Escalator clause. I learn something new every day!

Originally posted by @Chris Martin :

Escalator clause. I learn something new every day!

 If I impart some little tid bit that your not familiar with then that just made my day !!!  not many things get by you or you have not done or are familiar with.

Frankly though its a west coast process that we have used for decades.. I first saw it in the late 80s in Palo Alto when houses were being bid up 20 to 50k over ask..

in really hot markets on the west coast they are common.. but I think most of the deep south although great market competing offers and offers over ask is still somewhat rare.. and as stated the other agents had never heard of an escalator clause neither had my agents so I explained it to them wrote it out for them. so when they presented it to the listing agent it was clear what we were doing and of course end results I only pay 1k over highest and best.. got the deal and its a stone cold winner :)  but I was not going to lose it as we had as I stated build the other two on that little street..

here is a drone of it.. pretty cool

https://vimeo.com/263639790   

 

Nice work! Job well done to you and your whole team. 

Originally posted by @Jay Hinrichs :
Originally posted by @Chris Martin:

Escalator clause. I learn something new every day!

 If I impart some little tid bit that your not familiar with then that just made my day !!!  not many things get by you or you have not done or are familiar with.

Frankly though its a west coast process that we have used for decades.. I first saw it in the late 80s in Palo Alto when houses were being bid up 20 to 50k over ask..

in really hot markets on the west coast they are common.. but I think most of the deep south although great market competing offers and offers over ask is still somewhat rare.. and as stated the other agents had never heard of an escalator clause neither had my agents so I explained it to them wrote it out for them. so when they presented it to the listing agent it was clear what we were doing and of course end results I only pay 1k over highest and best.. got the deal and its a stone cold winner :)  but I was not going to lose it as we had as I stated build the other two on that little street..

here is a drone of it.. pretty cool

I am glad I made your day! LOL! 

Your post makes perfect sense. I don't buy much in hot markets (although I have sold (lately) quite a bit in hot markets;) I buy if I must, like if doing a 1031 exchange. But for sure I'll keep that (the escalator clause) in mind the next time I buy something that isn't part of a trustee sale.

Very impressive build. Interesting about the lot sizes and going vertical. At some point, I'm going to build a retirement pad on my lot on the Bay River (in NC)... but I'll be building small and low $/sq.ft. that will be nothing close to the grandeur of your Charleston builds!  (I'm thinking along the lines of Lynyrd Skynard's Simple Man. LOL!)

Thanks for sharing your work. And, yes, the drone is a nice tool. When I get my current project done, maybe I'll do a drone flyover of it... 

@Chris Martin   I wish I could have used escalator at trustee sales.. I just think of the times

I sat there.. especially this one bidder we called him Dollar bob.. retired dentist.

what ever the bid he bid BUCK over.. he would just say buck over.. it would go on and on and on.

I would have loved to tell the crier hey I will bid 500 over what ever the highest bid you get.. and then go have a cup of coffee :)

Originally posted by @Jay Hinrichs :

@Chris Martin  I wish I could have used escalator at trustee sales.. I just think of the times

I sat there.. especially this one bidder we called him Dollar bob.. retired dentist.

what ever the bid he bid BUCK over.. he would just say buck over.. it would go on and on and on.

I would have loved to tell the crier hey I will bid 500 over what ever the highest bid you get.. and then go have a cup of coffee :)

LOL! I hear you! 

When I started seeing buyers for AH4R and other hedge funds show up at trustee sales, along with the Asian buyers who didn't seem to be hedge fund related but would suck the oxygen out of the building with their dominance... man, I saw it was time for a change.

And I saw a few people bid them up! Crazy times. That was a few years ago and I have only been back to bid once since then. And a newbie Dollar Bob (man I love that phrase!) type guy pounded everyone with (remote) upset bids. Pumped the price way up... way, way past my capitulation point... on a mobile home near the Johnston county border that you could smell from 200 feet away. Man, I don't miss some parts of the real estate business. On the residential REI side, I think I need a correction to get me back in the right mind set;)

Originally posted by @Julie Marquez :

Ta-dah. Thanks for all the numbers here.

What was the length of construction? I already read about your awesome GC!

Julie

Lot  161k  escalator clause lot listed at 140k  3 offers highest and best I put my escalator in there for 1k over the next competing bid.. and I do believe since we bought and built the two across the st.. everything being equal the buyer knew we were capable and would close without heartburn

240 ish to build  1700 sq ft...  20k soft cost  capital tax's insurance  bring us in at about 420k...  if we sell full price at 650k  5% is  32,500  for a net of 617,500 -  420 k   put net profit in the 200k range which is 30% or so on Gross which in my world is basically un heard of.. ( West coast new construction that is)  .... either way.. great project thanks for pinging in on the thread.. Oh and start to finish little less than a year and cash out of pocket was cost of lot 160k  so little more than double money ..  

Originally posted by @Chris Martin :
Originally posted by @Jay Hinrichs:

@Chris Martin  I wish I could have used escalator at trustee sales.. I just think of the times

I sat there.. especially this one bidder we called him Dollar bob.. retired dentist.

what ever the bid he bid BUCK over.. he would just say buck over.. it would go on and on and on.

I would have loved to tell the crier hey I will bid 500 over what ever the highest bid you get.. and then go have a cup of coffee :)

LOL! I hear you! 

When I started seeing buyers for AH4R and other hedge funds show up at trustee sales, along with the Asian buyers who didn't seem to be hedge fund related but would suck the oxygen out of the building with their dominance... man, I saw it was time for a change.

And I saw a few people bid them up! Crazy times. That was a few years ago and I have only been back to bid once since then. And a newbie Dollar Bob (man I love that phrase!) type guy pounded everyone with (remote) upset bids. Pumped the price way up... way, way past my capitulation point... on a mobile home near the Johnston county border that you could smell from 200 feet away. Man, I don't miss some parts of the real estate business. On the residential REI side, I think I need a correction to get me back in the right mind set;)

My aha moment came in 2002 ish.. I was already morphing into HML from being 100% in foreclosure side.

but I went to a sale Opening bid was 80k which is about half of what our normal openers are.. little 3 and 1.5 dinger rancher.. ARV 180ish in those days... probably needed 15 to 20k to change out mechanical and fluff and buff .

so I am standing there and because of the low bid and the fact that northwest trustee converted to putting all the sales on their website.. ( which really blew it for us guys in the business)  there were over 30 bidders with qualify checks so at least 3 million in cash chasing a dinger that ended up selling with Maybe 10k of equity in it.. at that point I knew our great run was coming to an end and the days of picking off equity like we used was about done. 

@Jay Hinrichs

What’s the protocol if there are multiple bids with escalators? Whoever has the highest escalator wins? Highest bid wins?

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