In Real Estate Deal Talk Episode 5, I’m going to share the basic details for a project involving a new build on a lot where only the bare bones of the previous structure still remain.
The lot is located on Stokeswood Avenue in Atlanta, and as you can see in the video that you can access here, it seems like a really nice neighborhood with some pretty solid values. Judging from the neighbors’ yards, this has some really nice curb appeal. So our plan to buy and build on this property looks to be working out pretty nicely so far.
The property in question is an empty lot—kind of. It’s hard to tell how many years ago, but there was a house here and you can still see the bare bones structure—the foundation—of the home through the overgrowth. The foliage makes it looks a bit like an urban green area.
We were told by one of our colleagues that the entire project for this is pretty much wrapped up with the city, to the point where we have the building permit and site plan squared away, and we even have images of how the home should look that were emailed to us. That’s cool, but we were also told that the lot was cleared of trees and other debris. As you can see in the video, however, that is not the case. So that will be an added expense we need to factor in to our numbers.
We were given an asking price of $130,000. I’m thinking about going back and countering at about $100,000 to $105,000, just because of the work that needs to be done. I’m not happy that they were not truthful about clearing the lot, especially because we could easily come out and check on it for ourselves
So here are our numbers: We are looking at $130,000 purchase price, worst case; but if we negotiate, we can probably get it down to $105,000 to $110,000. I’m not sure how much it will cost to clear the lot, but we will allocate between $15,000 to $20,000 for that.
The new structure we plan to build will be a one-story with about 1,800 to 1,900 square feet. It should be a nice and easy total build that we can knock out in six months. Overall building costs should be about $120,000, so we’re in it for $250,000. We are looking at potential resale between $369,000 and 379,000 on this particular house, so we’re excited to get going and get this done.
You can watch the video here: