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GOOD · 8.4% MARGIN $15M–$20M project
#2 · 4505 Mitchell Mill Rd (Watkins Pond), Wake Forest, NC 27587
37.02 ac, public sewer, Watkins Pond, price reduced to $275K, MLS 10084045 | Wake Forest, NC 27587
List price$275,000 (reduced from $325,000 on 7/31/2026 — 15.4% cut; 557 days on market; motivated seller)
Acreage37.02 acres across 3 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)
MLS10084045 (Coldwell Banker HPW — Floyd Barco, 919-451-3461)
ZoningVERIFY — MLS states "Zoned in Wake Forest, NC" with no classification; likely Wake County R-20 (20,000 SF min lots) or Town of Wake Forest jurisdiction; density determines lot count and returns
UtilitiesSewer: Public Sewer confirmed in MLS; Water: "Other/See Remarks" — likely well; budget $55K/lot site dev if well required instead of $30K
Strategy3-phase: acquire land, survey and plat 25-lot subdivision, build and sell 25 new 3,000 SF homes at ~$720K ARV over 36 months
Out-of-pocket cash$5,067,944 (equity $3,386,250 + land closing $5,500 + loan closing $152,381 + carry $1,523,813)
Financed$10,158,750 construction loan (~75% of $13,545,000 total project)
Modeled25 lots, 3,000 SF builder-grade homes at $720,000 ARV ($240/SF); 36-month build-out; public sewer / well water
Pro Forma
| Line | Amount |
|---|
| Gross revenue — sale price (25 homes × $720,000 — Wake Forest new construction comps) | $18,000,000 |
| Land acquisition + closing (~2%) | ($280,500) |
| Construction — builder cost (3,000 SF × $111 builder grade × 25 homes) | ($8,325,000) |
| Home On builder margin (20% intro rate; standard 30%) | ($2,081,250) |
| Site development — public sewer per lot ($30K × 25 = $750K cost) + subdivision infra ($35K × 25 = $875K cost), incl. 20% margin each | ($2,031,250) |
| Contingency (10% of construction cost $8,325,000, AT COST — typically returned if unused) | ($832,500) |
| Construction loan closing (1.5% × $10,158,750) + carry (10% APR × 50% drawn × 36 months) | ($1,676,194) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($1,260,000) |
| NET PROFIT TO INVESTOR | ~$1,513,306 · 8.4% margin · 29.9% cash-on-cash |
Wake Forest new construction comps: median new construction listing $709K; $195–$204/SF overall market; 2,800–3,200 SF new homes routinely list at $650K–$750K. Modeling $720,000 ARV ($240/SF × 3,000 SF) — conservative relative to the $709K new-construction median listing. If zoning allows 35 lots instead of 25: revenue scales to ~$25.2M, profit to ~$2.6M on similar CoC. MAO at 20% investor target margin: construction costs alone exceed the available budget at 20% (Home On 20% intro margin + 20% investor target requires land near free); at $275K land price investor achieves 8.4% margin / 30% CoC. Land basis of $275K / 37 acres = $7,432/acre — extremely low for a public-sewer parcel near Wake Forest ($700K+ new construction market).
Diligence Gates
GO: Public sewer confirmed — rare for large rural parcels near Wake Forest; motivated seller (15.4% cut, nearly 2 years on market); $7,432/acre basis is extraordinary for this market.
VERIFY: (1) Zoning classification — call Wake County Planning (919-856-6335) or Town of Wake Forest Planning (919-435-9510) to confirm R-20 vs. R-40 vs. Town jurisdiction; this determines lot count (20–50+ lots) and drives returns; (2) Water — confirm well permit requirements and cost; if public water is accessible, site dev cost drops; (3) Wetlands/pond — "Watkins Pond" is a feature; order wetland delineation to determine buildable area vs. buffer; Neuse River basin buffers likely apply; (4) Floodplain — check FEMA FIRM maps for Mitchell Mill Rd area; (5) Sewer provider and connection capacity — confirm availability for 25+ EDUs with the Town of Wake Forest utilities; (6) Deed restrictions and any prior covenant limiting use; (7) Water source — "Other/See Remarks" is unclear.
STOP: If more than 30% of buildable area is encumbered by wetlands/floodplain/buffers, lot count drops materially. If only 10 lots are achievable, returns remain positive but modest; re-evaluate below $150K ask.
Verdict
Motivated seller, rare public-sewer acreage, deep price cut after 18 months — this is worth a phone call today. At 25 lots and $720K ARV: net profit ~$1.51M (8.4% margin, 30% CoC) across 36 months on ~$5.1M out-of-pocket. If zoning allows 35 lots: profit scales to ~$2.6M (similar CoC). The "Watkins Pond" feature, if retained as an HOA amenity, could command a 3–5% ARV premium on adjacent lots. Primary risk is unknown zoning density and wetland/pond constraints — both are quickly verified with a call to the county and the listing agent (Floyd Barco, 919-451-3461). The 557-day market time and two price cuts suggest the $275K ask may have further room; an offer at $225K–$245K is defensible. Recommend: call listing agent to confirm zoning and sewer capacity; if answers are favorable, LOI at $240K with 45-day DD and wetland/zoning contingency.