| Line | Amount |
|---|---|
| Gross revenue — 2 homes × 2,800 SF × $350/SF (Forrest Creek Estates comp-supported) | $1,960,000 |
| Land acquisition + closing (~2%) — Lot 1 Orange Grove St, 3.63 ac | ($265,200) |
| Construction — builder cost (5,600 SF × $111 builder grade) | ($621,600) |
| Home On builder margin (20% intro rate; standard 30%) | ($155,400) |
| Site development — 2× well + septic systems (incl. 20% margin) | ($157,500) |
| Subdivision infrastructure — 1 new lot carved out (incl. 20% margin) | ($43,750) |
| Soft costs — design/permits/survey (5% of builder cost, AT COST) | ($31,080) |
| Contingency (10% of builder cost, AT COST — typically returned if unused) | ($62,160) |
| Construction loan closing + carry (10% APR on draws, ~14 months) | ($73,518) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($137,200) |
| NET PROFIT TO INVESTOR | ~$412,592 · 21.1% margin · 98.8% cash-on-cash |
ARV support — Hillsborough (27278) custom new construction 2026: Forrest Creek Estates 3,200 SF/$1,150,000 ($359/SF), 4,446 SF/$1,635,000 ($368/SF), 2,990 SF/$1,250,000 ($418/SF); mid-range custom 420 W Corbin St $975k/3,087 SF ($316/SF); market avg $262/SF (Sep 2026). Modeled at $350/SF (conservative relative to Forrest Creek). MAO $297,763 — $37,763 cushion below $260k ask; at $340/SF MAO = ~$259k (essentially at ask).
GOOD — buy at or below $260k asking, proceed immediately to order 2nd perc test ($500-$1,500). If the second perc passes: 2 custom homes at 2,800 SF each return $412,592 net profit (21.1% margin, 99% cash-on-cash) with $417,690 out-of-pocket. The MAO at $350/SF is $297,763 — the current ask is $38k below that with nearly $100k in additional buffer before the deal turns marginal. Fallback single-home scenario (if 2nd perc fails): $96,785 net / 9.9% margin at $350/SF — still positive but below the 20% threshold. Hillsborough's luxury custom market ($359-$456/SF at Forrest Creek Estates) strongly supports the $350/SF model for a premium wooded-lot product.