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Douglas Gratz
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My New Construction Journal From Start To Finish

Douglas Gratz
  • Rental Property Investor
  • Philadelphia, PA
Posted Apr 30 2022, 00:45

Hello fellow investors!  I began a post a few months ago in regards to a new construction project I will be starting soon and after all the great input I thought it would be nice to start a journal in order to help new investors who plan to start new construction projects for their first time.  Here's the down low in a nut shell.

I am building two SFH in Northern Liberties, this is a very sought out neighborhood in the city of Philadelphia. Minutes away from downtown and all major highways. Each home will be as follows: I bought the lots for 720k in total

1. On 2400sqft lots

2. 5800 sqft houses

3, 4 stories , garage parking, roof deck, elevator, and skyline views

Attached are the 3d Renderings of what I plan to build

Last week a home 4500 sqft just sold for 2.1 million dollars in one day. So thats the market as of now and I am told that pre-selling these within a month of breaking ground is very realistic and that I could get as much as 2.3 million per house. We shall see!

Here's how I started. As I am new to the new construction game I hired a consultant to guide me on my journey .  I interviewed 3 builders and 5 luxury real estate agents and their team.  I was told to not use my usually agent as when doing luxury at this level, you want someone who specialized in selling high priced homes.  Someone who has the clientele , know how, and team to get it done.

So I interviewed builders and got budgets from all three. One builder said he could do it for 180 sqft another quoted me at 225 a sqft.  When I compared their budgets I began to feel a bit worried since thats a large discrepancy between the two.  During my interviewing process, I visited projects these builders have done and are doing to get a feel and look at the quality of work they produce.  Both builders have experience in luxury home and the one I am going with just finished a 16 unit project in the heart of covid, which is one of the main reasons I chose him. He will know supply issues and how to circumvent them (ordering wolf appliances the day I break ground because he knows they are a year out, Anderson windows, same deal, etc etc). But back to the budget discrepancy .  The builder I chose has it at 1 million per house and the other is closer to 1.2....That said I am going to build in a contingency and put money aside just incase.

I am using hard money which makes this very risky, but I sold 3 of my 9 duplex's so that I could have a cash reserve of 400k to make sure I do not run into money issues.  I also have a buyer lines up, who is willing to buy the land with permitted plans for 1.2 million which would give me a profit of 500k without doing anything. I lined up buyers as another contingency/ exit plan, incase the lending doesn't work out, or some unforeseen issue , where I need to unload the lots.  So as backup I have some built in exit strategies.

Onto the steps I have had to take :

1. I had to first subdivide the lot from 4 1200 sqft lots into 2 2400 sqft lots

2. I hired an architect to build out the plans, submit zoning permits, do a structural survey of the land, and ultimate after getting zoning approved we just submitted the building plans.  This is a process in itself.  You want to make sure your architect knows the zoning laws in the area you are building, this is very important because, if my architects did not have the knowledge, I could have run into problems where zoning would not approve and I would need to wait months just to get variances IF I could even get them. So make sure your architect knows their zoning!  As a matter of fact, my guys knew their zoning but they assumed I knew it too...The original plan was to build 4 homes on 4 1200 sqft lots, and the architect went along with this (assuming I knew I would need a variance since it did not meet the 1400sqft per lot requirement) BUT I DID NOT KNOW....this set me back another month because I had to pivot.  It turns out it worked out for the better because with my original plan, I would not be able to get garages (which is a huge selling point in the city) After finding all this out, I had it subdivided for a second time into two 2400 sqft lots and looked up zoning laws where I saw that if I put a 5ft side yard on each side, it will be considered a detached home and not a row, which would allow for built in garage by right.  This pivot ended up working out because instead of having to wait another 6-8 months for a variance to sell 4 homes at 800k each, I am now able to build two larger homes for just about the same price but am able to sell each for 2.2 to 2.5 million , so I went from a gross profit of 3.2 million to a gross profit of around 4.4 million with a lower building cost. 4 homes would have been approx 650k each to build for a total of 2.6 million where as two larger homes cost 1 million each to build, maybe 1.2 million, either way it ends up being less to build but almost close to the same amount of profit.

a. the architect gave me schematics of the build

b. we went over them in stages and made tweaks here and there until I was satisfied with the final schematic

2A) Got general liability insurance and preparing to get builders risk, but not paying for it until the building permit is approved

3. While all the was happening, once I got the preliminary plans I gave them to my builder so he could price it all out. I learned that builders or yourself have to give the plans to a supply house and they run whats called "take offs" on all the line items and give you estimated prices of what everything will cost (Wood for framing, windows, siding, and the list goes on)

4. After this was done my builder had a budget which my hard money lender wanted and I needed so I know how much I will need to get a loan for in order to build these homes.  After careful consideration, since hard money is expensive and risky, I decided to build one house fully and one "under roof" which means exactly how it sounds, build just until the roof is on so outside elements cant get in.  The plan is to pre-sell one then have the lender release the rest of the money needed to finsih the 2nd house

5. Now we are at today. I am waiting for the building permit and in the mean time I am working with my builder to make sure we get the budget as close as we can to the actual cost.

