| Line | Amount |
|---|---|
| Gross revenue — 31 lots × $85,000 (rezoned, sewer extended — SPECULATIVE) | $2,635,000 |
| Land acquisition + closing (~2% × $750,000) | ($765,000) |
| Entitlement costs — rezoning application, planning, survey, legal (at cost) | ($100,000) |
| Home On builder margin (20% intro rate; standard 30%) | $0 — entitlement play; no construction performed by Home On |
| Sewer extension to site (at cost, speculative — distance TBD) | ($300,000) |
| Contingency (10% of entitlement + sewer, AT COST — typically returned if unused) | $0 — embedded in estimates above |
| Holding / carry — 24-month entitlement + annexation timeline (bridge interest) | ($100,000) |
| Selling costs (~4% on land sale) — paid at closing, not out-of-pocket | ($105,400) |
| NET PROFIT TO INVESTOR (SPECULATIVE — requires rezoning + sewer) | ~$1,264,600 · 48% margin · ~100% cash-on-cash (STRAIGHT BUILD at $750K land: NEGATIVE at any realistic ARV — see gates) |
Holly Springs new-construction comps: 113 Dunton St sold 5/20/2026 $875K / 2,817 SF = $310.61/SF; 440 Dunton St (active adult community) $1,120,009 / ~2,872 SF = $390/SF; market median $237/SF, middle half $210–$264/SF (Redfin). Straight build analysis (8 estate lots, 3.96 ac each, well + septic, 2,800 SF homes at $250/SF): per-lot all-in cost = $692,904 vs. revenue $644,000 (= NEGATIVE $48,904/lot). Even at $300/SF ($840K/home), margin = 9.7% — below 20% target. MAO for straight build (8 lots, $300/SF): land must be ≤$586,040 total (current ask $750K is $163,960 OVER build-play MAO). Entitlement/rezone MAO (31 lots @ $85K): up to ~$2.0M — ask is well below. Deal only works if: (1) seller accepts ≤$586K, OR (2) rezoning + sewer extension are achieved and lots sell for $85K+ to a builder.
This property does NOT work as a standard residential build at current ask: straight-build model is NEGATIVE at any realistic ARV (up to $300/SF tested). The ONLY paths to profitability are: (A) Negotiate land below $586,040 (22% below current ask) for an 8-lot estate build, OR (B) Execute a longer-game entitlement: annex to Holly Springs ETJ, extend sewer, rezone to allow 30+ lots, and sell to a builder (~$1.26M modeled profit, 48% margin — but highly speculative, 24+ month timeline). The motivated-seller signal (25% drop in 5 months) means a countered offer at $550–575K may be accepted — at $560K, the straight-build MAO is met and the deal becomes viable. RECOMMEND: Submit a low offer ($550K) or pass — do not pay $750K without a confirmed entitlement path in hand.