SSS #294: Project Silver Spring Update

Livin' La Vida Luna y Luca

Spotted: Mickey flag during our after-dinner walk.

Project Silver Spring Update:

We're under contract to sell Project Silver Spring!

The offer came in on Sunday, May 18th. My agent called me as I was organizing the shoe rack at the entrance of our home. Thankfully, I was already on the floor because what she told me would have knocked me off my feet.

The offer was good... really good. And it couldn't have come at a better time. We were gearing up to list the property right after Memorial Day Weekend and my anxiety nearing the finish line was at an all-time high.

I get so freaking nervous when bringing a product to market. Did we get every detail right? Will people like it? Does the house scream, "Buy Me Now!". Is it good enough? Am I good enough?

I wonder how many single-family developments I'll have to take full-cycle before the imposter syndrome wears off. Feels like I have a long way to go.

In the meantime, we're sprinting towards a June 26th closing date. We have our work cut out for us because the buyers requested a few changes to the existing floor plan.

I'll get to that and where else we went wrong in a second. But first, let's talk about what went right.

Bought Right

There's a saying in Real Estate Investing: "You Can't Change Your Basis", which basically means if you overpay for a piece of property, you are SOL.

We bought Silver Spring off-market for $1.375M in July of 2024. That was a short 4 months after a house down the street (on an inferior lot) sold for $1.6M in March of 2024.

That discount was too hard to pass up, and that extra margin is making all of the difference.

Built Right

We could have done new construction, but we opted to do an addition + renovation instead.

We still managed to get 10' ceilings on the first floor and 9' ceilings on the second, which means we get the new construction feel on a renovation budget.

We also chose great properties to R&D: Ripoff & Duplicate.

For the exterior, we channeled a home that sold for $3.35M in a neighboring town.

For the interior, we took inspiration from this home developed by Split Rock Custom Homes out of St. George, Utah.

Valued Right

My original underwriting assumed we'd sell this home for $2.95M. At the time, it was a bit of a reach, given the location of the property.

But after what my partner and I were able to achieve on Project Washington, I had the utmost confidence in our ability to execute on our vision and deliver a product the market would absorb quickly. We ended up exceeding our expectations by a healthy margin.

Right Buyer Avatar

Buyer Avatar

Our buyers here fit the bill: Asian, 37.5-45yo, 2 kids, work in NYC.

Here's what I missed...

Next Generation Suite

I thought my idea to create separate living quarters for grandparents would be the main selling point of this home. That ended up NOT being the case with this particular buyer.

They are converting the sitting area of our in-law suite into a playroom for their children. They also went so far as to request we remove the kitchenette.

I don't consider myself wrong, however. This buyer didn't need the space as we intended it to be used, but that doesn't mean someone else wouldn't have appreciated it.

My logic was (& still is) that this home is best suited for multi-generational living. I imagined a couple with young kids from NYC would sell their 2 bedroom apartment to move here. And to make things more affordable and enjoyable, they'd invite their parents to sell their homes in the suburbs and move in as well.

Maybe that's just the Gujarati in me speaking. 🤷🏽‍♂️

Over Budget:

Our final numbers aren't in yet, but we are SO past the point where it's safe to say we didn't budget properly for this build.

The original budget for labor and materials was $750K. We're probably going to land closer to $1M. That's almost $175/sf (5,800sf of livable space). 😬

The problem with doing high-end homes is getting carried away with high-end finishes.

The plumbing fixtures in this home are ELITE. One of the guest bathrooms is outfitted with Brizo faucets from sink to shower.

The light fixtures throughout are multiple tens of thousands of dollars.

Each bathroom has a mirror that costs as much as the latest iPhone.

It's Quiet Luxury. No one will know, except the owners.