| Line | Amount |
|---|---|
| Gross revenue — sale price (ARV: 2,200 SF × $400/SF; Chapel Hill 27516 new construction) | $880,000 |
| Land acquisition + closing (~2%) | ($325,890) |
| Construction — builder cost (2,200 SF × $111 builder grade) | ($244,200) |
| Home On builder margin (20% intro rate; standard 30%) | ($61,050) |
| Site development / infrastructure — public sewer/water (incl. 20% margin) | ($37,500) |
| Contingency (10% of construction AT COST — typically returned to investor if unused) | ($24,420) |
| Construction loan closing + carry (10% APR on draws, 12-month build) | ($33,475) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($61,600) |
| NET PROFIT TO INVESTOR | ~$91,865 · 10.4% margin · 43.4% cash-on-cash (base case $400/SF) — 20% threshold requires $452+/SF ARV |
ARV support: limited direct comps for Elkin Hills neighborhood — Chapel Hill 27516 new construction range: $245/SF (586 Middleton Pl, 1,913 SF, sold Nov 2025) to $326/SF (101 Standing Rock Rd, 6,586 SF luxury, sold Dec 2025). Elkin Hills neighborhood context: home sizes 816-2,324 SF per market data; close to downtown Chapel Hill (walkable). 20% investor margin requires $452/SF ($994k for 2,200 SF) — achievable for premium positioning but NOT guaranteed given available comps. MAO at base $400/SF = $285,867; MAO at $460/SF (premium scenario) = $331,010. Ask of $319,500 is below MAO only at $460+/SF ARV.
MARGINAL for standard build-to-sell — $319,500 for 0.24 acres in Chapel Hill's Elkin Hills neighborhood needs $452+/SF ARV for the investor to hit 20% margin. At the more likely $380-$430/SF range for mid-grade construction here, margins run 4-16% — below the 20% bar. BEST PATH (1): Owner-builder — this cleared corner lot with dual street frontage and all utilities in Chapel Hill's city limits is an excellent build-own site; build at $400/SF ARV and you're acquiring a 2,200 SF home for ~$727k all-in vs neighborhood new construction listing at comparable prices, with $212k out of pocket. (2) Duplex play — Chapel Hill R-2 allows duplexes by-right per June 2023 ordinance; a 2-unit build could improve returns but faces tree canopy compliance (40% required, lot is cleared) and appraisal barriers. Price cut from $350k and location close to downtown Chapel Hill make this worth watching — bring as a build-own option to clients seeking custom Chapel Hill builds.