| Line | Amount |
|---|---|
| Gross revenue — 2,600 SF × $420/SF (North Hills new const estimate) | $1,092,000 |
| Land acquisition ($575,000) + closing (2%) | ($586,500) |
| Construction — builder cost (2,600 SF × $111 builder grade) | ($288,600) |
| Home On builder margin (20% intro rate; standard 30%) | ($72,150) |
| Site development (single lot, public sewer, incl. 20% margin) | ($43,750) |
| Contingency (10% build cost + $22,500 demo, AT COST — typically returned if unused) | ($51,360) |
| Construction loan closing + carry (10% APR, 11-month cycle) | ($49,461) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($76,440) |
| NET PROFIT TO INVESTOR (build-invest) | ~-$76,261 · LOSS · PASS MAO $341,940 — ask needs to drop $233k (41%) for investor viability Build-own all-in: ~$1,091,821 for custom 2,600 SF in North Hills |
Same North Hills comps as 4900 N Hills Dr. Even at $450/SF profit = $11,738 (1% margin — not viable). Land inflation has priced single-lot North Hills teardowns out of investor math. MAO $341,940 at $450/SF ($233k below ask). $25k price cut is insufficient — needs another $233k off.
PASS as investment — produces a loss at $575k. A $25k price cut is not enough; needs $233k more off to reach investor MAO. The better North Hills build-own lot is 4900 N Hills Dr ($499k, no demo). If the buyer is committed to this specific block/street and accepts the demo risk, all-in is ~$1.09M for a custom 2,600 SF home — comparable to buying finished new construction at the low end of the North Hills new construction range. Always get an asbestos test before committing to tear down a 1973 home.