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GOOD · 48% MARGIN $250K–$500K project
#1 · 4505 Mitchell Mill Rd (Watkins Pond), Wake Forest, NC 27587
37.02 ac | 3 parcels | MLS 10084045 | Public sewer | $275,000 reduced from $325,000
List price$275,000 (reduced from $325,000, on market ~18 months)
Acreage37.02 ac total — three parcels: 4501 Mitchell Mill Rd (1.86 ac, PIN 1757054441) + 4505 Mitchell Mill Rd (25 ac, PIN 1757065456) + 0 Stells Rd (10.16 ac, PIN 1757177453)
MLS#10084045 (Coldwell Banker HPW — Floyd Barco 919-451-3461)
ZoningWake County (unincorporated) — exact designation UNVERIFIED; assessed as recreational use, not in a subdivision; likely RR or R-30; MUST confirm with Wake County Planning before offer
UtilitiesSEWER: Public (confirmed Coldwell Banker listing). Water: Other/see remarks — well sites on property. Electric: not specified.
StrategyD — Entitlement/paper win: buy below MAO, commission wetland delineation + FEMA flood study, file preliminary residential plat with Wake County, sell entitled lots to homebuilders at $60–$75k/lot
Out-of-pocket cash$111,934 (equity $88,138 + land closing $5,500 + loan closing $3,966 + carry $18,330)
Financed$264,413 bridge/land loan (~75% of project pre-financing costs)
Modeled12 entitled residential lots at $70,000 each; base-case model; conservative floor 8 lots × $60k = $480,000 revenue
Net profit
+$404,853 (base case: 12 lots × $70k; see conservative case in verdict)
Max offer (20%)
$492,495 (base: 12 lots × $70k) | $251,145 (conservative: 8 lots × $60k)
Pro Forma
| Line | Amount |
|---|
| Gross revenue — 12 entitled lots × $70,000 | $840,000 |
| Land acquisition + closing (~2%) — 37.02 ac, 3 parcels, Watkins Pond | ($280,500) |
| Entitlement costs — survey, wetland delineation, FEMA flood study, civil plat engineering, county subdivision fees & permits (at cost, no margin) | ($53,000) |
| Home On builder margin (20% intro rate; standard 30%) | $0 — no construction scope in entitlement-sale strategy |
| Site access / clearing prep (at cost) | ($12,500) |
| Contingency (10% of entitlement scope, AT COST — typically returned if unused) | ($6,550) |
| Entitlement bridge loan closing (1.5% × $264,413) + carry (10% APR on draws, 18 months) | ($23,797) |
| Selling costs (~7%) — paid at lot-sale closings, not out-of-pocket | ($58,800) |
| NET PROFIT TO INVESTOR | ~$404,853 · 48% margin · 362% cash-on-cash |
Lot value comp: active Wake Forest / Rolesville area builder lots estimated $60,000–$75,000 each with public sewer, based on market context (no direct MLS lot-sale comp located; verify with local land broker before underwriting). New construction homes in Wake Forest area sell $467–517k median. Base case 12 lots × $70,000 = $840,000. Conservative floor: 8 lots × $60,000 = $480,000 → $70,053 net, 14.6% margin. MAO base case $492,495; conservative $251,145. Current ask $275,000 is below conservative MAO by only $23,855 — negotiate to ~$250,000 if floodplain reduces lot count below 10.
Diligence Gates
GO: Public sewer confirmed on Coldwell Banker listing. Price reduced from $325k to $275k ($50k cut, 18 months on market — motivated seller). Three-parcel assemblage 37.02 acres at $7,428/acre — deeply below Wake County norms for land with public sewer. Adjacent to Rolesville/Wake Forest growth corridor; Kinsley Subdivision approved nearby on N Main St.
VERIFY: (1) CRITICAL — commission wetland delineation + FEMA FloodMap (FIRM) overlay before any offer; listing language ("flood plains," "waterfront," "habitat for bald eagles / herons," "boating/fishing/camping") suggests significant floodplain — need 10+ buildable acres confirmed. (2) Confirm exact Wake County zoning designation (RR? R-30? R-40?) and minimum lot size via Wake County Zoning/GIS — determines max lot count. (3) Verify public sewer is available for connection at the parcel boundary (not just easement nearby) — call Wake County Utilities. (4) Check Neuse River basin / Mitchell Mill stream 50-ft riparian buffer applicability. (5) Confirm access road (Stells Rd, Mitchell Mill Rd) frontage and county road maintenance. (6) Title search all three PINs; check for easements, deed restrictions, or prior conservation agreements (wildlife habitat language raises question).
STOP: If FEMA flood extent + wetland buffers eliminate more than ~60% of acreage leaving fewer than 8 net buildable lots. If zoning requires 1.5+ acres per lot AND floodplain leaves <12 buildable acres. If sewer connection right is not confirmed at the parcel line.
Verdict
If wetland/FEMA study confirms 10+ buildable lots: this is a GREAT deal at the current ask. The $275,000 price is $217,000 below the base-case MAO of $492,495 (12 lots × $70k), leaving enormous cushion. Even the conservative 8-lot scenario shows $70,053 profit at 14.6% margin — and negotiating to $250k would push that to ~20% margin. Public sewer at $7,428/acre in Wake County is genuinely rare. The risk is binary: if flood maps kill the buildable area, this is a recreational property and a pass. Spend $5,000–$8,000 on a Phase 1 wetland/FEMA study BEFORE signing a purchase agreement, or write a contract with a 30-day due-diligence contingency. Contact listing agent Floyd Barco (919-451-3461) to confirm sewer availability and current zoning designation before investing in a study.