Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
I've previously posted results of homes built recently compared to rehabbing. Due to our area BOOMING with new buyers, my most recent closing is what I consider a home run. From first shovel to receiving escrow closing check, less than 90 days.(and that was going through Thanksgiving, Christmas and New Years Holidays!)
The most recent home closed on schedule last week. Nice homecoming present after 2 weeks in Dubai. Here are facts of deal.
Lot purchased 1 year ago for 50K.
Total const costs including loan costs $201,140.22
Total Costs $251,140.22
Sales price $349,900
Net proceeds after all costs, commissions, etc.from closing $330,809.12
Net net $79,668.90
My investment was 50K and return was approx 160% in one year. I still feel there is much more potential in many areas doing new const rather than rehab. Anyone else agree with that? I'm just starting home # 5 and building same plan in same area. #6 should start here in 30-45 days. Rich
p.s. If I'd started this home right after acquiring lot, return would've been over 500%. Home just started is on lot just purchased for 68K. This one could be even better return. CRAZY good in my area
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Travis Haigler:
As Steven Hamilton II said, all I had to do was ask. I did, and I got one heck of an education! It's great that Rich is willing to take the time and help those of us just starting out in real estate!
Like many of us here, I'm guessing Rich has had his share of help along the way from other investors who were more experienced than he was at the time, and now he's paying it forward with other new investors. When ethical, hard working investors volunteer their time to help up-and-coming investors get started, it helps the entire industry, as those values are instilled in the new investors from the beginning.
Just a good reminder to all of us who have had help along the way that we should be paying that forward, not just for the satisfaction of helping others, but in order to better our industry as well. Also a good reminder that despite how much many of us will disagree on some stuff here on BP, when it comes to the really important stuff, most of us are on the same page.
Rich is definitely one of the good guys, and I'm sure there are a lot of people here who owe him a good bit of gratitude for their success...
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
13y
Larry-In SO TX, I've been building for under $60 sq ft w/o lot. That is 4br 2 ba fully landscaped and fully fenced. The lots vary from 12-25K. Last one appraised for 157K, but I sell to investors for 145K.
In So UT I build for owner users. I posted the results of most recent home just a couple days ago. It was approx $85 sq ft w/o lot. 2500 sq ft 4br 3 ba, travertine, granite and all the niceness. There are pics posted on BP somewhere. The lots range from 50 to 68K. The most recent one sold for 349900 and listing was posted here on BP. Built, sold and closed in under 90 days. Rich
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
13y
Rich
I couldn't agree with you more.
My Italian wife wants the kids within a 10 mile radius so when my 19 yr old daughter wanted to 'dorm it' we told her we would take the dorm co$t & finance the down pmt on a rehab for her & 2 friends (who would be paying $450/mo each 'room rent') 2.5 miles from us.
We stole the home @ $55 sq ft but it took me 5 months (it was tough to get good sober help) & $30,000. But I did replace the kitchen, bathrooms & every door, window. I also had to re-wire & re plumb most of it to meet code.
The finished rehab put the cost @ $72 sq ft but it's 'bones' remain a poorly constructed 2x4 & we will sell it once she finishes college. Yep she wants a new build.
When my son finally decided to own his own home we talked him into a NEW BUILD. The rehab route was not going to be financially viable & way too many headaches/unknowns.
We picked up 1.2 acres (6 miles away) between a $295,000 & $185,000 home. The GC we chose was great as we had seen his work on a high end home.
Taking your build advice in earlier threads we built a 2200sq ft, 4bed 2.5 bath 2car garage, but went 2x6 construction using plywood throughout. Cost was $81 sq ft (not including land $26,000) but up here in the snow belt it's tough to get a basic (2x4 shell) new build for under $115 sq ft.
I just completed a rehab on a SFH we have owned for some time & unless you cut a lot of corners it would be tough in this area to make living doing it.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
13y
Originally posted by Larry Flanagan:
Jon Klaus
There must be a fundamental reason for the large spreads though?
Yeah, you are right. I'm typing on my phone, so briefly, I am looking for high demand areas with market inefficiency. For example, find a neighborhood where new construction is selling for $200psf. Can you find buildable lots for $100k and build for $90psf? If so, you are in business.
Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
13y
Agree completely with Rich Weese. I prefer new construction all day long for a variety of reasons. Fewer rehabbers to compete with, fewer problems and surprises during construction, and less wasted time with acquisitions.
Nice returns on your recent project. Picking up the finished lot at 15% or less of end value is pretty unusual, nice work.
I've got a bunch of lots in a marginal location. Haven't had a call on them in six years. In the past two weeks i've got three people claiming they're interested in building new homes there. Market ebbs and flows really are pretty interesting.
Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
13y
Rich
You seem to have the "Midas Touch" as you succeed in just about everything you do. But like other's have said, the cost to build, especially here in CA, is very prohibitive. For instance, my father passed last year and I had to get all the properties appraised. Several houses in the Visalia, CA area appraised for $50,000 and when I got new insurance, the insurance company said "rebuild" cost was $197,000. Building a 1200 sq ft, 3/2 house in CA is easily $150,000, then add in the land, permit and utility costs, and you are right at $200,000.
Therefore, I am still buying at $50,000 and renting them for $800 a month, and making money.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Rich Weese:
For many, rehabbing, flipping and wholesaling has run its' course. The easy $$$$ has already been made and now to make money in this process, you have to find certain niches, or good luck. It has become like finding a needle in a haystack.
IF it were ever that easy, everybody would do it. It was never easy, however, the spreads were larger before, that is the difference. I agree that you need to find niches to make money in RE, and spec building is one of those niches, not just specific niches within rehabbing.
Nothing wrong with the add-on strategy (in fact, it adds spread if you know what you are doing) Tear downs become spec builds, so you are knocking it just because some demo work had to be done? As for more expensive rehabs and hoping for the best, lets be real here, that is just not true. I could state that investors are buying dirt, spec building, and hoping for the best. Truth be told, the savvy make money becusae they do it right, no matter the strategy! Using investor money to "spread risk in case market turns" . . ?? Really? So anyone borrowing money for rehab flips are hedging risk by placing investor money at risk in the event that the market dramatically turns in the long hold periods of 4 months that rehab flippers hold? Wow. I for one borrow investor money to apply leverage responsibly, it does not hedge my risk at all, in fact, in my opinion, it places more risk on me than if it were just 100% my money. I always pay my investors back, even in the occurance of a loss.
This entire comment of yours appears to be a pro spec build, anti rehab post. Not sure why you feel the need to slam the rehab game and pump the spec build one. I get the fact that you are proud of your recent success and should be, you made a nice profit and that is great. Posting about it while slamming rehab flipping is nothing more than a "mine is better than yours game" and makes a ton of invalid assumptions that lack foundation.
I agree that everyone should do their reaearch and that some could have ulterior motives for "pushing" one strategy which make us wonder why you are pushing the spec build so hard here. I personally have ZERO motive to push rehab flips and have spec built many single family homes, duplex units, and small apartments so my response comes from someone who has done BOTH with NO motives to push one over the other. If I were in UT or So TX where spec builds make sense, you can bet your bottom dollar I would be spec building and not rehab flipping. Most people on this board do not have the opportunity to pack up and move to another area, so we perform strategies in our market that make sense for our market.
Commercial Real Estate Broker · San Diego, CA · Member since 2012 · 37 posts · 1 vote
13y
Originally posted by Mike M:
...But like other's have said, the cost to build, especially here in CA, is very prohibitive. ... Building a 1200 sq ft, 3/2 house in CA is easily $150,000, then add in the land, permit and utility costs, and you are right at $200,000.
Question for both Mike M. and Will - since you are both in CA like myself and have experience with the construction process + the permit-maze:
I know that each area has different regulations, however:
- How much is generally allowed to be knocked-down without being considered a "new build" and therefore require the tens-of-thousands of $ in new impact fees? (e.g. - can a building be destroyed down to its slab-imprint and then re-built as long as its footprint isn't added to laterally?)
- If a property is already on a lot - meaning that it has been there and has hook-ups, etc... and the zoning states that there can be multiple units on it, then can these be added without the extra fees? Or does simply adding any new "dwelling" + meters, or zoning changes, etc. mean you have to pay new impact fees?
