Livin' La Vida Luna y Luca
I thought it would be a good idea to count their trick-or-treat haul.
Turns out they’re now old enough to understand 195 pieces last more than a weekend. 😬
Introducing Project Southdown 🏡
My friend & business partner on Long Island has been looking for a new primary home for a little more than a year.
A few months ago, he found something in one of the best school districts in New York State.
After running the numbers, I helped him realize this opportunity served him better as a project than a primary home.
He took the feedback seriously, pivoted his approach, and invited me to join him on the project.
We've made a lot of progress since then. We delayed closing to reduce our upfront carrying costs, hired the architect who drew Silver Spring, finalized floor plans for a ground-up new construction, and most importantly, he closed on another home as his new primary. Win-win-win.
The Numbers:
Let's quickly run through the numbers.
We'll start with three buckets of expenses and end with our expected After Repair Value.
Acquisition Costs:
We're purchasing the dirt for $1,375,000.
We're not paying transfer or mansion tax on behalf of the seller. That extra 2% represents the buyer-paid State of New York Mortgage Recording Fee.
After everything, we're looking at roughly $1,450,000 out the door... to get in the door. 😅
Cost to Build & Carry:
OpEx
Thankfully, we have our plans finalized pre-purchase, and my partner has done this project once or twice before (to a much smaller scale). We feel really confident we can meet or beat this build number. Lord help us if we spend more than $1.85M.
Assuming we're close-to-close in 12 months, we're looking at just over $200K in interest, taxes, and utilities.
Cost to Sell:
Buyer pays the Mansion Tax in New York State, and the Transfer Tax is pretty light compared to New Jersey.
Still almost a Quarter-Mil toll to get rid of this place.
After Repair Value:
There are half a dozen comps that support our ARV, but these two are the most recent & closest in proximity.
We're shooting for every bit of $4,500,000. I know that sounds crazy, but hey..
Our lender's appraiser seems to think we're underpriced by $25K.
Plus, I already started interviewing agents in the area, and one says they may have sparked some interest at our number.
We must obviously take this feedback with a grain of salt. 1) They could just be trying to get the listing & 2) Interest & Intent are opposite ends of the spectrum when it comes to buying a $4.5M home.
What's Next?
We present to the Planning Review Board on 11/30, and if all goes well, we'll close soon after.
💰 I'm likely keeping a large portion of the capital required to close on this deal for myself to reduce exposure, but if you're interested in getting involved, just hit reply and let me know. 💰
In the meantime... here's a sneak peek at the plans for your viewing pleasure:
✌️&❤️