Download PDF
← Back to overview
MARGINAL · 15.5% (base); 20%+ requires ≥$380/SF ARV or ≤$204K land price MARGIN $500K–$1M project
#3 · 516 N Maple St + 517 Spruce St, Durham, NC 27703
0.18 acres · 2 SFH lots · permits approved · MLS 10193318 · East Durham near Downtown
List price$240,000 (both lots combined)
Acreage0.18 acres total (~2,600 SF per lot)
MLS10193318 (listed 9/17/2026 — 6 days on market, very fresh)
ZoningR-3 (City of Durham)
UtilitiesPublic water & sewer connected to both lots
StrategyBuild 2 separate SFH homes on individually subdivided lots; sell
Out-of-pocket cash$187,649 (equity + closings + carry + listing prep)
Financed$468,330 construction loan (~75% of project)
Modeled2 × 1,200 SF builder-grade SFH @ $420K/unit ($350/SF); permit-approved plans
Margin
15.5% (base); 20%+ requires ≥$380/SF ARV or ≤$204K land price
Pro Forma
| Line | Amount |
|---|
| Gross revenue — 2 homes × $420K ($350/SF East Durham new construction) | $840,000 |
| Land acquisition + closing (~2%) | ($244,800) |
| Construction — builder cost (2,400 SF × $111 builder grade) | ($266,400) |
| Home On builder margin (20% intro rate; standard 30%) | ($66,600) |
| Site development / infrastructure (2 lots, sewer at lot, hookup only, 20% margin) | ($20,000) |
| Contingency (10% of construction, AT COST — typically returned if unused) | ($26,640) |
| Construction loan closing + carry (1.5% closing + 10% APR, 10 mo) | ($26,539) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($58,800) |
| NET PROFIT TO INVESTOR | ~$130,221 · 15.5% margin · 69.4% cash-on-cash |
ARV uncertainty is the central risk. Durham overall median $227/SF (Aug 2026). East Durham near Downtown is a rapidly gentrifying corridor; recent new construction near the American Tobacco District / downtown axis has commanded $320–$400/SF. Modeling $350/SF ($420K/home) is in the middle of that range. Deal only pencils at 20%+ margin if: (a) new-construction comps verify ≥$380/SF in this specific block, OR (b) land is negotiated to ≤$204K (~$102K/lot). MAO $204,500 vs. current $240K ask = $35,500 over. A counter at $195–$205K resets the math.
Diligence Gates
GO: Both lots legally subdivided with separate addresses; permits fully approved by City of Durham; public sewer and water connected; R-3 allows SFH on each lot; only 6 days on market — motivated seller possible; low $187,649 cash requirement suits smaller investors.
VERIFY: Pull recent sold comps for NEW CONSTRUCTION within 0.5mi of N Maple St — this is the single go/no-go gate; confirm exact lot dimensions via Durham GIS for setback compliance (lots are ~2,600 SF — tight); confirm approved plans allow minimum 1,200 SF home per lot; negotiate price to $195–$205K target.
STOP: If new construction comps in this specific block are below $310/SF (deal at a loss at list price); if lot setbacks restrict buildable footprint below 800 SF; any environmental issues (East Durham has historical industrial use nearby); if permits have outstanding conditions.
Verdict
Fresh listing, low capital entry ($188K OOP), permits in hand — but the margin is thin at list price. At $350/SF the investor nets +$130,221 (15.5%, 69.4% CoC). To hit 20% margin either (a) negotiate land to ≤$204K (about a $36K cut from ask), or (b) confirm new construction comps ≥$380/SF in this block. This suits an investor with limited capital (under $200K) who wants a quick 12-month turnaround in a gentrifying area. Best play: offer $195,000–$200,000, verify comps before closing.