Is anyone interested/capable of developing 2 spec houses in the San Diego area? Here's the story.

1. I am an architect/small time developer. I currently have my architectural office and also a development company.

2. My money/borrowing capacity is currently tied up in a spec deal that is currently under construction.

3. I found a property up the street from where we are currently building that is for sale. I did some very preliminary due diligence on the site, ran some numbers on potential development costs and checked the comps with realtor that I work closely with on deals like this.

4. I like to do this kind of work. I think that this project has a lot of potential for either a pure spec deal or for a someone to get into a house of their own. I am not necessarily interested in personally making a bunch of profit. I would like to run the deal and be a small partner.

Here's the deal.

A. The property is listed @ $175k (for two 50' x 120' lots) There are many other 50' x 100' lots listed in the area for $125k - $175k. (we bought our property down the street for $100k over a year ago). There are no barriers to development as long as we work within the zoning ordinance (no variances). We can do a nice, clean, contempory project (no planning commissions, no public input). The propery is facing west with distant ocean views.

B. I am putting together preliminary designs for ~1800 sf houses (this fits with the market demands in the area) The preliminary costs (based on doing other construction in the area, keeping the house simple, etc are about $200/sf. This is including all construction related soft costs, geotech, survey, architect, engineering, plan check, utility hookups, and construction. This does not include any the cost of the land, holding costs or financing costs.

C. The current market data says that these houses will sell for a minimum of about $550k up to about $650k.

D. Therefore... 1800 sf x 200$/sf = 360k per house. Plus the cost of the land $175k / 2 = $87.5k for a total of $447.5k. This gives a profit of about $100k per house at the low end.

E. The cash requirements would probably be about 40% of the project cost...about $180k. The other 60% could be financed easily through the local bank that is financing our current deal or any other bank. It will probably take $50k - $90k cash to control the land.

You would most likely own the whole project. I would provide my services (within the numbers discussed above) to design and build the project for you. I am NOT the current owner and am in no way associated with the owner, realtor or anyone associate with the property. I simply think this is a good, viable project.

If anyone would be interested and would like to discuss it further, please feel free to email me at [email]kc@kentcoston.com[/email] Serious only