| Line | Amount |
|---|---|
| Gross revenue — 14 homes × 2,100 SF × $290/SF (Durham base case) | $8,526,000 |
| Home On builder services — construction incl. 20% intro margin | ($4,079,250) |
| Site development — 14 lots, public W+S in ROW connection | ($525,000) |
| Subdivision infrastructure — 13 new lots | ($568,750) |
| Construction contingency — 10% at cost | ($326,340) |
| Land acquisition | ($699,000) |
| Land closing — 2% | ($13,980) |
| Construction loan closing — 1.5% of $4.83M | ($72,521) |
| Carry interest — 10% APR, avg 50% drawn, 18 months | ($362,603) |
| Selling costs — 7% of sale price | ($596,820) |
| NET PROFIT TO INVESTOR | ~$1,282,000 · 15% margin · MARGINAL — rezone to RS-12 + $300/SF Durham comps needed for GOOD (17.6%) |
ARV support: Northeast Durham new-build corridor estimated $280-300/SF based on market position. Pro forma uses $290/SF conservative. At $300/SF with RS-12 rezone (18 lots): $1,555,000 net · 17.6% margin → approaching GOOD. MAO for 20% target = $284K — $415K below $699K ask; confirms no margin cushion at current pricing. Only viable as a long-hold development play or with confirmed rezone path to RS-12.
This deal pencils at exactly 15% — the MARGINAL floor — with no cushion and a $415K gap between MAO and ask price. Viable only if the RS-20-to-RS-12 rezone is achievable (adds ~4 lots, pushing margin to 17-18%) or if Durham comps firm above $300/SF. Do not submit an offer without first completing a rezone pre-application meeting at Durham planning and verifying W+S tap fees. Lower priority than the two GOOD deals above.