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MARGINAL · 19.6% MARGIN $1M–$5M project
#2 · 620 Sunnybrook Road, Raleigh NC 27610
1.06 ac R-6 inside-beltline lot, SE Raleigh BRT corridor — MLS #10162024, 183 ft road frontage
List price$395,000
Acreage1.06 acres (46,173 SF; 183 ft road frontage)
MLSTriangle MLS #10162024 — Active
ZoningR-6 Residential; inside Raleigh beltline; Frequent Transit Area overlay (Wake BRT corridor)
UtilitiesPublic water, public sewer available; electricity, natural gas, cable
Existing structureSmall single-family home on site — demolish for development
TransitWake County BRT corridor: Downtown Raleigh to New Hope Rd — construction began Fall 2025, completion 2028
Density precedentR-6 in transit overlay: comparable 2.5-acre R-6 site developed 32 townhomes (12.8/acre); modeled 10 units on 1.06 ac (9.4/ac — conservative)
StrategyEntitle R-6 townhome density under transit overlay; build 10 townhomes × 1,800 SF; ARV $295/SF base, $300/SF upside
Out-of-pocket cash$1,159,701 (equity + land closing + loan closing + carry)
Financed$2,739,450 construction loan (~75% of project)
Modeled10 townhomes × 1,800 SF; builder cost $111/SF; $295/SF ARV = $5,310,000 base; $300/SF = $5,400,000 upside
Pro Forma
| Line | Amount |
|---|
| Gross revenue — 10 townhomes × 1,800 SF × $295/SF (SE Raleigh ITB BRT-corridor new construction) | $5,310,000 |
| Land acquisition + closing (~2%) | ($402,900) |
| Construction — builder cost (10 units × 1,800 SF × $111/SF builder grade) | ($1,998,000) |
| Home On builder margin (20% intro rate; standard 30%) | ($499,500) |
| Site development / demo + subdivision infrastructure (10 lots, incl. 20% margin) | ($452,500) |
| Soft costs — design, permits, survey (5% of construction, AT COST) | ($99,900) |
| Contingency (10% of construction, AT COST — typically returned if unused) | ($199,800) |
| Construction loan closing + carry (1.5% closing + 10% APR, 18-month build, avg 50% drawn) | ($246,551) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($371,700) |
| NET PROFIT TO INVESTOR | ~$1,039,149 · 19.6% margin · 89.6% cash-on-cash | upside at $300/SF: ~$1,122,849 · 20.8% margin · 96.8% COC |
ARV support: 1511 E Lane St, Raleigh 27610 (SE Raleigh/inside beltline) active 2026 new construction $675,000/1,767 SF ($382/SF single-family). Townhomes price at a discount to detached SF; modeling $295/SF for 1,800 SF units in the BRT corridor. MAO $375,000 — asking $395,000 is $20k over MAO at $295/SF ARV. At $300/SF ARV this deal achieves 20.8% margin at current ask.
Diligence Gates
GO: R-6 zoning confirmed inside beltline; public water/sewer available; BRT designation established with construction underway; no HOA on record; precedent density of 12.8 units/acre on R-6 transit parcels documented.
VERIFY: City of Raleigh UDO — confirm 10 townhomes by-right (or via administrative approval) under R-6 Frequent Transit Area overlay; this is the critical gate. Pull active new-construction townhome comparables in 27610 to validate $295/SF ARV. Determine if existing home has rental value that offsets demo cost or must be vacated before permit. Check 644 Sunnybrook Rd (adjacent ~1.08 ac, same zoning, also $395k) — combined 2.14 ac acquisition supports 20–25 units and improves project economics.
STOP: If transit overlay requires conditional-use or rezoning petition (adds 6–18 months and cost); if single-home build is the only by-right path ($395k land grades PASS on single-home math — only 7–9% margin).
Verdict
MARGINAL at $395k ask and $295/SF ARV — 19.6% margin, just under the threshold, with strong 89.6% cash-on-cash. The deal tips over 20% at either $300/SF ARV or $375k land price. The BRT completion (2028) and inside-beltline location support the $295–300/SF case. KEY GATE: City of Raleigh must confirm townhome density is by-right under the transit overlay before this becomes actionable — call the City planning desk before any offer. If density is confirmed, move quickly; this corridor is attracting attention. Single-home build on this $395k lot does not work (PASS).