All Forum Posts by: Douglas Gratz

@Bruce Woodruff if it lets me upload it ill get on that, I dont have the blueprints left so this is all rough estimates for the most part, the price per sqft includes finishes

@Bruce Woodruff and yes its going to cost $180 per sqft not $300. I do not know where you got your numbers from.  This 1.7millino home I am buying will need top of the line finishes yes, but its the location that makes the price so high , not the house here. (the house obviously will need high end finishes, but you catch my meaning) Where do you get $300 from?

The lots is 40x60 of which 31x51 will be built on. I have to lots back to back .  And I am simply asking the above (not being defensive) all opinions welcome here. I like the truth

@Bruce Woodruff I am over my head which is why I freely gave away 15% of my net profit to an experienced professional who has had over 20 homes built. If not I would have sold the land when I bought it for a 200k profit.

@Jay Hinrichs I have a consultant who has been building houses for while now, but I see where you are going with that

@David Butler your answer was so in depth I was wondering if you wouldn't mind, in order, writing each sub I would need to get (what kind of profession am I looking to hire) From your list, it all pretty much common sense, but I cant make mistakes so I want to double check). 

its a basement , four stories, and a roof deck in the heart of philadelphia. I wanted to get rid of the basement and save some sqft, but houses in the 1.7 million dollar range, that expect it all....The stories get smaller as you go up else wise id be over building.  At the moment I am trying to figure out what size is perfect, as I get towards that 1.7 million range, my marketing demographic becomes much smaller...Tough decisions already and have not even started haha

I could sell the lots and make a good chunk, but I cant sell them because of fear.  I believe fear is natural in your first big venture/big risk high reward.....So I am trying to know as much as I can to make sure delays are at a minimum (preferably none at all but we know thats not feasible haha), materials are ordered ahead of time to account for supply chain issues going on in this country (windows is the most backlogged and its one thing I may not be able to order from the jump because things could change)

but I cant help myself but think to take 1/4 of what I think my profit will be and sell them because of covid and its uncertainty , rates going to go up eventually (maybe that helps people rush to buy if I get them done in time), inflation etc etc....But I also feel its more about the money and more about seizing the opportunity and feel if I back out then I will regret it, you know

@Mike Wood @Jaron Walling @David Butler.  Just to help clear some things up, the price I have to build this including finishes is approx 180k per sqft. I am actually working with my architect to get the schematic (less sqft)

I have a developer but have contemplated being my own GC however I do not know any great subs I would trust with a 1.7 to 1.9 million dollar home

Comps in the area dont have many homes this large downtown Philadelphia.  There are at least 10 with lots sizes 20 X 60 some of these sold for 1.3 mil and have 1000 sqft than I am proposing, bigger lots 25x90 sold for 1.9 million

my lot is 40X60 Wide home (not narrow) in the best part of Philly. There are lots 20. x 60 that sold for 1.5 million as well...So I am hoping to sell each home (2) for 1.7 mil minimum 2.3 mil max.....

Im not going to lie, it is scary, we are going through covid, but at the same time this is once in a life time opportunity ,  you dont find land in this area much anymore let alone 180k per 20x60 lot (4 of them converted into (2) 40x60 lots). 

Hard money has me the most scared but if things go well the profit should be approx 700k and the way I look at it, if it goes over time, I will lose money in interest, but with my calculations in the worst case if it would take 6 months to sell id lose 90k in that 6 months out of my profit, and so on...I see (unless we hit a depresssion) as lower risk in that it would take over a few years of not selling before the profit becomes negative (you can see my perspective) 

 

@Mike Wood I wish I could get a construction loan from commercial bank, but what exactly is a commercial bank, everyone I have applied with has denied me. My debt/income ratio is lower than it really is because I own alot of rentals so for tax purposes and depreciation, my taxes dont show the whole real picture.  I make 80k a year more than my taxes show..

I would love to use a bank, can you point me in the right direction?

@Mike Wood the $750 does not include the cost of the land...but hold up let me finish reading

@Jaron Walling I own 15 rental units and came Acroos an amazing land deal, so I am doing my first new construction project.  I take your opinion  openly, have you built new construction before and if so, what price per sqft do you think it would cost including finishes

@David Butler that was amazing. Thank you for your well thought out response, that will go a long a way as a start to get the process exact, including room for error, if something changes along the way.  Yes I have a developer, but I want to Make sure I know as much of the process rather than relying on information that may or may not be correct , but wouldn't know else wise.   If I knew any good subs I would figure this process our 100% and hire subs, but work is so hard to find here right now .