Charleston SC new build results

[Jay Hinrichs]

As I have written in the past I entered the Charleston SC  spec building market about 10 years ago. Have done about 30 infills from my first one with a retail sale of 275k to the house I built and sold to Shep of Southern Charm and higher end homes South of Broad that sold for 2k Plus per sq ft. 

This market is NUTS on pricing I mean when I rolled into town from Oregon a decade ago I could buy lots for 20 to 60k no problem. Now try to find a lot for under 300k is a challenge.. And Old mt. Pleasant has gone nuclear in pricing One lot I offered 600k for about 6 years ago turned at 2.2 mil just for the lot.  WOW.

Anyway finally found a lot at 6 F st. I had already built and sold 20 F st.. backs to the freeway so not ideal but it was the only lot I could finally get that was under 250k my builder who I brought out from Vegas way back when did the vertical and he has created a very nice business for himself there as well so I am proud of that helping him come out of the Bad Vegas market and really thrive there in Charleston. 

Bottom line

250k for the lot

350k for the build 

810K exit 

time 18 months the build was not 18 months it was 6 months the delay was permitting in the BAR zone. 

so Net net net was about 125k in profit I paid cash for the lot borrowed the 350k from my go to banker there in the market at bank rates. 

so 50% profit in 18 months which we normally hit the 50% profit in 12 months or less on the new builds we do. We started at 900k which was aggressive and the freeway was an issue.. But the buyer was all cash and we got it done. 

On the look out for my next Charleston project. There does come a time in a market like this that infill gets absorbed and finding vacant lots is really really hard as there just is not many left.  I was not the only one doing new builds there so between us one other larger company and scattered investors the inventory has been absorbed.

It would be different if you could tear houses down but its hard to demo a house there in Charleston many its simply not allowed. 

Been a great run.. Hope do be able to do one a year going forward but will see.. I dont have the stones to pay 2 mil for a lot and have a 4 or 5 mil spec home.. those you can make 500 to 1 mil on or lose the same amount and you just cant rent them to cash flow them either LOL

[Marcus Auerbach]

We certainly have the demand, even in the higher price points. The last time I built, I was the GC and that was SO much work, not sure if I am up for that again. Lets find some time to chat, I'll message you.