All Forum Posts by: Syed H.

out our way to much competition for the dirt only way you would make 45% profit on gross sales price is if you basically stole the land or got it for free.  I wish we could make 25 to 30 % routinely but when I am competing with Lennar and Dr Horton for dirt.. you simply don't see that..  

So lets say we sell a new spec for 500k  NO way are we making almost half in net profit.. 

500k house is about 2200 sq ft  build cost  120 a foot or 280k that would only leave 40k for a shovel ready lot.. and shovel ready lots are 100 to 140k in our market for 500k exits Also you have cost of capital you have tax's utls insurance and marketing costs ( real estate commissions) ..  So like I said you would have to get the dirt for free or next to free to make that kind of margin.. based on market exit prices.

Sure, I could be dead wrong. Please share $500k condos in 2009-2011 that went 4x and now sell for $2m, 8 8-10 yrs later. Thanks

@Syed H.

Did I say it should be impressive I just wanted to point out that I know real estates

Prices never dipped in NYC like that to give you 100%+ returns. Consider it a success if you made 20%-30% gains over the last 10 yrs in NYC.

Marrisa not to get off topic but i am curious.. what kind of NET margins do U make in Perth on new builds like this.. IN our markets we aim for 15% net profit.. so a 500k new build about 75k in NET profit minus office expenses .. many times its 8 to 10 and occasionally we hit 20% or better but thats not common.. I sold one in Charleston this year and hit 30% on a 2.2 mil retail sales price which is my record on a SFR new build.. but in our subdivision type projects like this one you posted as i said 10 to 15% 50 to 75k per house. last year we build 34 of these like you built.. and thats about where are numbers came out..

IN todays market in Perth could you duplicate what you did in 2015 ?

Also I have heard with the mining boom in WA is in decline did this cause any devaluation of sales prices in Perth. And for US folks reading Sydney and and EA and WA is a 5 to 6 hour flight apart just like CA  is that far from GA.. 

@Syed H.

Dude I own real estate worth around 2 million...

 Perhaps, but the dev. zones in CT are war zones. You need to carry a gun to protect yourself. Especially when the crips and bloods are in the area. The ones in New York (outside the city) have all been scouped up by the big devs. Same as in most major urban areas in NJ like Newark, Hoboken, Jersey City, Kearny, Elizabeth and The Oranges. You have Irvington left, and the numbered streets of Newark, but it's pretty dangerous. We were looking at a building across from a police station in Newark, NJ. There were gun shots fired, the cops didn't even leave the station to investigate. 

I was looking recently at MFH in SF, most listings that are currently contingent or pending have a CAP rate of around 4.5%.....That is where one can break even after 20% down...

I remember just a year ago, CAP was 1.5% and you need 40% down to break even...

Love to hear your thoughts over this..

I am currently in contract on a small condo, trying to close escrow by July 1..... But for MFH purchase, I am waiting for 6% CAP...Dont call me greedy...