| Line | Amount |
|---|---|
| Gross revenue — Lot 1 (existing 4/3 home, 2,166 SF, sold as-is, near downtown Chapel Hill) | +$540,000 |
| Gross revenue — Lot 2 (1,700 SF new build × $350/SF — Chapel Hill new construction comp) | +$595,000 |
| Land acquisition + closing (~2% of $400k) | ($408,000) |
| Subdivision completion — final engineering, survey, recording (at cost) | ($20,000) |
| Existing home prep/staging (at cost) | ($15,000) |
| Construction — builder cost (1,700 SF × $111/SF builder grade) | ($188,700) |
| Home On builder margin (20% intro rate; standard 30%) | ($47,175) |
| Site development / Lot 2 utility connection (incl. 20% margin) | ($37,500) |
| Contingency (10% of construction, AT COST — typically returned if unused) | ($18,870) |
| Soft costs — design/permits (5% of construction, at cost) | ($9,435) |
| Construction loan closing + carry (1.5% closing + 10% APR on $558k, 7 months) | ($24,667) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($79,450) |
| NET PROFIT TO INVESTOR | ~$286,203 · 25% margin · 131% cash-on-cash |
ARV support: Chapel Hill new construction comps — 306 Hickory Dr ($365/SF new build), 113 Black Bear Ct ($300/SF, est. completion Oct 2026); conservative $350/SF used for Lot 2. Existing home (4/3/2,166 SF near downtown CH): comparable CH homes $500k–$600k; modeled $540k conservatively. MAO $460,000 — listed $400k, a $60k cushion below MAO at 20% margin.
Lead this week. A $400k buy (well below the $460k MAO) on a preliminary-subdivided Chapel Hill infill yields ~$286k profit at 25% margin on only $219k out-of-pocket. The math relies on (a) the existing 4/3 home being in saleable shape and (b) the sewer easement translating to an active Lot 2 connection — both verifiable this week with a phone call to Divine Realty & Auction Group. ALTERNATE SCENARIO: If the existing house is demolished and both lots sold raw at $350k each, the deal still returns ~$206k profit (29% margin, all-cash ~$445k OOP). Either scenario clears the bar. Target offer $390k–$400k.