All Forum Posts by: Scott Key

We are under contract on one of five spec builds - identical homes on a replatted lot. We secured a cash-buyer for a much higher sales price than we had expected (hooray). We feel fortunate on a number of fronts, but we felt nervous about the house appraising properly if we had a buyer using bank financing.

The margin on this first build will allow us to pay off the rest of the land and will give us enough equity in the project so that the bank won't require anymore cash invested on our side to finance the other four builds. We're debating the merits of holding versus selling as the ultimate goal for both of us is to get into rentals eventually.

Here are the numbers:

* Land Cost (paid off): $33k/lot
* Build Cost: $130k/house
* Simplified Total Cost: $166k/house
* Anticipated Sale Price: $315k/house
* Anticipated Rent: $2k-2.5k/house

From a hold perspective, it's not quite a 2% unicorn, but it's a 1.2-1.5%-er for a brand new construction which is pretty tempting.