I’m try to decide if we should build a single family home in FL or sale the land. I owned 1/2 acre land in North Port and we are in the middle of choosing a builder. We are thinking to sell it and invest somewhere else.
What do you think?
If it were me, I’d build and sell, but it’s going to take you longer to get your cash back.
I say you need to know your costs first. An agent can help you figure out what the home would be worth and how much it would cost you to sell. A CPA can tell you how each scenario may affect your taxes. Once you get all of the information in front of you, make an educated decision based on how soon you’d want your money and how much trouble you want to go through to get it.
Well, it would cost me around $235 to build and the land is already paid off which has a value of $55k. They lender would use my land as a down payment bringing the cost down to $180 k. The builder says that it would take about a year to build. Right now same houses are selling for $285k.
I know the market is slowing down so I’m projecting an appreciation of 3 to 4 %.
Do you think that would it worth the wait?
Thanks for your response!
Let’s make sure the numbers are correct. The cost to build is $235, but they’re putting a lien on your land that’s worth $55k, so the loan would be $180k?
Worse case scenario, you’d end up selling the home for about $285k? I’d just find out from the CPA how it would affect your taxes, but it seems like a nice profit and worth the wait as long as you factor in all of your costs. You should probably expect the build to take longer and cost more.
With the builder, I’d want to get a final cost where they get paid by the percentage completion. I’d also want to have a penalty once the build takes longer than a certain number of months. Some builders start and never finish, so you need a carrot there to make sure he’s motivated to complete the project.
Make sure you have a good contract with this guy and, if not, work with a real estate attorney. Don’t just use a contract that he provides.
I’ll defiantly talk to a CPA and a real state lawyer. Thank you so much for your advice.
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