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From the top down

February 9, 2007

Basing most my work on retail and sub agreements I’ve found it tough at times to pick up the feed thrown by other contractors and customers. Then, this winter almost all came to a crawl if even that at times. I’ve dabbled in home flipping and been a part of the spec machine, however, just about every-time I’ve ended up like a monkey in the jungle trying to break a coconut for his next meal…..Believe it or not, that metaphor was inspired by my wife’s cooking.

So there I sat all broken hearted and some interesting approaches came to me. Knowing the general costs involved in phase by phase for the actual task preformed, maybe I should start at the top down. Off I go on my high horse here to save the day.

I began researching several counties around to determine the fastest growing urban sprawl from it’s metro area. I then calculated, per area, the amount of homes selling, there square footage and listing prices. This gave me a square foot listing rate, kind of like, what are they willing to pay to get here.

My next step was to dig up every piece of property per area. It’s availability, amenities, taxes, condition and anything that might jump out like a tiger, while I concentrate so heavily on my coconut. By then adding lot size and utility availability I could determine a per acre cost on land for each area.

Buy overlaying these two demographics I can easily reach the “what and where” to build factors. The average size home per area gives me the “how big” and the average square foot list price gives me an idea what to expect.

Knowing the ins and outs of my construction costs only enable me to determine a possible profit margin early. It’s just a matter of what I live on while awaiting the sale, popcorn or steak, but it’s good old coconut in the end.

This whole package makes a very interesting portfolio for a possible investor presentation. Most I’ve spoken with have’nt seen it done quite in this manner. To me, it only seemed to make common ….cents.

Written by Bob Anderson · Filed Under Business 

Comments

2 Responses to “From the top down”

  1. Cole on February 13th, 2007 12:42 am

    Great Article!

  2. Bob Anderson on February 13th, 2007 5:28 am

    Thanks Cole.

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