Real Estate Agent · NJ · Member since 2019 · 237 posts · 169 votes
I bought an empty lot of the land in Florida during the recession for $7000 market value now is around $26,000. I am considering building on the land. Estimated costs to build are around $160k. I want to turn around and sell it once it is done for 190K-200K. Is this reasonable or am I better off selling the empty lot and pocketing the difference? Or possibly even renting?
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
6y
Between the dirt and the construction, you are in at $167k. With a Best sales price of $200k and resale costs of approx. $15k, you are looking at only $18k of profit and that does not consider any holding costs you may have. Thus, selling the dirt would be the better play based on the small amount of info you provided. That said, perhaps you can find a means to build it cheaper or if there are possibilities of increasing the margin via the exit price.
Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
6y
@Shain Ismailovski looks like after taking out interest carry, commissions and closing costs you will net more selling the lot only. You should approach local builders that do Specs and see if they will buy it.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
6y
Between the dirt and the construction, you are in at $167k. With a Best sales price of $200k and resale costs of approx. $15k, you are looking at only $18k of profit and that does not consider any holding costs you may have. Thus, selling the dirt would be the better play based on the small amount of info you provided. That said, perhaps you can find a means to build it cheaper or if there are possibilities of increasing the margin via the exit price.