I'm trying to get a better idea of what actually sets-off the "impact fee" trigger with any type of residential (multi-unit) related reconstruction / rehab / new build.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
I have not done any multi unit spec builds in CA, only in TX so cant answer that part.
As far as how much needs to stay before it is considered a new build will largely depend on which city or county you are dealing with. Some will allow that if one or two walls remain, and the footprint stays the same, you are OK. Others like in Malibu will consider any construction over 50% of existing be considered a new build and can take over a year for approvals. Impossible to answer that question as a whole (CA).
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
13y
Larry – I am familiar with both areas being that I have lived in each. There are definitely different characteristics from southern Texas to southern Utah. For the type home I'm building, the lot prices are low in both locations even though the type homes are definitely different. I've always felt that most of the profit is made on the acquisition, and that would be on developed property as well as undeveloped property. Obviously, you need demand for your product so as Jon K said, you need to have a product that the public wants.
Pat L – thanks for your comparison of methods. You do a good job of making my argument that it is difficult in the current economy to make a living doing rehabs unless you find a definite niche. I'm glad that taking my advice on your new build has worked out well for you.
Steve K – remember, I mentioned that I hit a homerun with the recent completed build job. The lot was actually 14% on this one, but the previous home built was over 17%. You also made my argument for me with your comment that lots sitting for years are now generating interest from builders. That is a good sign that investors are willing to try new construction.
Mike M-I certainly have had my share of failures or disappointments in various investments and have outlined several of those in previous threads here on BP. I've also mentioned many times, that California would not be one of the areas I would invest in. In most areas, there is no exit strategy if unable to sell a rehab or newly constructed home. The prices are just too high to make a decent return on the investment, in my opinion. Even though your numbers on a $50,000 home generating $800 per month would probably be criticized by the 50%/2% group here on BP, I would certainly be comfortable with that decision. $800 seems extremely low for anything in California, isn't it?
Will – I'm glad you chimed in. You are the only one on this thread standing up for the various types of rehab that you are doing. As of now, this thread fails to have a single person supporting your viewpoint and I count eight that agree with new construction. I didn't post this thread to bash rehabs and mentioned that they need a certain niche that most are not interested in using. I stand by my comment that the easy money in rehabs is long gone in almost every area of the United States. Those that are continuing to do it, have switched philosophies to major tear downs, or add-ons or extremely expensive properties. No one seems to be "wondering"why I am pushing spec building except you. I don't know who the us is. You also seemed questionable or critical of my return on the most recent build job. Not sure of your reasoning, but I hope I answered your questions on that. I'm always very open showing the MLS information and I guess I could show my settlement statement to satisfy your curiosity. Kind of silly in my opinion.
I also disagree with your comment that you have ZERO motive to push rehab flips. In pushing your rehab flips, it improves your chances of borrowing money from BP members to finance future flips, just as you are currently doing in California. There is nothing wrong with that method, and I'm not suggesting there is, but that's certainly helps with your money raising on those flips.
I'm sorry you seem to take my previous post as an attack on your rehab program. It was not intended to do that. My comment was that over the past several years, rehab money was pretty easy to make, and I certainly participated in that for two years in South Texas. As evidenced by many threads and posts here on BP, most rehab or's are finding it more difficult to find product with a decent spread. You seem to be the only one disagreeing with that. I agree that not everyone can just pick up and move to a new location to invest in and that is certainly an advantage for me.
I continue to wish you best of l luck on your method and hope you will post the results of your current very expensive rehab. I'm sure you will do well. I don't expect this thread to turn into a back-and-forth between you and I, but feel free to address any of my points. I don't plan on continuing this dialogue since I think I've said all that I have to say.
Clayton – this is another reason I like new construction. The time delays on tear downs can be exorbitant and the market may pass you by while you are trying to navigate the permit maze. I'm not willing to spend over a year getting a permit in an area like Malibu as will stated. My permit approval time here in southern Utah (and it is actually city of Washington currently not St. George) is approximately 10 days. I can't imagine waiting for months as Jon K mentioned in some areas of Texas.
