| Line | Amount |
|---|---|
| Gross revenue — sale/appraised value ($270/SF × 2,600 SF) | $702,000 |
| Land acquisition + closing ($120,000 + 2%) | ($122,400) |
| Construction — builder cost (2,600 SF × $111 builder grade) | ($288,600) |
| Home On builder margin (20% intro rate; standard 30%) | ($72,150) |
| Site development / infrastructure ($30,000 cost + 20% margin) | ($37,500) |
| Contingency + soft costs (10% + 5% of $288,600, AT COST — typically returned if unused) | ($43,290) |
| Construction loan closing + carry (1.5% of $422,955 + 10% APR avg 50% drawn 7 mos) | ($18,680) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($49,140) |
| NET PROFIT TO INVESTOR | +$70,240 · 10.0% margin · 43.4% cash-on-cash (BUILD-OWN: all-in $583K vs. $709K retail median — save ~$126K) |
ARV support: Wake Forest new construction median sold $216/SF; median home $709K (Redfin Oct 2026). Builder-grade communities selling $176–$191/SF; premium infill estimated $250–$280/SF. Model uses $270/SF (upper comp range for city-sewer infill near Downtown Wake Forest). At $270/SF: investor margin = 10%, cash-on-cash = 43%. MAO for 20% investor margin at $270/SF = $99,390 (list $120K is $20,610 over investor MAO). At $285/SF ARV: MAO = $129,980 — deal pencils for investor if premium pricing is achieved. Build-own value: all-in $582,620 vs. retail $709K = saves $126,380 (17.8%).
This lot is best suited for a client who wants to build a custom home in Wake Forest with city sewer at below-retail cost. All-in construction runs ~$582,620 vs. the $709,000 median retail price for new Wake Forest homes — a savings of roughly $126,380 for a fully custom 2,600 SF home on a city-utilities lot near Downtown. For a pure investor building to sell, the economics are MARGINAL: at $270/SF ARV, net profit is +$70,240 (10.0% margin, 43% cash-on-cash) — below the 20% target. Investor margin hits 20% only if ARV reaches $285+/SF, which requires premium finishes and strong buyer demand. RECOMMEND: Ideal as a build-own play. Suggest for any client on the build-own waitlist who wants city utilities and a Wake Forest address. Price is fair and negotiable.