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MARGINAL · 11.6% margin · 51.9% CoC (base $285/SF); 18.2% at $310/SF; 21.6% at $325/SF MARGIN $1M–$5M project
#2 · 613 Craven St / 608 Craven St / 702 Martin St, Durham, NC 27704
11 platted city lots / 613 Craven St + 702 Martin St, Durham 27704 / CREXI listing
List price$750,000 for 11 lots; 5 additional lots at $50,000 each available (up to 16 total)
Lot count11 — already platted city lots; 608 Craven St (2 lots), 613 Craven St (6 lots), 702 Martin St (3 lots)
ListingCREXI/LoopNet commercial listing — Julie Wright Land Co. (updated ~09/27/2026, Active)
ZoningResidential, City of Durham; City may allow additional subdivision + range of housing types per current regs (verify RS/RU type and townhome path)
UtilitiesPublic water and sewer available at street; paved public road frontage on all lots
Strategy11 × 1,600 SF infill homes at $285/SF base ($310/SF optimistic); alternatively explore townhome pairs if zoning permits (better economics)
Comparable salesDurham infill 2025-26: 104 Driver St $274/SF (2,620 SF), 116 Chestnut St $334/SF (2,092 SF near downtown), 1506 N Hyde Park Ave $383/SF (1,200 SF). Small homes $300-383/SF; 1,600 SF homes likely $275-310/SF.
Out-of-pocket cash$1,122,072 (equity $839,269 + land closing $15,000 + loan closing $44,634 + carry $223,169)
Financed$2,975,591 construction loan (~78% of $3,814,860 project)
Modeled11 homes × 1,600 SF × $111/SF builder grade; 20% Home On intro margin; 18-month build/sale cycle
Risk flagDeal only pencils at $310+/SF. Verify buyer demand for $496k+ new homes in this specific Craven/Martin block before committing.
Margin
11.6% margin · 51.9% CoC (base $285/SF); 18.2% at $310/SF; 21.6% at $325/SF
Pro Forma
| Line | Amount |
|---|
| Gross revenue — 11 homes × 1,600 SF × $285/SF (base; $310/SF = $5.456M; $325/SF = $5.72M) | $5,016,000 |
| Land acquisition ($750,000) + closing (2%) | ($765,000) |
| Construction — builder cost (11 × 1,600 SF × $111 builder grade) | ($1,953,600) |
| Home On builder margin (20% intro rate; standard 30%) | ($488,400) |
| Site development per lot × 11 (city lots, public utilities, incl. 20% margin) | ($412,500) |
| Contingency (10% of construction cost × 11, AT COST — typically returned if unused) | ($195,360) |
| Construction loan closing + carry (10% APR, 18-month cycle) | ($267,803) |
| Selling costs (~7% × $5.016M) — paid at sale closing, not out-of-pocket | ($351,120) |
| NET PROFIT TO INVESTOR (base $285/SF) | ~$582,217 · 11.6% margin · 51.9% cash-on-cash
At $310/SF: ~$991,417 · 18.2% margin · 88.4% CoC
At $325/SF: ~$1,236,937 · 21.6% margin · 110.2% CoC |
ARV support: Durham infill new construction (2025-2026) — 104 Driver St $274/SF (2,620 SF, 2025), 116 Chestnut St $334/SF (2,092 SF, 2025), 1506 N Hyde Park Ave $383/SF (1,200 SF, 2026). Smaller 1,600 SF homes likely $275-310/SF in reinvestment areas. MAO $337,272 at $285/SF base — ask is $750k; deal reaches 20% target MAO at $325/SF ARV where MAO = $463k. Negotiate hard or confirm $310+/SF before proceeding.
Diligence Gates
GO: Pre-platted city lots, utilities at street, no infra risk; Durham employment growth tailwind.
VERIFY: Exact zoning type and minimum lot size per parcel; utilities confirmed live at each lot boundary; City affordable-housing set-aside requirements; title search each parcel separately; pull recent permit comps within 0.5 mi of Craven/Martin for sold $/SF.
STOP: Any lot has clouded title or outstanding city lien; zoning prohibits single-family detached; sub-neighborhood comps confirm only $240-260/SF; any lot in floodplain or with drainage issues.
Verdict
MARGINAL: math works at $310-325/SF but not at market average. At $285/SF you net $582k (11.6% margin) — acceptable but not great. At $325/SF you clear 21.6% and $1.24M profit on $1.12M cash — excellent. The key question is whether this specific Craven/Martin block in 27704 supports $496-520k sale prices for 1,600 SF new homes. If so, this is a GREAT deal at $750k ask. If it only supports $285/SF, it is MARGINAL. Walk the block, pull the permit comps, confirm the buyer profile. Also ask about the 5 additional $50k lots — adding them lowers average land cost per unit.