I purchased the land in February, but began the process in November, so its taken 6 months to get to where I am now (submitting for building permits) To be continued.....The permits should be approved in about a month from now and we will break ground.

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Replied Mar 10 2023, 07:01
Quote from @Douglas Gratz:

Because you're still in way over your head, you just refuse to admit it. Which is part of your charm.


 I never disagreed with that, but I trust my builder and agent who are not in over their heads. Since they know what they are doing I believe things will go well. Especially since my builder has his own money in it.

Your naivete shows when you talk like this....'trust and believe' are not good business models......
Still rooting for ya though..... :-)

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Replied Mar 10 2023, 07:54

@Douglas Gratz Draws will never be as expected. I can assure you that. And you had better be on the same page with your bank/draw inspector. If its anything like commercial builds, the bank will want to see product on site and work performed. You will see what I am talking about when you get started. You had better have a good amount of cash on hand to prepay a lot of those costs out of your own pocket before you can get money back from the draw. And be aware that every time you call a draw the bank will hit you with an inspection fee. 

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Replied Mar 10 2023, 08:27
Quote from @Derek Bell:

@Douglas Gratz Draws will never be as expected. I can assure you that. And you had better be on the same page with your bank/draw inspector. If its anything like commercial builds, the bank will want to see product on site and work performed. You will see what I am talking about when you get started. You had better have a good amount of cash on hand to prepay a lot of those costs out of your own pocket before you can get money back from the draw. And be aware that every time you call a draw the bank will hit you with an inspection fee. 


Lol, you must have done this before! I only went this way ONCE as a Contractor and decided never again! It will kill a job unless run right, and it costs way more in time and money. Something to also note is that the Inspector does not just run out to the jobsite whenever you want, they might come out a week from Thursday.....and then one little thing is wrong and they come out another 10 days later....it can really slow down a job.

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Douglas Gratz
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  • Philadelphia, PA
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Douglas Gratz
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  • Philadelphia, PA
Replied Mar 10 2023, 12:54
Quote from @Derek Bell:

@Douglas Gratz Draws will never be as expected. I can assure you that. And you had better be on the same page with your bank/draw inspector. If its anything like commercial builds, the bank will want to see product on site and work performed. You will see what I am talking about when you get started. You had better have a good amount of cash on hand to prepay a lot of those costs out of your own pocket before you can get money back from the draw. And be aware that every time you call a draw the bank will hit you with an inspection fee. 


 I am just trying to get an idea for my partner. I guess since no one can give me an estimate on this website, ill just assume 100k every month.

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Douglas Gratz
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Douglas Gratz
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Replied Mar 10 2023, 22:09
Quote from @Derek Bell:

@Douglas Gratz Draws will never be as expected. I can assure you that. And you had better be on the same page with your bank/draw inspector. If its anything like commercial builds, the bank will want to see product on site and work performed. You will see what I am talking about when you get started. You had better have a good amount of cash on hand to prepay a lot of those costs out of your own pocket before you can get money back from the draw. And be aware that every time you call a draw the bank will hit you with an inspection fee. 


 Yeah I have thought about this a lot, the inspection process, I have money set aside. The first think I learned was if the money stops flowing it can really mess up a project

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Replied Mar 11 2023, 09:30
Quote from @Douglas Gratz:
Quote from @Derek Bell:

@Douglas Gratz Draws will never be as expected. I can assure you that. And you had better be on the same page with your bank/draw inspector. If its anything like commercial builds, the bank will want to see product on site and work performed. You will see what I am talking about when you get started. You had better have a good amount of cash on hand to prepay a lot of those costs out of your own pocket before you can get money back from the draw. And be aware that every time you call a draw the bank will hit you with an inspection fee. 


 Yeah I have thought about this a lot, the inspection process, I have money set aside. The first think I learned was if the money stops flowing it can really mess up a project


 It will kill it dead. And it will happen....100%

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Mike Smith
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Mike Smith
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Replied Mar 13 2023, 14:29
Quote from @Douglas Gratz:

@Mike Smith I have an important question, I want to figure out how much interest I will be pay each month, using this spread sheet , assuming it will take 1 year, can you map out how much I will be drawn each month. For example:

M1: $100,000

M2: $245,000

M3: 245,000

M4: 350,000

M5: 500,000

M6: 700,000

M7: 700,000

M8:1.1M

M9 1.1M

M10

M11

M12….

