Closed Yesterday On First Subdivision
Some of you may remember the subdivision I have been working to acquire. It came to final fruition yesterday! We acquired 36 lots left over in a nice deed restricted subdivision.
A big thank you to those on here who encouraged me and gave me tips along the way.
Almost was not able to close. Bank had approved me solo for the 85 raw acres next door (same seller, closes on the 21st) but said I needed partner for the subdivision. They didn't like my partners cash flow. Closing was looming too close for comfort. Seller would not amend date. My partner and I had to come to table with between 600,000 and 750,000 cash toclose! We did it.
I don't know about the bank, but I sure like my partners cash flow or his cash reserves anyway. He put up the bulk of the money.
Now, I am a developer LOL 
Our game plan is this: put ads in local paper---- Spring Lake Pines Subdivison; New Ownership. Use your own approved builder. Spec houses OK. Possible owner financing.
What do guys think of that idea above? This area is hot for building with very little lots available to home owners except exclusive builders only ones. We may finance, or subordinate, to some builders to get some homes going up right away. and/ or get a builder to build one for us on spec
By the way, would love to hear some ideas about marketing to investors who want to build spec homes. My initial thoughts would be get a local builder who would build for a smaller margin to market to investors who want to build a home to sell to end user. Is this practical? Is there enough margin for the builder and the investor to both make money?
Congrats!!!! May I please ask, HOW DID U GET STARTED?!?!? Thanks, Tim 8-)
Congrats! Don't underestimate what it will cost to market these lots! You may need to put tens of thousands of dollars into the marketing. Don't skimp on signs...they are the single most important advertising technique in my opinion.
GOOD LUCK
Quote:
On 2004-05-08 10:22, Ricker wrote:
By the way, would love to hear some ideas about marketing to investors who want to build spec homes. My initial thoughts would be get a local builder who would build for a smaller margin to market to investors who want to build a home to sell to end user. Is this practical? Is there enough margin for the builder and the investor to both make money?
Ricker,
Congratulations.
About your questions, if you could supply some more info, that may help some people to give you their thoughts. What would the new home on the lot sell for to the end user? Will you and your partner have to install horizontal improvements or was that already done?
Nancy
Ricker,
Congrats!
Find the builders in your area who can take down 36 lots a one time. Try to get an introduction to the bulder or cold call if you have to then make a quick flip and go on to your next project.
How do you find such builders? Talk to your bankers, drive around to other subdivisions, or talk to your county asseccor or building and zoning.
Good luck!
pspiers: hat is exactly what I was doing during my due diligence phase! I shopped the heck out of this thing. I know lots of builders and bankers as I am third generation family here. I stirred up so much interest in that place I knew I had better close or someone else would.
Today, Sunday, mothers day, one of my RE friends called me at home and said he had showed it Saturday to a builder. Guy wants to take down all 36 lots. Price? 65% more than I closed for Friday! The man is taking his banker back out there Tuesday.
I am crossing my fingers. :-D
Quote:
On 2004-05-08 10:22, Ricker wrote:
By the way, would love to hear some ideas about marketing to investors who want to build spec homes. My initial thoughts would be get a local builder who would build for a smaller margin to market to investors who want to build a home to sell to end user. Is this practical? Is there enough margin for the builder and the investor to both make money?
Ricker,
If it were me I would not even be marketing to "investors." You need to take this deal to established builders that are capable of taking down the number of lots you are talking about or wanting to sell off. Marketing to new investors is going to be a slow going process and you will have to find a lot of buyers. If you make the right phone calls you can sell the entire package to one company. This is a business deal for a builder and it will take them about 10-20 minutes to figure out of the numbers appear to work and decide to go to a contract. There is one thing a good builder will never do willingly...lower their profit margin! also...Congratulations! As long as you did your due dilligence correctly and ran your numbers and know the market you will and can do very well.
Nancy, all improvements are done. Underground utilities, roads, street lights, all of it.
20 or so houses already built. We simply bought the remaining unsold lots. Homes and lots pkg sell for 140k to 240k in there. Which is little to much higher end than starter homes for this area.
[ Edited by Ricker on Date 05/09/2004 ][ Edited by Ricker on Date 05/09/2004 ]
Quote:
On 2004-05-08 11:29, HasSpoken wrote:
Congrats!!!! May I please ask, HOW DID U GET STARTED?!?!? Thanks, Tim 8-)
TCI, baby, TCI!
And networking.
Update: Have sold ten of the lots to one builder and have several other builders looking at lots.
The market here is hotter than ever.
Thanks for the tips earlier.
Congratulations on your success!
What made you choose this area of RE?
Actually, just sort of fell into this deal. Started in other area of RE