25 New Homes in PA: 5 Built, 2 under const, horizontal Complete
Investment Info:
Other other investment.
Purchase price: $368,000
Cash invested: $520,000
New construction development of 25 new homes: www.kingdomplacehomes.com. Horizontal construction is complete, 5 homes built, New homes currently under construction, as we complete the project.
What made you interested in investing in this type of deal?
I've been developing and building since 1996, and new construction is where I've spent most of my career. This area had no new single-family home community at all. Basic supply and demand. Families wanted new homes near New Castle and nobody was building them, so I did.
How did you find this deal and how did you negotiate it?
I wasn't looking for a listing. I was looking for land that fit a thesis: acreage close to schools and highway access in a market with zero new-home competition. Found 32 acres on Harlansburg Road, negotiated directly with the owner, and closed at $368,000. When you're the only buyer who sees the end use, you negotiate from a different position than someone bidding on a marketed deal.
How did you finance this deal?
Land purchase came first, then construction financing in phases. Horizontal work (roads, utilities, sitework) is the expensive part nobody sees, and it's done. Roughly $5.2 million invested/financed to date between land, horizontal, and the first homes. Each home is financed and built in sequence, so the project funds its own next phase as homes sell.
How did you add value to the deal?
Raw acreage to a fully improved community. Entitlements, engineering, roads, utilities, and 1-acre parcels with over 20 home models buyers can pre-order and customize. The land was worth what I paid for it. The finished lots and homes are worth multiples of that. That spread is the entire development business.
What was the outcome?
In progress. Horizontal construction is complete, 5 homes are built, and more are under construction now. Full buildout is 25 homes.
Lessons learned? Challenges?
Horizontal costs and timelines will humble you. Weather, utility coordination, and municipal approvals all move slower than any pro forma says they will. Budget contingency like you mean it, then add more. And underwrite your exit before you break ground. The build is only half the game. Knowing exactly what each home sells for, and to whom, is the other half.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Local civil engineering and current local construction crew have been straightforward to work with. Happy to share specifics if anyone's developing in Western PA. Send me a message.
