Updated almost 4 years ago on . Most recent reply
Land purchase for residential home development
Investment Info:
Single-family residence other investment in Asheville.
Purchase price: $422,500
Cash invested: $106,000
Land that has been subdivided into 5 lots with city water, roads, and septic system design already completed. Property is located in a jurisdiction that doesn't regulate short-term rentals, so we will building investor-friendly units. We anticipate a 25% net after paying owners compensation.
What made you interested in investing in this type of deal?
Our experience is in new home construction and we can pull building permits on day 1 of our ownership.
How did you find this deal and how did you negotiate it?
This deal was brought to our attention by a civil engineer who has worked on projects with us off and on for 15 years.
How did you finance this deal?
We financed the project with 25% down (earned from a project we're closing out in January, so no out-of-pocket cash was necessary) and 75% bank financing at 4.75%. The bank will also provide construction loans for each build, which will not require any additional cash infusion on our part.
How did you add value to the deal?
Construction of new residences for short-term rentals.
What was the outcome?
TBD
Lessons learned? Challenges?
We intend to build the same floor plan on each lot; the challenge will be to vary the front elevation of the homes so that they don't look cookie cutter.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, I am a real estate agent and I can highly recommend myself to others. LOL
On a more serious note, we have worked with Bank OZK out of their Forest City, NC branch for 5 years. Our relationship with them has been excellent. They are easy to work with, very professional and timely. Currently, we're working with Eddie Lunsford. If you'd like an introduction, please reach out to me and I'll be glad to share his contact info.
Most Popular Reply
Congrats! What a great investment opportunity. Just reiterates the importance of relationships....especially for sourcing deals.