 @Douglas Gratz Sorry about the late reply.  I'm not on BP every day.  Your question is very good and I applaud you thinking this far ahead.  You are correct, your monthly interest is only charged on what you drawn, so you will need to use your spreadsheet for that.  I used your estimated draws at 6% annual interest:

M1: $100,000 @ 6% annual (0.5% per month) interest = $500

M2: $245,000 @ 6% annual (0.5% per month) interest = $1,225

M3: 245,000 @ 6% annual (0.5% per month) interest = $1,225

M4: 350,000 @ 6% annual (0.5% per month) interest = $1,750

M5: 500,000 @ 6% annual (0.5% per month) interest = $2,500

M6: 700,000 = $3,500

M7: 700,000 = $3,500

M8:1.1M = $5,500

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Douglas Gratz
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Douglas Gratz
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Replied Mar 13 2023, 22:05

@Mike Smith Thanks! Appreciated as always, but an you get me that 6% haha..Just playing ….I needed that estimate, I came pretty close, using Google as a research on the time each step should take, but not good to use given every house is different and this is double the size of your average 3000sqft . I was having them most trouble because I am not sure what can be done at the same time., If I am correct, my builder said the budget is the draw schedule, so I assumed that to mean its in order by step, but to which items will be drawn for at the same time, I was loss. Common sense gave me a good idea but I wasn’t sure and i had to account for deposits on items with a longer than usually lead time. I was pretty close by month 5 i had 550, 6) 800,000 and full amount from 7 on…..

It comes out to a lot less in total for interest, Before I started I thought it would be very close to the % of the whole , at 10.99% its around 70k in interest for a year. I guess if it’s a SPEC home, time on market can crush your profit. I am thankful it’s pre-sold, that would get stressful, however data says it would sell in less than 30 days, but got forbid more banks bankrupt. You have to be a stupid bank to lose in that business, to much risk taken, keep it average maybe al title above average risk and the profit all yours! You. Borrow others people money to lend, that’s like printing money lol…..Isn’t there super regulation these days after 2008, I mean my loans are so hard to get, but I guess different type of bank VC’s and such, but still. I was talking to a an old school banker today, had to be 85, still working , talking about yellow fever or maybe it was the Spanish flu in 1918 haha. Nice guy though…

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Mike Smith
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Mike Smith
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Replied Mar 30 2023, 09:21

@Douglas Gratz It's very difficult for me to tell you what items will be done concurrently with your build schedule.  I know how the job progresses on my homes but have no idea on how it will progress on your build.

I would suggest getting a schedule from your builder, then applying the interest formula to that schedule.  If the schedule is under 6-9 months, I would call BS on that schedule and drag it out to 6-9 months so you have a realistic interest budget.  I would also highly recommend that you also have a backup plan for months of interest for selling if your pre-sold buyer walks.  On high end construction, some buyers will walk because you have the wrong brand of appliances, wrong color of cabinet pulls, etc.  Many times you will have to refund their non-refundable earnest money or risk a lawsuit.  The buyers will claim you didn't furfill your contract so they will demand the earnest money back.

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Replied Mar 30 2023, 12:28
Quote from @Mike Smith:

I would suggest getting a schedule from your builder, then applying the interest formula to that schedule.  If the schedule is under 6-9 months, I would call BS on that schedule and drag it out to 6-9 months so you have a realistic interest budget.  

I would also highly recommend that you also have a backup plan for months of interest for selling if your pre-sold buyer walks.  On high end construction, some buyers will walk because you have the wrong brand of appliances, wrong color of cabinet pulls, etc.  Many times you will have to refund their non-refundable earnest money or risk a lawsuit.  The buyers will claim you didn't furfill your contract so they will demand the earnest money back.

#1 - I would seriously look at a time frame of 1 year+ to be realistic. There's the weather. And Inspectors. And throw in a high-end client and here come the COs...
#2 - Good point...I'm guessing @Douglas Gratz does not have this in mind being a newbie. Absolutely a client like this can just walk away over anything...happens all the time. They have money, lots of it and can buy or sue their way out of anything. Ya gotta be ready for this.....

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Douglas Gratz
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Douglas Gratz
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Replied Apr 5 2023, 20:29
Quote from @Bruce Woodruff:
Quote from @Mike Smith:

I would suggest getting a schedule from your builder, then applying the interest formula to that schedule.  If the schedule is under 6-9 months, I would call BS on that schedule and drag it out to 6-9 months so you have a realistic interest budget.  

I would also highly recommend that you also have a backup plan for months of interest for selling if your pre-sold buyer walks.  On high end construction, some buyers will walk because you have the wrong brand of appliances, wrong color of cabinet pulls, etc.  Many times you will have to refund their non-refundable earnest money or risk a lawsuit.  The buyers will claim you didn't furfill your contract so they will demand the earnest money back.

#1 - I would seriously look at a time frame of 1 year+ to be realistic. There's the weather. And Inspectors. And throw in a high-end client and here come the COs...
#2 - Good point...I'm guessing @Douglas Gratz does not have this in mind being a newbie. Absolutely a client like this can just walk away over anything...happens all the time. They have money, lots of it and can buy or sue their way out of anything. Ya gotta be ready for this.....

