My Flipping Investment
3552 OTTAWA AVE, CLAIREMONT
This beautiful 3500 sq ft, 4 Br, 4 Ba home was built in July 2006. It has all the modern conveniences and entails a luxurious lifestyle.
This home was listed on the market on 9/19/2006 (27 days ago) for $1,150,000. Well you may think it may be a bit overpriced and darn it, you want to know why?
Lets go back to 2005 when this mighty home was a mere shadow of itself at 806 sq ft, 2Br and 1 Ba.
Yes, that's right the investor/flipper purchased the home in June 2005 for $475K and repackaged it into this mini-mansion in a year.
I am not a homebuilder, but many of my friends state that building a home generally costs between $150-$200 sq ft depending on the quality and workmanship. At 3500 sq ft you can assume that he may have spent anywhere from $525-700K to rebuild the home.
A purchase price of $475K plus the bulding costs ($525-700K) puts us at $1,000,000-1,175,000.
It looks as if this investor may have not thought this one through.
Am I off here? Any builders out there?
8 comments:
I believe in a pinch you can build one for under the 100/sqft mark.
Cow_tipping
I've developed several high end condo projects in LA over the past few years. At today's prices, I can build at $140 psf + the cost of subterranean parking (which can add significantly more if it has to be 2 or 3 levels.)
Unless this home is sitting in UTC, it's not going to sell at 1 MIL price tag.
I do mostly commerical construction estimating, but believe that if a builder was the one doing this project as a side job then he prolly brought it in at around the 100$/SF range.... so that puts us at $350K plus the $475K or = $825K. Could be a nice profit if he sells it at anything over $925K...
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I would argue that this is not a flipping but more of a value added development. Meaning you're right the average person couldnt get a have built this place for anything under $175/SF or basically the sale price as of right now, maybe less a little... The developer will make his money on his ability to see the project potential in the small original house and his ability to bring the project in under budget. I think this person is enriching the urban fabric of Diego, (personally i think its a good looking house and most likely livened up the block) ((as for me willing to pay a million dollars for anything that isnt attached to several beautiful acres, we'll thats a different story))
$150 to $200 to hire someone. The GC keeps his labor and profit, cost him more likr $100. psf.
Beautiful house, but one big problem still exists, it is in Clairemont. You saw what it looked like before, I bet the neighbors house still looks like that.
LOL.
Bob, if you live in San Diego, you have to visit Ottawa street. The street consists entirely of little 900 square foot houses, tightly packed, cars parked on the street, with two houses on the west side of the street magically transformed into McMansions.
Words don't do it justice, you really need to see it.
It just goes to show how out-of-whack prices are with respect to cost-to-build values.
A 50% price reduction is required to start bringing prices back to reality..
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