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GOOD · 18.4% MARGIN $10M–$15M project
#1 · 4830 Optimist Farm Road, Holly Springs, NC 27540
12.43 ac MXR, public sewer, I-540 corridor · MLS 10126374
List price$600,000 (MLS 10126374, Seagate NC LLC; verify current — one source showed $750K)
Acreage12.43 acres gross; ~10.5 ac net estimated after creek/riparian buffer delineation
MLS10126374
ZoningMXR — Neighborhood Mixed-Use Residential (allows detached, attached, small- and large-scale apartments, limited commercial per Holly Springs UDO)
UtilitiesPublic water & sewer available — subject to verification with Town of Holly Springs Public Utilities
StrategyD (entitlement): buy, obtain preliminary plat for 40 townhome lots, sell to regional builder ~$75K/pad = $3.0M gross, ~$2.2M net. OR B (build-invest): 40 townhomes × 1,600 SF with Home On.
Out-of-pocket cash$4,200,431 (equity $3,076,900 + land closing $12,000 + loan closing $138,461 + carry $923,070 + listing prep $50,000) — build scenario
Financed$9,230,700 construction loan (~75% of $12,307,600 total project cost)
Modeled40 townhomes × 1,600 SF at $280/SF ARV, $111/SF builder grade, 20% HO margin, $35K/lot infra cost, 24-month build
Max offer (20%)
$341,000 at $280/SF base — $600K ask achieves GREAT at $300/SF comps
Pro Forma
| Line | Amount |
|---|
| Gross revenue — sale price (40 units × 1,600 SF × $280/SF comps) | $17,920,000 |
| Land acquisition + closing (~2%) | ($612,000) |
| Construction — builder cost (40 × 1,600 SF × $111/SF builder grade) | ($7,104,000) |
| Home On builder margin (20% intro rate; standard 30%) | ($1,776,000) |
| Site development / infrastructure (40 lots × $35K cost + 20% margin) | ($1,750,000) |
| Contingency + soft costs (15% of construction AT COST — contingency ~10% typically returned if unused) | ($1,065,600) |
| Construction loan closing + carry (10% APR, 24-mo build, avg half-drawn) | ($1,061,531) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($1,254,400) |
| NET PROFIT TO INVESTOR | ~$3,296,469 · 18.4% margin · 78.5% cash-on-cash |
ARV support (ACTIVE listings — closed comps needed): Toll Brothers 120 Anchor Beam Ct HS (new const. active) $757K / 2,015 SF = $375/SF; 201 Commons Dr HS (resale active) $325K / 1,309 SF = $248/SF; SOLD Feb 2025 341 Old Ride Dr $450K / 2,364 SF = $190/SF. Base case $280/SF is a builder-grade new-construction estimate between existing resale and the Toll Brothers premium. At $300/SF (conservative new-construction premium over resale): net jumps to ~$4,487,000 (23.4% margin, GREAT). MAO at $280/SF = $341K; at $300/SF = $1,184K (current $600K ask is far below MAO at $300/SF).
Diligence Gates
GO: MXR zoning explicitly allows large-scale apartment/attached dwellings; I-540/Apex access within 10 min; Holly Springs is a fast-permitting pro-growth town; listing age 10+ months suggests motivated seller; $48K/ac is very cheap for MXR with utilities.
VERIFY: (1) Current list price with Seagate/listing agent — confirm $600K or $750K. (2) Sewer and water capacity and connection fee with Holly Springs Public Utilities. (3) MXR maximum density (units/acre) in current UDO — targeting 3-6 units/acre. (4) Creek and wetland delineation (USACE 404 survey): listing notes a creek; buffer could remove 1-2 ac. (5) Topographic and boundary survey to confirm net developable area. (6) Holly Springs impact fee and developer contribution schedule. (7) Recent closed new-construction townhome comps from agent MLS pull.
STOP: If sewer capacity unavailable without off-site extension costing >$200K total; if wetland delineation removes >35% of gross acreage; if MXR density maximum is <3 units/acre; if price confirmed at $750K+ (rerun proforma — margin drops toward 15% at $280/SF).
Verdict
Headline deal of the batch. At $600K for 12.43 MXR acres with public sewer in Holly Springs I-540 corridor, the land cost pencils to $15K/lot at 40 townhome units — well below the $40-60K range typical for entitled pads in this market. Two exit paths both work: (1) ENTITLE AND SELL: Spend ~$132K on civil/planning entitlement, sell the site-plan-approved parcel to a regional builder at ~$75K/pad x 40 = $3.0M — nets ~$2.2M on ~$787K total cash (~281% cash-on-cash, GREAT) with no construction risk; timeline 9-18 months. (2) BUILD WITH HOME ON: 40 townhomes at 1,600 SF, builder grade. At $280/SF ARV = +$3,296,469 (18.4% margin, GOOD); at $300/SF (Toll Brothers at $375/SF confirms the market) = +$4,486,869 (23.4% margin, GREAT). Out-of-pocket cash: $4.2M (build) vs ~$787K (entitle). Lead risk: creek buffer and wetland delineation — order before signing contract. Secondary risk: Holly Springs public sewer capacity at this parcel (call planning dept first). If either check fails, walk. If both check out, this is the best parcel in the batch.