| Line | Amount |
|---|---|
| Gross revenue — 4 homes × 1,400 SF × $325/SF (conservative South Durham comp) | $1,820,000 |
| Land acquisition + closing (~2%) | ($117,300) |
| Construction — builder cost (5,600 SF × $111/SF builder grade) | ($621,600) |
| Home On builder margin (20% intro rate; standard 30%) | ($155,400) |
| Site development — 4 lots, public sewer hookup (incl. 20% margin) | ($150,000) |
| Subdivision infrastructure — 4 new lots, roads/utilities (incl. 20% margin) | ($175,000) |
| Soft costs — design, permits, survey (5% of construction, at cost) | ($31,080) |
| Contingency (10% of construction, AT COST — typically returned if unused) | ($62,160) |
| Construction loan closing + carry (1.5% + 10% APR, 18-month phased draw) | ($88,596) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($127,400) |
| NET PROFIT TO INVESTOR | ~$291,464 · 16.0% margin · 69.9% cash-on-cash (at $325/SF); improves to ~19% at $340/SF |
Durham infill comps (general): 1606d Juniper St (2025) $389K/1,197 SF = $325/SF; 2816 Cascadilla St (2025) $430K/1,201 SF = $358/SF; 1457b Maplewood Dr (2025) $289K/$242/SF. South Durham / Hillside Park is likely at the lower end ($275–$325/SF). Modeled conservative $325/SF. Upside: Durham downtown 5 min away supports $340–$360/SF for well-finished product; at $340/SF net ~19%; at $350/SF net ~22%. MAO $80,000 at $325/SF — ASK is $115K, land is ABOVE MAO at conservative comp; deal only pencils at $325+/SF.
Intriguing at $115K for 0.85 acres with public sewer — the land cost is genuinely low. But two un-verified constraints make this MARGINAL: (1) the blue-line stream may eliminate 25–35% of the gross area, limiting to 3–4 homes rather than 5–6; (2) road access is via easement, which must be confirmed adequate for a 4-lot subdivision. Conservative model (4 homes × $325/SF) yields 16% investor margin — below target. At $340/SF the math approaches 20%. Worth pursuing only after a site walk, a Durham GIS stream analysis, and a call to the listing agent to test whether the seller will accept $85–95K given the constraints.