I own a large lot in a highly sought after neighborhood. I've decided against building a house myself, so I'm trying to explore all of my options as far as making a profit from it. A realtor told me that I could make more money if I hooked up with a builder and put a spec house on versus just selling the lot outright. However, she didn't specify what percentage of the total profit I would share in when the house sells, so I'm looking for help.
2007-06-12 14:06:16 · 4 answers · asked by hog_bond 1 in Business & Finance ➔ Renting & Real Estate
You can make as much of the money as you like, as long as the construction company agrees to the terms.
Remember two things - there is a record surplus of unsold homes on the market. This means that new homes take longer to sell, and sell for less than they used to - so analyze your market. Second thing - construction companies have over built, and a lot of them are feeling the squeeze right now - so you may be able to get a great deal for getting a new house built. Again, analyze your market.
2007-06-12 14:22:50 · answer #1 · answered by Christopher B 6 · 0⤊ 0⤋
Whatever amount you negotiate with the builder. And what if it doesn't make a profit, then what? It would seem in this scenario, you are at the mercy of the builder, and as an investor, I don't know if this is the position you want to be in.
If you owned a number of lots, that advice might be sound, but on its face, it seems like a big gamble with one lot.
If you do decide to pursue this, make sure you have a rock solid contract about the allotted budget for the home, what happens if there are budget overruns, time frame and dispersement of profits.
2007-06-12 14:40:55 · answer #2 · answered by godged 7 · 0⤊ 1⤋
Whatever you can negotiate with the builder.
2007-06-12 14:17:28 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Consult with your lawyer.
2007-06-12 14:09:33 · answer #4 · answered by newyorkgal71 7 · 0⤊ 0⤋