COs? He is confident he can finish within 1 year. He finished 14 townhomes in the middle of covid in 2 so I am confident in his estimate, but as a precaution, the AOS has a 3-month cushion. And yeah she could always back out and I would keep her $300,000 (this part of the AOS is IRON CLAD, I made sure of it! Once we start framing there is no circumstance she can get this back given the changes she made to the bones, shes locked in (but there's always a chance so we are trying to line up other buyers, and the interest is there (we are close to pre-selling the second lot). She has already paid the architects for changes she made (adding a 3rd garage spot by elongating one of the two garages which means steel in order for her to keep the basement) shes already put deposits on all her finishes. So yeah it's always possible but this buyer is 32 years young and very excited so my gut is telling me this is unlikely after assessing her commitment the best I can (so yes I have had it in mind, I have a consultant remember, there were many things I didnt think of that he made me aware of. As for suing her way out, the AOS is very tight, my agent made sure of it because of all her customizations, so she can try anything is possible.

@Mike Smith " On high-end construction, some buyers will walk because you have the wrong brand of appliances, the wrong color of cabinet pulls, etc. Many times you will have to refund their non-refundable earnest money or risk a lawsuit. The buyers will claim you didn't fulfill your contract so they will demand the earnest money back."

She picked out all her finishes so unless the manufacturer changes the dye that tints the color slightly, I don't see that or the wrong appliances as she has picked and put deposits on them already. I will be careful in making sure to stick to the AOS to the T so as not to give her any reason to be able to win a lawsuit. She's 32 years young and as I said above has put so much money into it already, I don't see her wanting to back out, but you never know. I can only prepare so much for something like that. I had my attorney look over the AOS before signing and he made some changes to protect me as much as possible, but it's pretty straightforward in terms of deadlines and we put a nice cushion in there to allow us up to one year 3 months to finish and it states that if there are any delays as a result of anything she changed than those delays are added into the cushion and since she changed a lot we have a lot of leeways there. So did my best to prepare for anything that could cause her to back out and try to sue

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Douglas Gratz
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Douglas Gratz
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Replied Apr 5 2023, 20:40

@Mike Smith 

@Bruce Woodruff

The most important thing is getting it finished within the timeline of 1 year 3 months, that might be the only out she has that could happen, other than that, she wants this house. We have met many times and her being young, I have gauged her the best I could and she is really excited to live here. She has put so much time into it and with the excitement, she shows (being young) I don't think she wants to live anywhere else after getting to customize her entire home. We just need to honor our end and we should be golden....Like I said, anything is possible, going from excited to angry bc of some error as you said Mike, so I will make sure to do my best to see that these errors don't occur (triple checking her picked-out finishes, making sure "this is the product you picked a right serial number and all" All I can do is just that and keep her happy and has the developer, that's my job give her,her dream home as she ordered it and give her no reason to go from excited to mad or worried. So I stay on top of everthing, the builder, the subs, the orders, the timeline for each step, get this thing closed up so the weather wont hold us up, make sure all the orders are spot on, all line items are ordered on time and in the right amounts, double and triple checking everything over and over.....

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Replied Apr 6 2023, 07:43

Sounds like you have it pretty well covered. I would just suggest getting everything in writing. Everything. And If you think there will be no COs on a high-end home like this, you're being foolish. People with that kind of money are stupid with their decisions because they can always buy their way out of their mistakes. So just be ready for the COs, usually once you get to the finish stage.

Also, order all the windows/doors and the cabinets right up front.

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Rich Hupper
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Rich Hupper
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Replied Apr 24 2023, 07:55

Quick question about the price per sqft is that for the hard costs of construction plus builder fees?

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Douglas Gratz
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Douglas Gratz
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Replied May 25 2023, 15:19
Quote from @Rich Hupper:

Quick question about the price per sqft is that for the hard costs of construction plus builder fees?

Yeah his weekly pay is baked in

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Douglas Gratz
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Douglas Gratz
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Replied May 25 2023, 15:42

5/24/2023

6:19pm

So everyone, I am just about out of hope and motivation. And I swear I must be cursed because let me tell you a little about other things in my life before 2012 it was all self-inflicted, but every five years something outside of my control comes to crushed me and sent me back negative steps, so 2012 I stop being stupid I start my business, I do a bunch of flips and have eight units at that time 2017. I got stage be 3B melanoma…had three surgeries, but luckily I didn’t need chemo but I immuno therapy, which is not covered by insurance cost 80 grand around twice a year so I had to sell two of my rentals, which were great to have but after all, my bills wasn’t much anymore I couldn’t save and this is what led to this project 

Four years later I’m stagnant I got no money to grow and land. I’ve been waiting to get a call to buy because it was my ex girlfriends back in 2014 the first thing I ever said to her was if your parents literally when she got in the car, I said your parents on that lot. If they’re ever ready to sell you, let me know  her and I broke up soon after it was mutual just no chemistry, but I kiss *** for the past nine years . She has a little business. I helped her turn it into something great, and I just been helping her for the past 10 years to stay in her. Good Grace.

