| Line | Amount |
|---|---|
| Gross revenue — 2,200 SF new build × $245/SF (Wake Forest downtown) | $539,000 |
| Land acquisition + closing (~2%) | ($122,400) |
| Construction — builder cost (2,200 SF × $111 builder grade) | ($244,200) |
| Home On builder margin (20% intro rate; standard 30%) | ($61,050) |
| Site development / infrastructure (public sewer connection, incl. 20% margin) | ($37,500) |
| Contingency (10% of construction, AT COST — typically returned if unused) | ($24,420) |
| Construction loan closing + carry (10% APR, 8-month build) | ($18,338) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($37,730) |
| NET PROFIT TO INVESTOR | -$6,638 · -1.2% margin · -5.1% cash-on-cash — LOSS AT ASKING PRICE |
ARV support: Wake Forest new construction sold comps: 1721 Golden Honey Dr $499,700 (2,580 SF · $193.68/SF); 625 Ramo Grande Dr $437,840 (2,511 SF · $174.37/SF); market range $197–$251/SF per Redfin/Movoto. Downtown Wake Forest modeled at premium $245/SF. Even at top-of-range $260/SF ARV ($572K), net profit = +$22,062 (3.9% margin) — still far below 20% target. MAO for 20% investor margin = $11,850. Asking $120,000 is 10× the MAO.
PASS. Wake Forest carries abundant new construction inventory (35% of active listings), capping ARV well below what is needed to make this land price work. A 2,200 SF builder-grade home produces a small loss at $120K land. The MAO for a 20% investor return is ~$11,850 — the $120K ask is 10× that. If GR3 allows a duplex, model it separately; two units could change the math. Otherwise pass and wait for a motivated price cut below $30K.