This land was originally 1 house we purchased from a wholesaler in Charlotte, North Carolina. We subdivided into 2 lots, and sold the first house over the summer. After a few months, the bank lent the money to build the second house. As you can read in the above linked post, my basis in each lot after development (including demo, survey and subdivision cost, utility connections, grading, tree removal, etc) was right around 208k per lot. We completed this home, staged it, and accepted a full price offer within 30 days. Total sq footage was about 5,200 and sales price was 1,250,000. Pics below.
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
9y
@Jon Klaus, thanks! Although I can't take credit on the photos- my realtor handles that aspect. I try to fill a missing gap on every project. Sometimes that means I wouldn't go as high end, or if there's a need for a smaller house, or in this case, I saw a lot of projects coming out of the ground right around 3,600 ft-4,200 ft. In 2016, I sold 5 projects in that size range also, and some common feedback on those was basically they lacked something and were a little too small- maybe they needed one more guest room, or a big game room, etc. It's funny, we tried to get away from the mcmansions for a few years, but now I think it's back. It also helped that this was a basement lot. So, instead of competing with builders doing 975k-1.1 million houses at around 4,000 sq ft we tried to add a little size and build the prices up. The next step up in neighborhoods (Myers Park), just a mile or 2 away, was still a couple of hundred thousand higher for a similar sized new build. So, we figured, we could hit the missing gap if that makes sense. The 5,000 sq ft home in the next neighborhood would be at 1.5m or higher. Or, they could come to this neighborhood (Cotswold) and get the 5,000 ft at 1.25m, and stay under the competition in the surrounding areas. Is this how you evaluate what you are going to build in Austin? Or am I a little nuts? :)
@Christopher Hopkins, thanks. New guys? You should check out some local meetups and REIAs. There's a group that meets in Monroe or close by I believe, and several in Charlotte.
@James Masotti, infill can get pretty expensive. We built and sold 4 that were over 1 million in 2016. 1 was in the link at the beginning of this post, and 3 were in the link below.
Rental Property Investor · San Antonio, TX · Member since 2011 · 266 posts · 158 votes
9y
Bryan A. watching your progress on BP over the last few years has been amazing. You've really had a meteoric rise!
This project is incredible. I think you definitely found a gap in the market with this house and price point. Surely you can replicate the model and do a few more!
Congrats on this project and all your success, it's inspiring.
-Andrew
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
9y
@Andrew K., thanks for the nice compliments. It has been an awesome and fun few years... which for some reason of course, brings up the question "when will it stop?" I'm actually focusing most of my efforts on 400k-600k- price points right now. But if I do see another opportunity for a deal on land in a higher end area, I'll be all over it. Just seems lately, that other builders/developers are willing to pay way more and I assume take a thinner margin on a 1 million sale.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
9y
@Account Closed In Austin we are staying in the $450K to $550K price range, That gets you 1500-2000 SF. In my neighborhoods, 3000 SF is huge. We also build ADU's and sell them separately from the main house (set up condo regime) They are typically 850 SF and sell for $275K-$350K. The $1mm+ specs scare me in that if the market hits the wall like in 2009, I might be stuck. If the price was half as much, I would hope to rent it out, covering debt service until the next up turn.
We recently bought a house on one acre that we plan to divide into 4 lots and build 8 homes. I expect it will take two years to get through the city before we get building permits. In today's market what we plan to build would sell for $450K each. We may hold and rent them when they are finished. Rents would be $3000/mo each, today.
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
9y
@Jon Klaus, interesting. We can do ADU's here, but in most zoning categories they can not be split through the planning dept and sold separately. Are you splitting through plat or through deed? Is this a special zoning category that you're targeting? What is your cost to build 850 sf ADU, compared to your normal 2,000 sf build? Every time I try and build a smaller house, my cost per ft is high. Are these 2 story or single story? I agree on the high end, I won't touch it unless I can get a great deal on the lot. Generally this means making a play on the land, where I find a way to subdivide that others didn't recognize to bring down my lot basis. Otherwise I stay away and let the gamblers have at it. It's good to hear from you, and congrats on your newest development deal!