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Updated over 9 years ago on . Most recent reply

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Bobby Holley
  • Entrepreneur
  • Duluth, GA
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What Does New Development Mean for Flippers

Bobby Holley
  • Entrepreneur
  • Duluth, GA
Posted

Recently a developer began marketing 10 homes in a 70 lot subdivision. The homes range in price from $200k - $300k. The subdivision is located inside my farm market and within a mile of my initial house flip ($275k ARV) I expect to close on this month. How do you see the new development affecting my target area and the buyer market once I finish rehab, hopefully this February?

Also, this subdivision is across the main highway from a friend who lives on a 21 acre property adjacent to a subdivision he developed, himself.  He has sold 12 of the 17 lots with the value of the houses ranging from $400k - $700k.  My friend is 81 and progressing toward retirement.  I am considering moving into the developer space if the undeveloped lots have value.  How do you think the new subdivision would impact the prospects for finishing that development?

The community is suburban Atlanta and has many quality neighborhoods and is anchored by a great school district.

Most Popular Reply

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Manolo D.#3 Contractors Contributor
  • Contractor
  • Los Angeles, CA
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Manolo D.#3 Contractors Contributor
  • Contractor
  • Los Angeles, CA
Replied

New construction could sell a couple of thousands if not tens of thousands more, given that is exactly the same house. Developing is not an easy task, maybe you need to shadow your old friend and have him sit on the sidelines. Charge 25-50k/house for you to run his business but make sure it is a JV so you could have track record. Let him sit on the sidelines and enjoy retirement, but you have the privilege of building land capital and tricks of the trade. Then when it's time for you, maybe 5-10 years and 10-20 houses after, you have enough capital to buy land and perhaps up to site dev.

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