Does this pencil out?

[XBoxBoy]

I’m seeing a lot of fancy spec homes coming to completion in La Jolla lately. And I’ve been wondering just how motivated these developers will be. Problem is, I don’t have a good enough sense of what the costs are to know when people are making money or losing money in these deals. So, wondering if you knowledgable piggys can shed some light on this deal:

http://www.sdlookup.com/MLS-076089919-8656_Glenwick_Ln_La_Jolla_Ca_92037

Looks like the lot was bought in 2004 for $2,075,000.
Then a new house of 4,950 sq ft was built.
And it just sold for $4,000,000

My guess/estimates are as follows:

initial purchase $2,075,000
4,950 sq ft at $350 per sq ft. $1,732,500
loan carrying costs $300,000
other costs?

Now, mind you, I’m just guessing at $350 a sq ft, and not sure if that should include swimming pool, landscaping, etc. I’m also not sure about architect fees, permits, and other costs.

So, my guess would be that this developer is taking a bath. But I’m really just guessing on that. Can some of you who are knowledgable about this sort of thing chime in and either confirm or refute my guesses.

Thanks,

XBoxBoy

[toddt]

$350 might be high for hard costs if he’s a builder (which it looks like). For the finishes I see here, I’d say $225-250 hard costs as a single-story, plus the following:

– Pool is small – 75k
– Landscape – 200k
– Architect – up to 200k if a name architect, $75-100k if a ‘regular’ architect, and as low as 25k or less if a designer
– Other professional fees – structural engineer, designer, etc. – maybe another 75k
– Permits – 50-75k (since I don’t see any big grading needs on that lot)

There’s a $3M construction loan on the property, with another $750k equity line, so clearly there wasn’t a lot of equity to say the least.

[toddt]

$350 might be high for hard costs if he’s a builder (which it looks like). For the finishes I see here, I’d say $225-250 hard costs as a single-story, plus the following:

– Pool is small – 75k
– Landscape – 200k
– Architect – up to 200k if a name architect, $75-100k if a ‘regular’ architect, and as low as 25k or less if a designer
– Other professional fees – structural engineer, designer, etc. – maybe another 75k
– Permits – 50-75k (since I don’t see any big grading needs on that lot)

There’s a $3M construction loan on the property, with another $750k equity line, so clearly there wasn’t a lot of equity to say the least.

[toddt]

$350 might be high for hard costs if he’s a builder (which it looks like). For the finishes I see here, I’d say $225-250 hard costs as a single-story, plus the following:

– Pool is small – 75k
– Landscape – 200k
– Architect – up to 200k if a name architect, $75-100k if a ‘regular’ architect, and as low as 25k or less if a designer
– Other professional fees – structural engineer, designer, etc. – maybe another 75k
– Permits – 50-75k (since I don’t see any big grading needs on that lot)

There’s a $3M construction loan on the property, with another $750k equity line, so clearly there wasn’t a lot of equity to say the least.

[toddt]

$350 might be high for hard costs if he’s a builder (which it looks like). For the finishes I see here, I’d say $225-250 hard costs as a single-story, plus the following:

– Pool is small – 75k
– Landscape – 200k
– Architect – up to 200k if a name architect, $75-100k if a ‘regular’ architect, and as low as 25k or less if a designer
– Other professional fees – structural engineer, designer, etc. – maybe another 75k
– Permits – 50-75k (since I don’t see any big grading needs on that lot)

There’s a $3M construction loan on the property, with another $750k equity line, so clearly there wasn’t a lot of equity to say the least.

[toddt]

$350 might be high for hard costs if he’s a builder (which it looks like). For the finishes I see here, I’d say $225-250 hard costs as a single-story, plus the following:

– Pool is small – 75k
– Landscape – 200k
– Architect – up to 200k if a name architect, $75-100k if a ‘regular’ architect, and as low as 25k or less if a designer
– Other professional fees – structural engineer, designer, etc. – maybe another 75k
– Permits – 50-75k (since I don’t see any big grading needs on that lot)

There’s a $3M construction loan on the property, with another $750k equity line, so clearly there wasn’t a lot of equity to say the least.

[Author]

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