Email 3/15/21 Property cost calculations

Hi community,
Thus far, I have 7 people who have said they want to go to the meet and greet at St Mark’s Marthoma Church on Sunday at 12:30: Tom, Marla, Roger, Candy, Russ, Jerry, & Ruth.  If you can make it at the last minute, join us.  We will meet at our church at 12:15 to discuss our strategy and walk to the other church by 12:30. 

I ran some numbers (4 options below) to see what it would mean if we build what we have, sell Charlie’s house to St. Mark’s Church and/or we acquired Carmen’s parcel.  The full calculations are available on the website link to the Google Doc Development Costs (also linked from the 3/15/21 Zoom minutes).  

The three numbers I look at most closely are the total number of units we build (Actually the total number of units we need to sell to make the deal work), the number of common houses we will have and our unit purchase costs.  From my reading, the optimum size for a community is around 15-18 units with 1 common house.  If we have more common houses and more units, I think we’ll have to work harder to not be a divided neighborhood and lose the closeness we are looking for.  And, putting the parking on Charlie’s lot means some of the houses will be a long way from the parking area.  

To keep it affordable, we want to reduce the unit cost because there are many many other expenses to add to each house… +water, sewer, driveway, & parking development, +architect fees, +rezoning fees + impact fees, +hook up fees +???, … and then we add the construction costs of building our housing units.  

So, to summarize the 4 options we might have to consider: (The Red text is building at 4 units per acre.  The Blue text is building at 6 units per acre.)

Option 1. We build on our 3 current parcels = 4.25 acres. 

 If we build 4 units/acre, (build 16 units with 2 common houses) our unit purchase costs are  $37,500.

If we build 6 units/acre, (build 23 units with 2 common houses) our unit purchase costs are  $26,100.
This is our starting point for analysis.

Option 2. If we sell them Charlie’s house we lose 1.25 acres and 1 common house.  We gain $280,000

If we build 4 units/acre, (build 11 units with 1 common house) our unit purchase costs are  $30,000.

If we build 6 units/acre, (build 17 units with 1 common house) our unit purchase costs are  $19,400.
This a smaller, compact neighborhood with housing unit costs less than $20,000.

St. Mark’s has offered Carmen $150,000 for her land.  Carmen hasn’t made a decision.  I have called her several times and she isn’t answering my calls. We may have more information before Sunday.

Option 3. If we buy Carmen’s land (1.5 acres) for $155,000? and add it to our land we would have 6 acres.

If we build 4 units/acre, (build 22 units with 2 common houses) our unit purchase costs are  $34,300.

If we build 6 units/acre, (build 32 units with 2 common houses) our unit purchase costs are  $23,600.

At 6 units/acre, we’re really building 2 neighborhoods.  Or the 4/acre is a nice neighborhood 

Option 4. If St Mark’s buys Carmen’s land (1.5 acres) for $150,000 and then we “swap” the land… we purchase Carmen’s and from St Marks and we sell them Charlie’s land, we would lose 1.25 acres on the road frontage, with a common house and barn, and gain 1.5 acres of empty land away from the road. We would then have 4.5 acres. (or we buy Carmen’s and sell Charlie’s parcel)

If we build 4 units/acre, (build 18 units with 1 common house) our unit purchase costs are  $26,700.

If we build 6 units/acre, (build 26 units with 1 common house) our unit purchase costs are  $18,500.
This option has the lowest costs per unit. 

So read through this a few times. Call me if you want to discuss it.  Right now, we don’t know which of these options/ paths we will follow, but at least we’ll have the basic ideas to start discussions.  

See some of ya’ll Sunday, and everyone else on Monday Zoom at 12.

As usual, I will post this on the website blog column labeled email, today’s date.

All the best,

Marla