It has been interesting to see the posts in this thread and the different areas represented where new construction is receiving much more interest than in the past. Again, if there are additional rehab or out there that are finding tremendous success using that method currently, please feel free to chime in as I never intended this to be a one-sided discussion. Rich
Commercial Real Estate Broker · San Diego, CA · Member since 2012 · 37 posts · 1 vote
13y
I have yet to dig into actually developing anything so I have no experience or complete knowledge of how long permits and approvals are for any type of residential development or what the process is for significant rehab projects in my area. This I will surely want to find out - although I doubt there is anywhere in Calif. where building approvals run along in 10 days!
My overall interest with this post - and that dealing with the "new construction" approach - stems simply from the prevailing conditions of the market where I would like to get started.
I've gone over again and again the "50 / 2%" rules and they have definitely helped me to better judge an investment rental opportunity. However, I simply don't have the luxury where I am located to sweep up any type of respectable properties for, say, $50k and expect to rent them out for $1,000. Not to mention that properties I've seen going for these amounts are generally in the slums which I refuse to get involved with - and the rents would be <$500 /month.
One of the greatest things I've learned in the past few months is that of looking at investment deals through "reverse calculation." If I were to begin by looking at an investment area and I know that a median priced 2bd/1ba in a 4-plex would fetch, say, $750/month ... Then I would have to be held to the numbers and look at the property with a realistic valuation.
Even if I used a conservative rule of 1% / month (rent-market price ratio), then the same example above with a Gross Scheduled Yearly Rent of $36,000 ($750 x 4,... $3,000 x 12) would cause me to put an absolute all-in cap value at $360k - with ZERO differed maintenance.
Unfortunately, without finding deals at huge discounts, it is easy to find similar 4-plexes in my area that are on their last-leg and brokers are asking perhaps $450k or $500K + for the same property as the example above.
To me, this is silly and therefore I simply figured that if new construction numbers penciled (even if considering high impact fees), then why not try to simply find some available parcels and / or tear-downs and try to build new within relative parameters.
As mentioned, I'm just getting my feet wet so perhaps I'm off somewhere, but the numbers need to pencil in any investment / industry.
*By the way, since I am just starting out and hustling like mad, I'd be happy to meet-up with anyone in the Northern California region to collaborate, discuss, etc...!
Virtual Assistant · Anaheim, CA · Member since 2013 · 167 posts · 44 votes
13y
Amen!
I feel what you are doing has even greater returns for the economy. New construction provides more work for others then rehab! More money being spent AND earned creates healthy economy! Thank you for building and being patient enough to wait for higher return!!
Apopka, FL · Member since 2012 · 207 posts · 120 votes
13y
A single discussion on a single website does not a good sample make.
New construction tends to be a very cyclical business and it has some really big players nationally and in most regions. The entry point is higher than rehabbing (depending on the definition of rebabbing) and it's more sensitive to economic downturns. All of which add risk.
Investors vote with their pocketbook on what's best for them. Indeed rehab profit margins have slipped over the last year. But in most areas the number of rehab jobs happening at any given time greatly outnumber the new construction projects. Meaning lots of very savvy real estate investors that think their path to profit starts with an ugly house, not a pile of dirt.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Rich Weese:
Will - I'm glad you chimed in. You are the only one on this thread standing up for the various types of rehab that you are doing. As of now, this thread fails to have a single person supporting your viewpoint and I count eight that agree with new construction.
Perhaps so, but that means nothing and I am not standing up for what I do, but for rehabbing in general. Perhaps 99% of the members on this board do not feel they have the experience or the stones to say anything in contradiction to you as you are experienced, one of the older crowd, and have run the gauntlet on RE investing. Perhaps the other 1% of experienced rehabbers on this board like J Scott, or any number of other rehabbers have yet to chime in. While most of us will not argue that spreads are thinner and finding deals is more difficult, none of us have given up or feel that we need to instantly move to spec building.
Though it may appear one way, let me be clear this and any of my posts that argue, contradict, or challenge any of your posts are not intended to be some imature back and forth, but an educational and informative exchange between two experienced and successful RE investors.
Then why even bring up all your negative comments on rehab flips? Why not simply post what a great success you had in your local market of spec building, and leave it at that? Your comment of those that continue to do it have switched philosophies is simply not accurate as you can not possibly know what each of us are thinking, doing, and changing (us being rehab flippers).n I have not switched to major tear downs, I have yet to add any square feet to any property in the last two years, and my niche of luxury market homes did partially come from new market conditions, but it also came as a natural progression of my abilities. i would not place all of us (us being rehabbers) into your one pot, it is simply not accurate.