Finally 2021 comes around and I get a call and it’s for the land so I sell my house and buy it so now I’m renting rates are real low and the location is gold. I knew if I could get funding I making a profit there’s no doubt about it. Well, guess what happens right as we’re about to close on my first attempt at a loan rates skyrocket, and that loan disappeared , Call Him is not doing bad, but there is inflation. I finally got somebody to lend me at 18% then Bank started to fail and everyone got nervous so that loan fell apart so what I’m trying to get that is every five years it’s like attempted suicide 2011 what is this is my hell the devil lets me get inches away from success and rips it away who knows right

Point being everything I’ve ever had to accomplish in my life I have to work 20 times harder and frankly I’m tired

2 weeks ago my lender calls..Let me back up, they said all I need to get the loan to closing was have my partner who’s builds all over the country with this lender to sign on the loan for his experience, so I got him to agree… 

3 week before this call , they wanted a letter of explanation about my past criminal charges from over 15 years ago….

Back to the start….They set up a call and told me they were dropping the loan amount which came to about 200k per loan (2 homes to seperate loans.) closing cost went from 89k to 303k . I told them I have a 10a% contingency but they added one too which took money away from paying off the land to take first position and put it into the budget…

We were set to close in 2 weeks…they use the reason of experience bc my partner is in FL but he used these lenders and builds in Cali while in Florida…so it had to be my background .

Right now , my builder who I work for now, is calling all the wealthy people he’s been building for and still getting turned down. We have both homes pre sold , I am confused out of my mind. So there’s risk but way less than a spec home.

To top it off the current mortgage holder of the land, wont release one lot at a time (claiming the lot not built will lose value) which is a flat out lie, they were the first we went to fund it at a very high rate , one day they backed out, they want to me fail, I know the guy well, I used to be friends with his son.

It looks like I am going to go out the box and try buyer financing as a last resort. She wants the second lot as a yard and I havnt signed the AOS with the 2nd buyer. 

Back story, with the loan and partners my bet profit was 430k from both homes.

So I’m good with anything above 400k. I can offer a good deal on the land as incentive . I got it for 360, I give it to her for 400k it’s worth 500k…She finances the build I make over 400k goal more

Or real out the box and see if she just will buy the deal for 1.3M . I still build but it’s hers to do whatever…It would cost her 1,180,000 using 10% contingency …so she’s all in for $2,480,000. She bought the house from me for $2,250,000 , so she gets the land for 330k 40k less then I got it for but I walk away with a approx 700k. I owe 630 on the land…1,300,000 -630,000= 670k . The buyer is loaded , in the big picture it’s a great deal 

Unlikely when we do approach with buyer finance, we’re going to say the developer stands to lose a lot of profit if you build a house here so if he doesn’t build it, it’s giving up a big opportunity so he’s willing to do it if you finance the build of your house because I don’t wanna show that I don’t have the money to fund that you know she would jump ship right away 

all that said,  said I am scared, my hope is the dwindling   by the day, and it looks like the probability of being screwed is high and I screwed I mean unable to recover. I can’t get a job because I have a felony so I can’t save up and start over. Wow this is bad never been this word in my life but if both homes sold if I sign that AOS, I’m just gonna have to hustle and find a bunch of people or one person I get this invested wish me luck. It’s been real tough guys and mostly because number one rates skyrocketed ruined a lot of chances of getting a loan number to my experience banks would’ve let me the money if I had built before I can’t believe it though because I mean why is my builders experience who builds million dollar homes all day not matter I ****ing hate red tape but yeah it’s tough guys real tough


if there’s anyone interested in this it’s a ****ing low risk I reward both homes sold you don’t find that that’s a oxymoron. What investment vehicle can you put money in and 12 months receive about 26% on your body and I get that number from $2,990,000 which is the cost to build Bottas that’s about $1.2 million profit I need 400 grand so there’s 800 left that’s 26% you can’t make that in anything right now in 12 months yeah these buyers come back out some .8 months it but number one they lose $300,000 each , number two he gets $600,000 still build and it will sell because the cops these houses don’t stay on the market for more than 10 days the location is gold, so yeah if you’re interested message me cause I’m about to be living with my parents after all my hard work




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Replied May 25 2023, 18:18

Wait...what happened to your original deal where she was just gonna pay you to build a house for her? Wouldn't the profit on the project have been enough to make the loan payments? I must be missing something......

I wish you all the luck in the world, Douglas, but you sure do get yourself into some fixes, don't ya?

