| Line | Amount |
|---|---|
| Gross revenue — 18 townhomes × 1,550 SF × $290/SF (generous; actual comps $172–$195/SF) | $8,091,000 |
| Land acquisition + closing (~2%) | ($867,000) |
| Construction — builder cost (27,900 SF × $111/SF) | ($3,096,900) |
| Home On builder margin (20% intro rate) | ($774,225) |
| Site development — 18 lots × $30K + $35K/lot (incl. 20% margin) | ($1,462,500) |
| Contingency (10% of construction, AT COST) | ($309,690) |
| Soft costs (5% of construction, AT COST) | ($154,845) |
| Construction loan closing (1.5% × $4,998,870) | ($74,983) |
| Carry — 10% APR × 50% drawn × 18 months | ($374,915) |
| Selling costs (~7%) — paid at sale closing, not out-of-pocket | ($566,370) |
| NET PROFIT TO INVESTOR | +$409,572 · 5.1% margin (at $290/SF) · real comps $172–$195/SF → likely negative → PASS |
East Raleigh 27610 comps: DRB Homes new construction at Granite Quarry Dr (2026): 6423 Granite Quarry → $177/SF; 6425 → $181/SF; 6429 → $195/SF. Model uses $290/SF (generous) to show even-best-case. At actual comps ($180/SF): ARV = $5,022,000, investor loses ~$2.3M. MAO = negative at any realistic comp. Price was cut 33% from $1,266,500 → $850,000 but market simply won't support construction.
PASS — the market simply won't support the construction economics. Even after a 33% price cut to $850K, the east Raleigh 27610 new construction market ($172–$195/SF) leaves the investor short. At actual comps, investor loses ~$2.3M+. At the generous $290/SF pro forma above, margin is only 5.1%. Skip unless you believe a major eastward shift in Raleigh pricing will push this corridor to $250+/SF within 2 years — not our thesis today.