Livin' La Vida Luna y Luca
We went to a birthday party an hour away in the middle of the day. Turned on Disney Lullabies, and they were out like a light - even mommy.
Introducing Project Bennington 🏠
We're a little late to the Bennington party. We actually closed on this property 2 weeks ago. We put it under contract 2 months ago. And the main reason I haven't written about it yet is because we just figured out the business plan here.
Before we get to that, a quick story about how we acquired this project.
It all started with our fake check mailer. The seller called us to see if we were real. Once I shared the seller's name with my partner, his exact words were, "I think I know that last name. Hold on, I'll call you back."
5 minutes later...
"Yeah, I went to their son's wedding. He married my wife's friend from college. I'll go to the appointment."
The connection was real. They liked our offer, but there was a catch. The seller needed help finding their next home, so we tasked our preferred agent in this town with finding it. They were under contract to buy their next home within a few weeks.
Business Plan
This home sits on an oversized lot. The by-right build allows for a 3,200sf home between the first and second floor. A simple variance would get us to 3,500sf.
The extra 300sf seems nominal, but it could increase our After Repair Value by ~$150,000 (assuming $500psf on the outsale).
The variance, however, would take anywhere from 3-6 months ($30-60K in hold) to get approved and cost an additional $10-20K in fees. Everyone knows I'm a gambling man, so I was all-in on going for the variance. Putting $50 on the line for a 70/30 shot at making an extra $150 are my kinda odds.
But my partner isn't a degenerate, thankfully. He convinced me to take the bird in hand. The deal still worked with the smaller house, and we'd take it full-cycle a lot faster. If we avoid getting a variance, there's a good chance we can get a family into this home over the Summer of 2026.
The Numbers:
Now let's quickly run through the numbers here.
Acquisition Costs:
Our purchase price was $900K. After closing costs, prepaids, and fees, we'll be all in for $950K.
Cost to Build
We will have 1,465*2+1,741=4,671 of finished livable space, including the basement.
4,671sf * 150$/sf = just under $800K in build cost including interest.
Cost of Sale
I'm happy to pay nearly a 6-figure commission on this sale. But that new NJ Mansion Tax still gets my knickers in a twist.
After Repair Value:
This is my first project in this town. And there's a lot of new inventory on the market.
We underwrote the sale to $2,250,000, but the appraisal came in slightly higher at $2,300,000.
Here it is. What do you think? Should we keep the doggy dormer or get rid of it
Hit reply and LMK. 🙏🏽✌🏽
What I'm Working On...