The "us" is rehabbers and I was not critical of your returns, but I did ask some questions about them as any other member would question any other member when they post items that exclude some expenses. many cases in point or in the landlording forums where posters constantly leave out lots of operating expenses. In your case, you listed your only expense to hold as resale costs which came out to approx. 5.5%. That seams really low as my resale costs will be slightly higher than 6% and that does not include holding costs, acquisition costs, or debt service, none of which you listed. If you do not want to share that info, that is fine, but don't expet savvy investor to buy that you had zero holding costs. If I have ever left any numbers out, I have almost always been questioned on this board, as i should be.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Rich Weese:
I also disagree with your comment that you have ZERO motive to push rehab flips. In pushing your rehab flips, it improves your chances of borrowing money from BP members to finance future flips, just as you are currently doing in California. There is nothing wrong with that method, and I'm not suggesting there is, but that's certainly helps with your money raising on those flips.
Certainly you can disagree, but lets get the cards on the table here. This is your spec build thread and I simply contradicted and argued from a rehabber's perspective to counter your attacks on rehab flippers, nothing more. If I want to gain more private investors, I will create my own thread to do so. Here, I have ZERO motivation or self interests on rehab flips other than to argue your statements of opinion which I believe to be falacies that lack foundation.
Originally posted by Rich Weese:
I'm sorry you seem to take my previous post as an attack on your rehab program. It was not intended to do that. My comment was that over the past several years, rehab money was pretty easy to make, and I certainly participated in that for two years in South Texas. As evidenced by many threads and posts here on BP, most rehab or's are finding it more difficult to find product with a decent spread. You seem to be the only one disagreeing with that. I agree that not everyone can just pick up and move to a new location to invest in and that is certainly an advantage for me.
Not an attack on my rehabs, but an attack on the rehab flip strategy as a whole. You did not even need to bring that into your thread, but you felt, for some reason, to do so. I defended the other side, nothing more. Again, to be clear, I also stated that you did a great job and earned a great return on your spec build. I also stated that if I were in UT or So TX, I would be doing exactly what you are doing, likely on a larger scale simply because I am still working and you are dloing it more for fun and to stay busy. That is great. I never once in any respnse diagfreed that finding deals was more difficult or that spreads were tighter. Again, I agree, but that does NOT mean rehab flips are dead, or that every rehab flipper has changed philosophies.
Again Rich, congrats on your spec build profits, though I have the opinion that the numbers are off some, now matter how anyone slices it, it was a great deal that anyone of us rehabbers and spec builders would be happy to have in the portfolio!
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Michael B.:
A single discussion on a single website does not make a good sample.
New construction tends to be a very cyclical business and it has some really big players nationally and in most regions. The entry point is higher than rehabbing (depending on the definition of rebabbing) and it's more sensitive to economic downturns. All of which add risk.
Investors vote with their pocketbook on what's best for them. Indeed rehab profit margins have slipped over the last year. But in most areas the number of rehab jobs happening at any given time greatly outnumber the new construction projects. Meaning lots of very savvy real estate investors that think their path to profit starts with an ugly house, not a pile of dirt.
Agreed, spec buidling typically requires a longer hold time which increases holding costs, risk, and market turns. However, a good spec builder will allow for such costs and risk and insure a spread to cover it, just as a rehab flipper will allow for same when dealing with longer rehab deals.
Real Estate Investor · Santa Fe, NM · Member since 2013 · 2 posts · 0 votes
13y
I have to ag ree. The construction is easier, since there are no surprises. My best investment was building duplexes in Tucson AZ. I built them in 49 days for $54 a foot.
But the city started raising the fees for permits and water meters drastically, cutting into our bottom line too much.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
13y
Michael B- I tend to agree with most of what you said. Thanks for your points. One of the reasons I selected the 2 areas I did was that there is no large builder per se. New construction me be cyclical, but so was lucrative, relatively easy rehab profits. Now, that area is requiring more work, smaller spreads and higher rehab costs in most cases from what I've seen and heard.
Your second paragraph was the reason that most pick rehab-cost of entering the field, which not what many rehabbers can afford. I disagree that the last paragraph is the reason.
