How is the land cost sub-sonic? I have a feeling that a lot of these guys understate their true costs living in somewhat of a fantasy world. Was the land that he is building on purchased a long time ago?
Just outside of DC, around Vienna, VA, their are (or were) tons of lots with decrepit buildings or just empty space–amazing as it sounds. One day, you would be driving past what looked like just dead space, the next they would drag out trees and such–and reveal a buildable lot. It was really quite impressive as it happened quite a bit, and only 10 or 15 miles outside of downtown DC.
The guy I talked with would buy a ~15,000 sqftlot for (if I recall) ~$400k, which was a major increase for the area, and plunk down 8-10 2000sqft (multi-story) TH and a parking lot for about $2.5M. So $2.5 + 0.5=$3M cost total. So it’s 300-400k per unit. At the time, the things were going for $700-800k, and more in the hip areas. But I know the land was much more expensive in those areas.
Crazy.
