Thin margins for new construction in Idaho? - Posted by John B. Corey Jr.
Posted by John B. Corey Jr. on August 17, 2005 at 13:29:11:
Your margins seem pretty thin. I would have expected closer to 20% on average.
With only $10K to $15K a minor project delay or problem with some materials could eat up all the profits. If a home sits on the market for a few months after it is finished that could wipe out your entire margin.
Is there a specific problem that makes the deals so thin? What can you do to improve things?
BTW - Getting financing is a function of the risk vs. the equity you can offer. If you are only making a thin margin then the lender is pretty much making a loan for the full retail price. Most lenders will have a problem with that. Are you putting in cash so the LTV is lower?
Chelsea Private Equity LLC