The long awaited construction cost and profit projections are finally in!
When asking for a construction loan from a bank, they will often ask you to come up with a projections for your cost and your net profit. So over the past week or so, I spent some time getting some bids in for certain portions and talking to my mentor about certain costs and this is what I’ve come up with.
On the conservative side we’re looking at a net profit of $65,000 over the course of 6 months. Not bad in my mind, but many ask do you really think its worth the hassle for 6 months to construct and sell a residential home only to make $65,000 on it.
Here’s my answer to that question: HELL YES!!! Because for me the goal is not only to be doing 1 of these a year, but to get to a point where I’m consistently doing this with 5-10 properties a year! I’m not trying to be a small developer who does 1 property a year, nor am I trying to be the next Toll Brothers or Pulte Homes - I know what my limits and boundaries are and will stay within them, so I don’t stretch myself to think and end up foreclosing on my properties.
Attached is a cost|profit projection sheet including all the costs I will encounter with the exception of my interest paid during the construction phase.
All my numbers are fairly conservative, so if I do this right I should make a minimum of $60,000 and if do it like a Champ I can make upwards to $100,000.
Lets wait and see!
