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Posted by
Angie DeRubeis

How much profit could an property owner expect if they partnered with a builder?

I own the lot out right, 5000 sq ft lot, in 77004, would like to build affordable housing in 3rd Ward near UH.

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How much profit could an property owner expect if they partnered with a builder?

By Angie DeRubeis   
Posted on Sep 25, 2017 in Topic: Foreclosures & Investments
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I own the lot out right, 5000 sq ft lot, in 77004, would like to build affordable housing in 3rd Ward near UH.
Status: Open
Viewed: 501
Asked by: Consumer
Posted: 3 months ago
Silver
Michael Jobin
about 3 months ago
Hi Angie,

There are so many variables with your question it is hard to give you an answer. I assume you want to build and then sell the home but you may be thinking of building and renting. It will depend on the type of home and the money you spend to build it. It will also depend on finding the right builder. A good number of builders are developers and would want to buy the land and they build and sell. As an appraiser as well as an agent, I suggest you first hire someone to tell you the highest and best use of the property and then move forward from there.

Michael Jobin, SRES
C&K Properties
713.545.2314


about 3 months ago
Bronze
Yvonne Chauvin
about 2 months ago
Hi Angie,

Not much to add to John's answer- he got it head on. There are many things to consider before you can determine what type of profit you can expect. Comparative rentals in the area, how many units will your building have, what will be your initial investment, the list goes on and on.
Any agent you work with should be able to help you with the comps and net sheets- they can prepare a basic net sheet that will give you a general idea on what type of profit you can expect. But an actual, true number will depend on many factors- including the cost of building, timeline, materials, workmanship, marketing of finished units, property management, the cost of empty units (how long it will take to rent them out will also depend on marketing strategy and market conditions).
There is a lot to consider!
Hope this helps a bit.
Thank you,

Yvonne Chauvin
Better Homes and Gardens Gary Greene
YvonneChauvin@yvonnechauvin.com
281-686-0143


about 2 months ago
Gold
Dominik Szabo
about 2 months ago
Dear Angie,
The builder will definately profit, as for you it depends on what your plan are and how you will execute it.
Good Luck

Call me for a no-cost no obligation Consultation.

Dominik Szabo
Brockway Realty
(832) 844 1724
DominikRealtor.com
The Doctor of Real Estate in Houston Texas
" Professional, Courteous, and Informed "


about 2 months ago
Diamond
Francois Delille
about 2 months ago
Hi Angie,
There is essentially two models:
1) You hire the builder as a contractor and he builds for a fee, hence all the profit is yours
2) You partner with the builder so that the cost of construction and risk is lower and you agree on a profit split with the builder
We have been involved in transactions of both types, feel free to contact us to discuss further.
francois@cozy-homes.com / 713 397 8857


about 2 months ago
Diamond
Darby Grimmett
about 2 months ago
Hi Angie,

There are so many factors to consider when determining a profit. What is your cost basis in the property? How much is the builder going to charge to build? What price do comps support for a sales price? Also factoring in - time on market, holding costs, closing costs, etc.

I highly recommend you start by contacting a Realtor who can assist you in providing market data. This is the first step in determining if the market even supports what you are interested in doing.

Darby Grimmett, KW, 936-827-9217, darby@darbygrimmett.com


about 2 months ago
Bronze
Diana Walton
about 1 month ago
Good morning,

Thank you for posting your question. I am not sure this is the best medium for this question. It's a very broad question with too many missing parts.


Source:


Diana Walton\nRealty Associates\n281.923.1118

about 1 month ago
Silver
Christopher Dayanand
about 4 weeks ago
Angie,

If I owned a land, this is what I would do to see if makes sense and profit.
1. I will run a comp to get an approximate idea what properties sell in that area.
2. I will check with a builder and see how much it costs to build one that suits that area. You don't want to build a mansion in an area where there are houses less than 3000 sq.ft.
3. If the above two makes sense and you see there is a profit in it, I would then shop around for builders and construction bankers
4. Once built, I will switch to conventional loan
5. Finally Sell the house or rent it.

Chris
Coldwell Bankers
www.ChrisRealEstatePro.com
832.859.8698


about 4 weeks ago
Disclaimer: Answers provided are just opinions and should not be accepted as advice.
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