| Line | Amount |
|---|---|
| Gross revenue — 8 units × $460K (Southpoint/US-70 corridor comps) | $3,680,000 |
| Land acquisition + closing (~2%) | ($458,898) |
| Construction — builder cost (11,200 SF × $111 builder grade) | ($1,243,200) |
| Home On builder margin (20% intro rate; standard 30%) | ($310,800) |
| Site development / infrastructure (8 lots × $35K cost, incl. 20% margin) | ($350,000) |
| Contingency (10% of construction, AT COST — typically returned if unused) | ($124,320) |
| Construction loan closing + carry (1.5% closing + 10% APR, 16 mo) | ($152,342) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($257,600) |
| NET PROFIT TO INVESTOR | ~$782,840 · 21.3% margin · 100.5% cash-on-cash |
ARV support: Southpoint Durham townhomes $340K–$615K, median $449,444 (Dec 2025). Modeling $460K/unit ($329/SF) for new construction 1,400 SF townhomes near US-70/Southpoint corridor is in line with existing market range and represents a modest new-construction premium. MAO $493K vs. $449,900 ask = $43K cushion at 20% margin. At $475K/unit the investor nets +$894,440 (23.5% margin, 115% CoC).
Solid pipeline play — the seller has done the entitlement legwork and the building plans are complete. At $460K/unit the investor nets +$782,840 (21.3% margin, 100.5% CoC). MAO $493K gives a $43K cushion over the $449,900 ask. Critical due-diligence item: verify the approval is in-hand, not merely pending. If approved, this clears the bar comfortably. If still pending, treat as an entitlement risk and negotiate price down accordingly (~$390–$410K range). At $475K/unit the investor nets +$894,440 (23.5%).