Pictured above is a rough rendering of the first speculative home projects that I will be investing in. If you want a little context from over a year ago (when I was going to go down this path but it didn't end up working out), check out this previous discussion I started on BiggerPockets that had a ton of great discussion:

https://www.biggerpockets.com/forums/44/topics/517...

Anyhow, here are the cliff notes of the new project- what has happened up til now, rough numbers and structure behind the project, and challenges going forward.

-This project is located in the "North Hyde Park" neighborhood of Tampa. It is a gentrifying neighborhood with older resale homes trending in the 150-250k range, and new construction trending in the mid to upper 400s. This neighborhood is the closest to Downtown Tampa, and depending on the lot of a home- walkable to a brand new and hip Urban Park at the beginning of Downtown.

-I identified an off-market piece of vacant land in this neighborhood through a real estate broker who is a friend. I'm an agent myself, so I had told my network of agents my specific lot acquisition criteria a few weeks back. (Within 2 miles of Downtown Tampa, neighborhood with current new construction activity, price point for dirt under $100k.)

-Comps for single lots in this neighborhood were going for 115k-135k at the time I purchased. Now they are more like 120k-150k depending on the block in the neighborhood. That being said, those are standard sized lots which are 45X95 in dimension. The lot I purchased was for $80k, but a subprime size of 25X95.

-This lot was under the minimum size needed to build technically speaking, but still it was a historic "lot of record" it was fully buildable as I verified in person and in writing with the city. (Always get things in writing from the city. Pro tip on approaching the city, always approach them in a humble and open minded fashion. This helped me move through the bureaucracy a lot quicker.)

-After acquiring the lot, I quickly realized a few things: #1 I probably overpaid on the lot a bit or paid close to market value, it retrospect I could have probably negotiated $65k on it. #2 This was a very, very narrow lot and given the building setbacks, it would be very difficult to accommodate a sizable home on it. #3 Without any construction background, hiring the right builder to co-venture on this project with me would be critical. A cookie cutter builder would not suffice.

-My vision for this lot, which any common sense person would think is a narrow crappy lot, is the following (we'll see how it pans out in a few months): modern home, geared towards a younger urban buyer, three stories high with a master suite that offers downtown views on the 3rd floor, 3 full bedrooms and 3.5 bathrooms (so three full suites which adds value for a single professional that may lease out 2 extra bedrooms), striking interior finishes vs vanilla.

-I quickly began driving around town and taking pictures of homes that looked appealing to me, then looked up the addresses in our permit search system to see the contractors/builders who pulled permits etc.

-After doing this, I connected with 4-5 builders and finally the right fit that looked at this project as not a burden but saw the vision and was excited to work together. This builder also had a great track record.

-We visited the city together after developing a plan set (I generated ideas, he did all the detailed drawing and engineering). We were able to negotiate setback exceptions, stormwater drainage exceptions, and even a design exception for the style of build we were doing. We submit for permits within a few days. So what do the numbers look like? The build we came up with is around 1950 heated square feet and 3 bedroom/3.5 bathroom.

-Anyhow here are the costs:

Dirt-80k

Surveys etc (boundary, tree, topography)-1k

Construction budget hard costs-230k

"Oh sh**" budget-10k

Builder Fees, Architectural Plans, Architectural Consult Through Project- 35k

Total all in: $356,000

Projected sales price: $435k (conservative). Based on activity in the area, very realistically pull up to $475k.

On sales price of $435k, net proceeds after realtor fees & closing costs are $408,900 or profit of $52,900.

We are self-funding the project, and would pay out only 20k of builder fees on front end, so total investment is about 341k for a 53k return or 12.2% in my low-end situation. 93k in the stretch situation, which is 26%.

We are doing the first one in cash, because we don't want to deal with a bank draw schedule but I plan on doing the next with financing if this one is successful.

What am I missing? Will be sharing updates as project moves along.