Updated over 1 year ago on .
Looking for Advice: Launching a Real Estate Development Partnership
Here's my deal:
About me...
I'm an Engineer by trade with a broker's license and do deals on the side. I own three three-family homes in Worcester, MA and 4 single family homes in Michigan. I'm a numbers guy who likes the investing and real estate world.
I noticed that a big moneymaker is attached new construction homes. You build a duplex, triplex, or fourplex and sell each unit individually since affordability in my area has become a big issue for medium income families.
I ran numbers and decided I want to build these kinds of homes. I have friends that do some construction and I'm sure I can find contractors to be able to build a whole house. I know it's easier said than done but I'd like to believe I have a good set of skills to make this happen.
I'm also very resourceful. I got found a way to get a hold of a list of vacant lots in a whole city or town on which I can build using lot size and zoning. I still have to do frontage and set backs on the ones that interest me but I have a way too. Not gonna say how I did it but don't think many people have done this in the past.
What I need...
I need to find a mentor(s) to pick their brain on the how to materialize my ideas.
-I want to do creative financing through small time investors (50-100k) and pay them interests (7-9%)
-I want to do seller financed lots to and collateralize the lots (this is why I got my lists)
-I think I can also do institutional financing and cross collateralize the equity in some of my properties for a bridge loan
-I'm also open to a hybrid of the above options
Here are some numbers to illustrate a possible project:
FOURPLEX
Lender financed lot: $200,000
Construction budget: $900,000
Total cost of financing: $100,000
Homes details: 1700sqft, 3bd, 2 bath, built-in single garage
Sales price per unit $480,000
Net per unit: $456,000
Profit: $624,000
Timeline: 1 Year
I even created a whole business plan for this project. I can achieve that construction cost only I become the builder and ergo my desire to become one. These numbers are real numbers for my area in Massachusetts.