Livin' La Vida Luna y Luca
Luca's face says it all: How many hugs does a girl need?
Luna: MORE!
Introducing Project Hobart 🏡🏡
My partner purchased this property over the Summer of '25. Since then, he subdivided it into 2 separate lots.
His original plan was to sell both lots to another developer, bank the spread, and keep it moving. I casually offered to give him a second bite at the apple, and after mulling it over for a few weeks, he agreed.
For those unfamiliar with the term, a second bite at the apple is business jargon for taking a portion of profits off the table today, retaining equity, and ultimately taking more profits at a later date.
When done correctly, it's a win-win-win situation.
He wins today by selling it into a new entity and realizing the forced equity via subdivision. I win because I have two new projects to bring to my investors. We win because this bolsters our 2027 outsale pipeline.
Run it Back!
Instead of R&D (Ripoff & Duplicate), we're Runnin' it Back with two different homes my partner has built before, both of which sold pre-completion.
Hobart 1 & 2
This is what the homes will look like with some slight variations.
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.
Acquisition Costs:
The purchase price is $700,000 ea. After closing costs, prepaids, and fees, we'll be all in for $723,000 ea.
Cost to Build:
We're building a 6 bed, 5 bath, ~5,000 square-foot home (including basement & garage). At $150/sf, we're looking at a build cost of roughly $725K.
We'll spend just over $90K between interest, insurance, taxes, and utilities.
Cost to Sell:
Between commissions, closing costs & associated fees, we'll spend just under $130K on the sale. I removed staging and rendering costs because I don't expect us to go to market, and an agent will procure renderings on our behalf.
After Repair Value:
We underwrote this sale to $1.85M ea.
Lender's appraisal came back at $2M ea.
I take a lot of pride in underwriting more conservatively than our 3rd-party vendors and then outperforming their opinions. But on this one, we'll likely land somewhere in between.
What's Next?
Our closing date is scheduled for 5/1/2026. Both Hard & Private Money lenders are ready to go. Plans are close to getting finalized, so we can hit the ground running and deliver these homes in Q1 of '27.
✌🏽&❤️
What Else I'm Working On...