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Andrés Uribe
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Andrés Uribe
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Replied May 25 2023, 19:20
Quote from @Douglas Gratz:

5/24/2023

6:19pm

So everyone, I am just about out of hope and motivation. And I swear I must be cursed because let me tell you a little about other things in my life before 2012 it was all self-inflicted, but every five years something outside of my control comes to crushed me and sent me back negative steps, so 2012 I stop being stupid I start my business, I do a bunch of flips and have eight units at that time 2017. I got stage be 3B melanoma…had three surgeries, but luckily I didn’t need chemo but I immuno therapy, which is not covered by insurance cost 80 grand around twice a year so I had to sell two of my rentals, which were great to have but after all, my bills wasn’t much anymore I couldn’t save and this is what led to this project 

Four years later I’m stagnant I got no money to grow and land. I’ve been waiting to get a call to buy because it was my ex girlfriends back in 2014 the first thing I ever said to her was if your parents literally when she got in the car, I said your parents on that lot. If they’re ever ready to sell you, let me know  her and I broke up soon after it was mutual just no chemistry, but I kiss *** for the past nine years . She has a little business. I helped her turn it into something great, and I just been helping her for the past 10 years to stay in her. Good Grace.

Finally 2021 comes around and I get a call and it’s for the land so I sell my house and buy it so now I’m renting rates are real low and the location is gold. I knew if I could get funding I making a profit there’s no doubt about it. Well, guess what happens right as we’re about to close on my first attempt at a loan rates skyrocket, and that loan disappeared , Call Him is not doing bad, but there is inflation. I finally got somebody to lend me at 18% then Bank started to fail and everyone got nervous so that loan fell apart so what I’m trying to get that is every five years it’s like attempted suicide 2011 what is this is my hell the devil lets me get inches away from success and rips it away who knows right

Point being everything I’ve ever had to accomplish in my life I have to work 20 times harder and frankly I’m tired

2 weeks ago my lender calls..Let me back up, they said all I need to get the loan to closing was have my partner who’s builds all over the country with this lender to sign on the loan for his experience, so I got him to agree… 

3 week before this call , they wanted a letter of explanation about my past criminal charges from over 15 years ago….

Back to the start….They set up a call and told me they were dropping the loan amount which came to about 200k per loan (2 homes to seperate loans.) closing cost went from 89k to 303k . I told them I have a 10a% contingency but they added one too which took money away from paying off the land to take first position and put it into the budget…

We were set to close in 2 weeks…they use the reason of experience bc my partner is in FL but he used these lenders and builds in Cali while in Florida…so it had to be my background .

Right now , my builder who I work for now, is calling all the wealthy people he’s been building for and still getting turned down. We have both homes pre sold , I am confused out of my mind. So there’s risk but way less than a spec home.

To top it off the current mortgage holder of the land, wont release one lot at a time (claiming the lot not built will lose value) which is a flat out lie, they were the first we went to fund it at a very high rate , one day they backed out, they want to me fail, I know the guy well, I used to be friends with his son.

It looks like I am going to go out the box and try buyer financing as a last resort. She wants the second lot as a yard and I havnt signed the AOS with the 2nd buyer. 

Back story, with the loan and partners my bet profit was 430k from both homes.

So I’m good with anything above 400k. I can offer a good deal on the land as incentive . I got it for 360, I give it to her for 400k it’s worth 500k…She finances the build I make over 400k goal more

Or real out the box and see if she just will buy the deal for 1.3M . I still build but it’s hers to do whatever…It would cost her 1,180,000 using 10% contingency …so she’s all in for $2,480,000. She bought the house from me for $2,250,000 , so she gets the land for 330k 40k less then I got it for but I walk away with a approx 700k. I owe 630 on the land…1,300,000 -630,000= 670k . The buyer is loaded , in the big picture it’s a great deal 

Unlikely when we do approach with buyer finance, we’re going to say the developer stands to lose a lot of profit if you build a house here so if he doesn’t build it, it’s giving up a big opportunity so he’s willing to do it if you finance the build of your house because I don’t wanna show that I don’t have the money to fund that you know she would jump ship right away 

all that said,  said I am scared, my hope is the dwindling   by the day, and it looks like the probability of being screwed is high and I screwed I mean unable to recover. I can’t get a job because I have a felony so I can’t save up and start over. Wow this is bad never been this word in my life but if both homes sold if I sign that AOS, I’m just gonna have to hustle and find a bunch of people or one person I get this invested wish me luck. It’s been real tough guys and mostly because number one rates skyrocketed ruined a lot of chances of getting a loan number to my experience banks would’ve let me the money if I had built before I can’t believe it though because I mean why is my builders experience who builds million dollar homes all day not matter I ****ing hate red tape but yeah it’s tough guys real tough


if there’s anyone interested in this it’s a ****ing low risk I reward both homes sold you don’t find that that’s a oxymoron. What investment vehicle can you put money in and 12 months receive about 26% on your body and I get that number from $2,990,000 which is the cost to build Bottas that’s about $1.2 million profit I need 400 grand so there’s 800 left that’s 26% you can’t make that in anything right now in 12 months yeah these buyers come back out some .8 months it but number one they lose $300,000 each , number two he gets $600,000 still build and it will sell because the cops these houses don’t stay on the market for more than 10 days the location is gold, so yeah if you’re interested message me cause I’m about to be living with my parents after all my hard work





