| Line | Amount |
|---|---|
| Gross revenue — 22 townhomes × $430,000/unit (hypothetical — sewer physically blocked) | $9,460,000 |
| Land acquisition + closing (~2%) | ($510,000) |
| Construction — builder cost (22 × 1,500 SF × $111 builder grade) | ($3,663,000) |
| Home On builder margin (20% intro rate; standard 30%) | ($915,750) |
| Site development / infrastructure (22 lots × $65K cost, incl. 20% margin) | ($1,787,500) |
| Contingency (10% of construction, AT COST — typically returned if unused) | ($366,300) |
| Construction loan closing + carry (10% APR, 18-month build) | ($504,470) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($662,200) |
| NET PROFIT TO INVESTOR (hypothetical — sewer pump station blocked) | ~$1,050,780 · 11.1% margin · 49% cash-on-cash — BELOW 20% TARGET even if sewer resolved |
ARV support: Holly Springs townhome comps: 341 Old Ride Dr sold $450,000 (2,364 SF = $190/SF, Feb 2025); 201 Commons Dr listed $325,000 (1,309 SF = $248/SF); market median townhome listing ~$400K. Modeled $430K/unit ($287/SF) for 1,500 SF. At $500K/unit ($333/SF, above median), margin reaches 20.8% in theory — but sewer pump station is at capacity with no timeline, making any permit impossible. MAO: negative at current townhome pricing ($0 effective).
PASS. The sewer pump station serving these parcels is at capacity and the Town has given no timeline for expansion — confirmed hard STOP. Even if sewer capacity is eventually restored, the townhome pro forma only reaches 20% margin at $500K/unit (vs. ~$400K market median), and the MAO for a 20% investor return is effectively $0 at current prices. The MR land use designation and Peterson Station context are genuinely attractive for a future play. Monitor for Town pump station update; revisit only if (a) sewer capacity is confirmed within 12 months AND (b) land price falls at least 30%.