A Deal I Lost in Old Fourth Ward

It's come that time when I tell you one of the deals that I lost and it was an interesting story nonetheless. So, story time. We are at 636 East Avenue in Old Fourth Ward. You can see that's Omni right over there, fantastic apartment community. We have a John Waylands 15 townhome community right there. City of Atlanta backdrop. Beautiful, this home that we're on. We're now on the third story and it is a brilliant, brilliant home. Unfortunately we lost this deal. Here's what happened.
We acquired it for $220,000. We had a budget of $250,000 to build a three-floor 2,750 square foot modern home in Old Fourth Ward. Now, there are three things at play. One, the city took a crazy amount of time in getting us permits, which was unfortunately and we just had to roll with that. The city took a crazy amount of time in getting us the permits which was unfortunate Click To Tweet As a result of that, the first position lender, our construction and acquisition lender got a little nervous. I don't blame them, but this was their first construction, new construction deal that they ever funded in Atlanta and they're based out on the East Coast somewhere. Rookie mistake number one. Rookie mistake number two, not taking into account of time it would take a city, the State of Atlanta, to issue permits. Now, to their credit, they have been great recovering from that slow down a little bit, but they still have some of those challenges and we should have accounted for that time frame a little bit more. Thirdly, we had some folks on our team that had expediters at the city and whenever you have people saying that they have people, got to check the people and they people they say they have. It's really important. Overall, we would have made out like a bandit on this one, 220 acquisition, 250 new construction, not including the cost of carry, we could have probably sold it, when we finished, between 675 and $700,000.
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Instead we ended up selling it to a builder because our acquisition and construction lender were not cooperating and they said, "All right, you have 30 days to sell the project." We sold the project. We barely made exactly. We have made like $500 or something, something just completely ridiculous and that's the story of how we lost this deal. Absolutely crazy. I would have loved to have lived here. I mean, now they're probably going to sell this property for $750,000. Just my luck.

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