 Keep your head up brother. I feel your pain, I am in the middle of a very similar process for nee construction (we were about to close this week, then builder calls and says he’s out because he is business partner left the company -his wife’s fault lol- wtf?!! I convinced him to think about it, he said he’ll take a couple weeks, so back to the drawing board to find new builder or wait a month to close). Everything seems to be going wrong, but a lot of things gone right and been done right, if there is a way out focus on that and pursue it. Think of the skier metaphor, a pro skier does not focus on the trees he’s zig zagging in between, he focuses on the space between the trees, otherwise he’d crash, his own fault, trees are always there. 
You are cautious, calculated risk taker, and from the feedback of some people here you are taking right steps, just things out of your control keep coming up. 
move learned from your story and this thread, it has helped me, so thank you for sharing. I hope and will pray that something good out of your control will happen for your project. 

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Douglas Gratz
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  • Philadelphia, PA
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Douglas Gratz
  • Rental Property Investor
  • Philadelphia, PA
Replied May 26 2023, 10:29
Quote from @Bruce Woodruff:

Wait...what happened to your original deal where she was just gonna pay you to build a house for her? Wouldn't the profit on the project have been enough to make the loan payments? I must be missing something......

I wish you all the luck in the world, Douglas, but you sure do get yourself into some fixes, don't ya?

Yeah, the buyer finance was a Last Resort. That’s where I’m headed toward but yes I do 

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Douglas Gratz
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Douglas Gratz
  • Rental Property Investor
  • Philadelphia, PA
Replied May 26 2023, 10:30
Quote from @Andrés Uribe:
Quote from @Douglas Gratz:

5/24/2023

6:19pm

So everyone, I am just about out of hope and motivation. And I swear I must be cursed because let me tell you a little about other things in my life before 2012 it was all self-inflicted, but every five years something outside of my control comes to crushed me and sent me back negative steps, so 2012 I stop being stupid I start my business, I do a bunch of flips and have eight units at that time 2017. I got stage be 3B melanoma…had three surgeries, but luckily I didn’t need chemo but I immuno therapy, which is not covered by insurance cost 80 grand around twice a year so I had to sell two of my rentals, which were great to have but after all, my bills wasn’t much anymore I couldn’t save and this is what led to this project 

Four years later I’m stagnant I got no money to grow and land. I’ve been waiting to get a call to buy because it was my ex girlfriends back in 2014 the first thing I ever said to her was if your parents literally when she got in the car, I said your parents on that lot. If they’re ever ready to sell you, let me know  her and I broke up soon after it was mutual just no chemistry, but I kiss *** for the past nine years . She has a little business. I helped her turn it into something great, and I just been helping her for the past 10 years to stay in her. Good Grace.

Finally 2021 comes around and I get a call and it’s for the land so I sell my house and buy it so now I’m renting rates are real low and the location is gold. I knew if I could get funding I making a profit there’s no doubt about it. Well, guess what happens right as we’re about to close on my first attempt at a loan rates skyrocket, and that loan disappeared , Call Him is not doing bad, but there is inflation. I finally got somebody to lend me at 18% then Bank started to fail and everyone got nervous so that loan fell apart so what I’m trying to get that is every five years it’s like attempted suicide 2011 what is this is my hell the devil lets me get inches away from success and rips it away who knows right

Point being everything I’ve ever had to accomplish in my life I have to work 20 times harder and frankly I’m tired

2 weeks ago my lender calls..Let me back up, they said all I need to get the loan to closing was have my partner who’s builds all over the country with this lender to sign on the loan for his experience, so I got him to agree… 

3 week before this call , they wanted a letter of explanation about my past criminal charges from over 15 years ago….

Back to the start….They set up a call and told me they were dropping the loan amount which came to about 200k per loan (2 homes to seperate loans.) closing cost went from 89k to 303k . I told them I have a 10a% contingency but they added one too which took money away from paying off the land to take first position and put it into the budget…

We were set to close in 2 weeks…they use the reason of experience bc my partner is in FL but he used these lenders and builds in Cali while in Florida…so it had to be my background .

Right now , my builder who I work for now, is calling all the wealthy people he’s been building for and still getting turned down. We have both homes pre sold , I am confused out of my mind. So there’s risk but way less than a spec home.

To top it off the current mortgage holder of the land, wont release one lot at a time (claiming the lot not built will lose value) which is a flat out lie, they were the first we went to fund it at a very high rate , one day they backed out, they want to me fail, I know the guy well, I used to be friends with his son.

It looks like I am going to go out the box and try buyer financing as a last resort. She wants the second lot as a yard and I havnt signed the AOS with the 2nd buyer. 

Back story, with the loan and partners my bet profit was 430k from both homes.

