Building Four Homes For The First Time
I admire all of you who had made a success of yourselves in real estate...bless you and your vision to dream!
My dad and I just bought a lot in Colusa County California,100x150 R-3, up to six units may be built. County is all for building infill and encourages these four units we showed them. Well, we just started crunching numbers and after all the impact fees, and all the other dues, we are looking at each unit to cost us about 160k (1500 sft,3/2.5,2car,2stry) for a total budget cost of $640k. We plan to retail out each one between $200k and $220k. Is this something seasoned investors would not touch for all the headaches to come in for the next six months for a spread of $240k? I do not know what a seasoned small developer would be inticed to pursue, what percentage would he/she calculate to get a descent return for this project? or is this a typical return on a investment like this? because if it is...man.. you guys are rhinos! All guts to find glory! 
Again, I admire those of you who make happen!
double check your numbers.
Have you looked at the requirements of AB 800 (construction defect insurance)
you can do construction up there for a bit over 100/sq ft?
Seems tight. break it down in to a line item excel and really look at the numbers.
You have to set your own profit margins.
Assume that if you have never done this before the costs will be greater then you expect.
Get some bids from contractors. Consider having an architect or other supervise the full project and specify the materials so that the contracts can bid on the same detail. You will pay an added charge for the architect to supervise but you will also get tighter controls on the construction costs. In the best case the savings will equal or exceed the architect's fees for overseeing the project.
I do not know how much cash you have vs if you will need a lender to provide financing. Remember to fact in any financing costs. If this is completely self-funded then consider the return on your investment vs. investing the funds some where else.
The deal does not sound bad. It will definitely be a learning experience. Be careful about your enthusiasm as it might cause you to rush forward rather then crunching all the numbers.
Assuming you go forward with this deal, keep detailed records so you can learn from this. If it turns out different from what you expected you want to study why and to pinpoint where you can do things differently. This way you can do a second project but improve the odds.
John
[addsig]
Does the $640K include "soft costs" --such as costs for engineering and legal -- to get the parcel subdivided? Also, have you closed on the property or put it under contract?
Thank you John and Nancy...
Yes we closed escrow already and the $640k does include soft costs...engineering and hardmoney fees. I am glad you mentioned about the parcel subdivision fees I will double check on those, I believe that was part of the civil engineer bid, but I will check with the planning department for their subdivision map fees. Thank guys.