Don- Don't you feel the finished product price will rise when all the existing inventory built with lower fees is absorbed? That is what has happened in my area. Our appraisals and sales are rising much faster than fees. I'm not sure I helped much in my response to your e-mail, but I tried. Rich
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
13y
Will – I wasn't going to keep this back-and-forth going between you and I but you do make some very valid points, which I know you don't seem to care what my thoughts are that others here on BP probably would like to know. I'm glad you agreed that the spreads are thinner and the deals more difficult to find currently. I believe that was what I was trying to say. I do stand by my comment that many rehab or's are changing their philosophy and some posters in this thread have stated so. There is nothing wrong with that, just a required change to stay in that business in this marketplace in my opinion.
As to the return on my recent build job, I did include the acquisition cost of the lot, and all points and interest – nothing was left out. I also mentioned this was a home run just as I mentioned on the previous results when I said it was a very thin return. That happens in real estate investing.
I'm sorry you felt this was an attack on rehab or, as it was certainly not that in my opinion. As one who has done many rehabs and also new construction, I felt that the title of this thread conveys my feelings at the present time. I tried to list the reasons why and additional posters on this thread have every right to do the same or contradict.
Have a good day. Rich
Tracy, CA · Member since 2012 · 48 posts · 22 votes
13y
I am a small time rehabber in the central valley area and I do agree that deals are drying up for a quick and easy flip/rehabbers. Up until late last year I was flipping homes with min work (new coat of paint, deep cleaning and not much). Most of the rehabbers I know were doing the same and the game kinda changed and now the properties require extensive rehab which drove a lot of flippers away. I currently have two rehabs-one buy and hold condo and one flip. The condo required complete kitchen and flooring along with some fixtures and the single family homes requires complete interior. The margins are great on these "not so turn key" homes so is the risk. I still cant rationalize the numbers when it comes to new const. In my area and with my limited knowledge I cant say new const will have better returns.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Rich Weese:
Will – I wasn't going to keep this back-and-forth going between you and I but you do make some very valid points, which I know you don't seem to care what my thoughts are that others here on BP probably would like to know.
Rich, I dont understand why you do not want to have a friutful debate with me, I think it benefits all readers. is it just because i dont agree with some (not all) of your statements? As far as your last comment, again, I have no idea where this thought process of yours comes from. I never once stated I did not care about your opinions. You need to remember that I too have spec built homes including land development, I dont argue it is a viable strategy and I certainly appreciate your examples of deals you are able to do in your area. It gets me excited to know that perhaps soon, my area will also have viable spec build opportunities, it does NOT at this moment in time. You can not build for $65 per square in Southern CA and you likely cant buy dirt for under 20% of exit value as you are able to do in your area.
Originally posted by Rich Weese:
As to the return on my recent build job, I did include the acquisition cost of the lot, and all points and interest - nothing was left out.
I did see the lot cost, build costs, etc. I did miss that the cost included financing so that is my error, thanks for pointing that out. My only other comment regarding your costs was the $19k and change you had for resale costs which calculates to 5.4%. I was wondering how you kept that specific cost so low? Did you get a 4 or 4.5% RE commission agreement? If so, that is fantastic as that cost is very low and increased your profits.
I will also assume from your post that you paid your own 100% cash for the dirt and got 100% financing for the build and permits since your post reflected your total cash outay of $50k which wa the lot cost?
If such deals could be done here, you can bet your mortgage I would be doing them right now.
As far as reghab flips, I have always been doing medium to heavy rehabs, in fact, I can only think of two properties where I just did "lipstick" and all others had full kitchen and bath gut/remodels, many had new windows and stucco, some not, all needed landscaping, paiting, flooring, electrical and plumbing fixtures, etc. many of them also had minor wall removals (non load bearing) aqnd repositionings.
One of the things I miss most about spec over rehab is that you do not have to ever worry about fixing some other moron homeowner's messed up work. Since you are starting new, everything IS new. In rehab flips, I constantly have to figure out what silly and stupid things homeowners do acting as Joe Homeonwer contractor when they have no business even holding a hammer, let alone owneing one.
I certainly hope we can continue this discussion/debate, I think it is a great learning curve for others to read about, don't you agree?