So I’m good with anything above 400k. I can offer a good deal on the land as incentive . I got it for 360, I give it to her for 400k it’s worth 500k…She finances the build I make over 400k goal more

Or real out the box and see if she just will buy the deal for 1.3M . I still build but it’s hers to do whatever…It would cost her 1,180,000 using 10% contingency …so she’s all in for $2,480,000. She bought the house from me for $2,250,000 , so she gets the land for 330k 40k less then I got it for but I walk away with a approx 700k. I owe 630 on the land…1,300,000 -630,000= 670k . The buyer is loaded , in the big picture it’s a great deal 

Unlikely when we do approach with buyer finance, we’re going to say the developer stands to lose a lot of profit if you build a house here so if he doesn’t build it, it’s giving up a big opportunity so he’s willing to do it if you finance the build of your house because I don’t wanna show that I don’t have the money to fund that you know she would jump ship right away 

all that said,  said I am scared, my hope is the dwindling   by the day, and it looks like the probability of being screwed is high and I screwed I mean unable to recover. I can’t get a job because I have a felony so I can’t save up and start over. Wow this is bad never been this word in my life but if both homes sold if I sign that AOS, I’m just gonna have to hustle and find a bunch of people or one person I get this invested wish me luck. It’s been real tough guys and mostly because number one rates skyrocketed ruined a lot of chances of getting a loan number to my experience banks would’ve let me the money if I had built before I can’t believe it though because I mean why is my builders experience who builds million dollar homes all day not matter I ****ing hate red tape but yeah it’s tough guys real tough


if there’s anyone interested in this it’s a ****ing low risk I reward both homes sold you don’t find that that’s a oxymoron. What investment vehicle can you put money in and 12 months receive about 26% on your body and I get that number from $2,990,000 which is the cost to build Bottas that’s about $1.2 million profit I need 400 grand so there’s 800 left that’s 26% you can’t make that in anything right now in 12 months yeah these buyers come back out some .8 months it but number one they lose $300,000 each , number two he gets $600,000 still build and it will sell because the cops these houses don’t stay on the market for more than 10 days the location is gold, so yeah if you’re interested message me cause I’m about to be living with my parents after all my hard work





 Keep your head up brother. I feel your pain, I am in the middle of a very similar process for nee construction (we were about to close this week, then builder calls and says he’s out because he is business partner left the company -his wife’s fault lol- wtf?!! I convinced him to think about it, he said he’ll take a couple weeks, so back to the drawing board to find new builder or wait a month to close). Everything seems to be going wrong, but a lot of things gone right and been done right, if there is a way out focus on that and pursue it. Think of the skier metaphor, a pro skier does not focus on the trees he’s zig zagging in between, he focuses on the space between the trees, otherwise he’d crash, his own fault, trees are always there. 
You are cautious, calculated risk taker, and from the feedback of some people here you are taking right steps, just things out of your control keep coming up. 
move learned from your story and this thread, it has helped me, so thank you for sharing. I hope and will pray that something good out of your control will happen for your project. 


 Oh thank you for your kind words. I’m glad it helped and will see the potential there so it’s not impossible.

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Douglas Gratz
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Douglas Gratz
  • Rental Property Investor
  • Philadelphia, PA
Replied May 26 2023, 11:35
Quote from @Bruce Woodruff:

Wait...what happened to your original deal where she was just gonna pay you to build a house for her? Wouldn't the profit on the project have been enough to make the loan payments? I must be missing something......

I wish you all the luck in the world, Douglas, but you sure do get yourself into some fixes, don't ya?


 Yeah, what I was saying when she was paying for all the changes, she may just be in the architect directly, paying for the kitchens directly etc I talked to a few builders I know supply houses sometimes front of lllstuff they can on credit and add a percent, and then I only need to raise so much less

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Replied Aug 18 2023, 13:42
Quote from @Douglas Gratz:
Quote from @Bruce Woodruff:

Wait...what happened to your original deal where she was just gonna pay you to build a house for her? Wouldn't the profit on the project have been enough to make the loan payments? I must be missing something......

I wish you all the luck in the world, Douglas, but you sure do get yourself into some fixes, don't ya?


 Yeah, what I was saying when she was paying for all the changes, she may just be in the architect directly, paying for the kitchens directly etc I talked to a few builders I know supply houses sometimes front of lllstuff they can on credit and add a percent, and then I only need to raise so much less

 @douglas Gratz how’s the project going 

@Douglas Gratzundefined

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Replied Aug 18 2023, 13:43

@Douglas Gratz

How do I get started in new construction as a beginner 

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Bruce Woodruff
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Bruce Woodruff
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Replied Aug 18 2023, 15:58
Quote from @Philip Jackson:

@Douglas Gratz

How do I get started in new construction as a beginner 


 Don;t start in new construction....specially not on this level. You will get your butt handed to you. Start small and easy and work your way up. Do you have any hands-on construction experience?

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Replied Aug 19 2023, 09:25

@Douglas Gratz

How's the construction going by now? Are you still moving forward with building the custom homes?