SSS #238: Introducing Project Fairmount


Quotes of the week:

Quote of the Week


Livin' La Vida Luna y Luca

Bluey 42... Bluey 42... Set Hut!

We celebrated the kids' birthdays last weekend with friends and family.

4 & 2. Wild.

Another One

Your boy is at it again.

It's only May and I'm locked into 3 project starts for the year. There may or may not be more coming down the pipe. 🤫 🤐

Current Status:

Our scheduled closing date is August 31st, 2024.

The sellers are in their 80s and moving into a senior living facility. They're taking their sweet time with the transition.

Which works for us!

They've been amenable to letting us get all of our ducks in a row before closing. We already got the survey, tank sweep, and architectural plans done.

R&D: Ripoff & Duplicate (Myself)

Project Fairmount is inspired by what we did at Project Washington.

Although we set a record for the neighborhood with the sale of Washington, my partner and I believe there's room for improvement.

Here's the first floor from Washington (old project):

And here's our proposed floorplan for Fairmount:

The major changes:

  • Added an office (w/ French Doors)
  • Converted powder to a full bath so the office can double as a guest room
  • Killed the "Living Room" and converted it to a Small Sitting Room
  • Moved Mudroom adjacent to the garage
  • Moved Walk-In Pantry adjacent to the kitchen
  • Added a Butler's Pantry

Not shown in the image above:

  • Office will have windows on the side of the house as well
  • Office will have direct access to full bath
  • Transom Window in Shower
  • Window at the stair landing
  • Garage & Mudroom will be slightly longer
  • 9' Ceilings Throughout

The Numbers:

Let's quickly run through the numbers here.

We'll start with three buckets of expenses and end with our expected After Repair Value.

Cost to Buy:

The acquisition costs come out to $810K

Acquisition Costs

Cost to Build:

We expect to spend $730K on the build (including carry).

Build Cost

We expect this house to be 4,250sf of finished space including the basement and attic.

An average build cost of $150/sf brings us to just under $650K on Labor & Materials.

This is essentially the same budget we have for Project Hillside.

The interest portion is based on the following table:

Loan Terms

We should be able to outperform these loan assumptions. For reference: we are closing Project Silver Spring in a few weeks at 70% of purchase and 100% of construction at 0 points and 11.65% interest.

Cost to Sell:

The last expense bucket is the cost of sale, which we project to be $120K.

Cost of Sale

After Repair Value:

We set the comp in this market. 😤

Washington sold for $2,010,000.

In the spirit of staying conservative, we underwrote to $1,950,000.

What's Next?

We have quite a bit of time on our hands.

Over the next 4 months, we will submit for building permits, finalize our hard money loan, and look for more deals.

Get Involved!

The cash requirement to fund this deal is $475K.

I'm keeping half of it for myself and looking for a private money lender to take the other half.

If you're interested in participating, please shoot me a text, reply to this email, or schedule a call with me by clicking here.