All Forum Posts by: Lee Ripma

Hi @Carrie Maultsby-Lute,

Good problem to have! So I just did a little research for you. If we look at only this zip code there are 92 total homes that have sold in the last 3 months or are listed on the MLS. There is only one MF, so I threw it out, you're in a SFH market. The average sold price per sf is $73.84 (n=47) and the average list price per sf is $120.16 (n=44). Gotta give it to them for aiming high! This is fairly crude math but it tells you that if you built 6 single family homes that were all the average sf of the sold homes (1305 sf) then you could sell those homes for 6 x 1305 x $73.84=$578,167. But you'd probably want to build more desirable 2500 sf homes so then you could sell those homes for 6 x 2500 x $73.84=$1,107,600. I could further dial in those numbers by looking at the homes that are closer to what you would build and their prices (you're probably looking at a slightly higher price per square foot). So now all you have to do is figure out what it will cost you to build those houses, get the easement, and pay for all the soft costs of land development. If I were you I would build these out as rentals and then do a cash-out refi so that I could keep them in the family! So you're looking at cashing out 75% LTV. So $830,700 all in is your break-even, anything less on costs on your end is profit.

Now obviously my math is pretty crude, but you get the point. Prefab usually only makes sense when construction costs are very high, because "stick-built" is often cheaper. My guess is that you're in a stick built is cheaper area but you could do more research on this. You could see if there are pre-fabs that are similar to what are in the area for under $50/sf. 

Also, I think your flexibility with holding it in a creative way is good, because perhaps holding on to this land while developing some of it makes the most sense. 

I'm happy to send you my quick and dirty analysis spreadsheet, just PM me. 

Keep us posted on what you decide to do! 

Hi @Kenny Oliver,

I'm currently using short-term private money and paying a lot for it. 11% interest and 3 points plus a lot of fees. If I borrow the money for 1 year then I'll pay nearly 30k in addition to return the principal, what I'm borrowing is less than what you've got sitting in your bank. I can tell you the crowd funding source I'm using for it (PM me). If you can find folks you trust and build relationships with them then you could be the one loaning the money at those rates and never have the liability of a property, have no tenets, etc. This is not passive income because you have to make sure you vet the deals you're investing in, but it's close. There are also a lot of crowd funding platforms that I have looked into and heard good things about but I'm not an accredited investor. I've also got a friend who gets good returns investing with a group that rehabs apartments. PM me if you'd like me to share names! 

Also, in your area, Rialto is going to blow up. You could do new construction there or rehab existing places. I can give you more info if you're interested. 

I think it depends on where you are. I really like agentpro247 and it's much less expensive. If you want me to run a farm list for you I'd be happy to so you can see it. Just PM your criteria and I'll send you the list!

Hi Taylor,

Sounds cool, I'm in escrow on 6 units in North KC and I really like that area. I'm interested in finding flip and BRRR deals so I'd certainly be interested in seeing your wholesales once you get going! PM me if you want to chat marketing leads, I'm just starting to figure out how to find deals.

I'm about to start working with a company out there that seems good, I'll start using them once in close in 1-2 weeks. PM me for the company if you're interested.

How much is the property worth as is?

I've been working with Patch of Land and they seem totally legit, but I haven't closed yet. Seed capital seems like a scam. I'll keep the community posted on my Patch of Land experience!

@Sean Yang

My CPA just does everything and files electronically. I have my return electronically. No paper, no postage. The modern age! 

Hi @Kent Newmark

You're probably all over this but buying a tear down is very different from developing raw land. I help clients with one small part of raw land development, helping them get through the regulations related to biological resources and endangered species. It's a whole different ball game. If you're doing a tear down you at least have a sewer and one water meter plus you don't have a lot of the issues and cost you face developing raw land. 

Commercial lenders can usually lend in most states, so they don't necessarily need to be local.