Typical foreclosed sites are two- or three-family homes, some of which have been built over the last five years. The expected home price on average will be $465,352 for a two family home.This pricing will allow households earning less than 120% of AMI to purchase the homes, making the homes affordable to a greater number of prospective purchasers. The Neighborhood Stabilization Programs grant is available to households whose income qualifies under program guidelines.
The acquisition cost makes up for an average of 80% of the total project development cost.Each home unit will require $20,000-$25,000 rehab, plus soft cost, marketing cost, carrying cost, and developer’s fee incorporated in the final sales price. A portion of the acquisition financing will be provided in the form of owner equity (10%) as a percentage of cost to purchase the property (initial down payment). The other sources of financing would consist of
a bank loan or private financing source to cover the remaining acquisition and rehabilitation cost (80%), and the developer’s fee that is paid when the home is sold and all loans are paid back, which makes up the remaining portion of the project (10%). The construction timeline is expected to take approximately four months from acquisition to final sales or lease up.
Determining Pricing
The company will analyze data gathered from sources such as the New York City Department of Finance, specifically their recent sales listing, in order to get background on recent sale prices. The company will also use comparable data on the market based on realtors listing in the neighborhoods. This will assist in targeting selling points for the market and determine which areas would be best to focus on. It helps in establishing target areas and prices for resale before and after construction is completed. An appraisal would be provided to determine the final value of the property.