Quote Originally Posted by Tybee Island View Post
The deal doesn't work. He is selling homes at a 33% discount to their 2006 value as you state here.

Based on the 2006 value, the homes can't be any larger than 1500-1750 SF.

2006 vintage and newer Foreclosed Homes in Atlanta today, completely finished, are available at far deeper discounts than his current asking price.

Nothing is said about his completion time after purchase, his selling time after completion, and financing solutions for his buyers. A buyer interested in this caliber home is a first time or move-up buyer who can't layout $200K in cash on a purchase.

Moreover, with each sale in a declining market he will be eroding the equity of his earlier buyers as he drops his prices.

I suspect he is juicing the FHA program which is already being changed given the high level of abuse by small homebuilders over the course of the last 12 months.

Lastly, the unimproved lots are a pipe dream and will not have value in his lifetime.

I have banks offering them to me today for .05 on the dollar. The upkeep and association fees in any platted subdivision will be a huge drain over time. I have suggested to banks that they return them to the homeowners with a deed restriction that they be turned into victory gardens so that homeowners can grow their own food....they are going to need to.

Signed,
Successful developer 6 hours to the East of Atlanta
Thanks for your input. I won't quibble with you over the details, but the bottom line is that this man buys homes in a halted state of construction, completes them and sells for a profit. Are you saying that is impossible? Home prices in Alpharetta, Roswell and North Fulton are down ~20% vs 2006. The "far deeper discounts" you refer to are either in less desirable areas or are not in move-in condition.

Glad you consider yourself successful. Keep up the good work!

-Jimmy