If I told you the 120K House was available to purchase again and now we have tripled the size of the back yard, would you buy it?
Due to personal issues, the clients that had the 120K under contract are unable to follow through with the purchase at this time. This means it is available again for sale, at least for a short time. Our sales team, Courtney (aka “the money”) has re-listed the property at $275K. She tells us we have one offer coming in today from a previously interested party.
Here is the best part about the re-listing of the 120K. Previously, the back yard was about 22′ feet deep by 20′ wide. We have since decided not to subdivide the lot in two, which means the back yard goes all the way back to the next street for a full street to street lot. This adds another 40′+ of depth to the back yard. The yard would be huge for such a small, Philly rowhome and the owner would have ample space to add off-street parking or even a separate small building as an office/studio/guest shack…
This will go fast, so if you are interested contact Courtney today or have your Realtor contact her. The Postgreen Team has fallen in love with both homes and may even just decide to keep them both for ourselves and setup an office in the back yard. You never know…
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glad you have other buyers lined up, but also sort of sad we won’t see the small house on the back of the lot. I was sort of looking forward to that as a Philadelphia Trinity House reinvented for the 21st century.
Greg,
Are you saying Philadelphia has a tradition of carriage houses?
Carriage houses have been illegal in most “sprawlville” cities since the 50’s and now they are being revived by planning depts. nationwide.
Philadelphia has some carriage houses more in nieghborhoods from the 1800s, and now a days they have often been transformed into dwellings. But that’s not what I’m describing. A “trinity” house is a unique Philadelphia house type that is a 3 story town house with one room on each floor, first appearing in the 1700s. They were often built directly behind larger homes that faced on the street and were reached by a walkway that went along side the house. Once established this way the pattern continued to be used through the 1800s as the scale of Philadelphia’s street grid lent itself to houses this size. There are some micro blocks here lined with nothing but these tiny houses.
Greg,
We are sad to see this opportunity pass us by also. We are still entertaining it slightly with the possibility of us buying both homes, but that is not very likely.
Our basic concept was a very simple, 2-story, 800 sf loft home that would be net zero energy and sell for $200K. It would have been the balls. It will happen later or sooner…
I know – it will happen on another site. The extra space at the back of this lot was a surprise if I remember right. Better to move the house now and save it for a future site where you can incorporate it from the start.
Guys,
Please don’t get me wrong…I’m glad that urban pioneers such as yourselves are venturing north and revitalizing one of the worst neighborhoods not only in the city of Philadelphia but perhaps on the east coast of the United States. But if you tell people they can build the house for $100 sq/ft, and it’s 1200sq ft, and lots around there cost $20k….then how does that equal $275k…?
He’s right. You ought to do all this for free. Now there’s a business model for you.
Did we do the development 101 post yet?
Guys,
No disrepect and I am a huge fan of the type of building you are doing. I am an ex-Philadelphian who just renovated a 100 year old Victorian in Queens, NY and for my next home I want to do a teardown and build a mild green modular. All I am saying is that in a project like this, if people know that $100/sq ft construction costs means that everyone is getting paid, then the developer has to carry the project for the length of construction time. You pay $20k cash for a lot, and finance $120k or so in construction disbursements over a year. To make $100k+ for that seems like a lot.
You are also asking a lot for people to pay this kind of money to live in an area where open air drug sales are still commonplace. Also, Philly’s tax scheme encourages, no BEGS, anyone who makes more than $50k/year to move to a surrounding county.
You are wrong. The pricing is consistent with the neighborhood, and project mark-up is consistent with the indusutry. Hence the houses are selling. Don’t know when you left Phila. but I suspect you are not in tune with the current state of the neighborhoods.
Well, I would bet $1 that the last buyer backed out because of an inability to obtain financing. That suggests to me that the property will not appraise (in an arms length transaction of course). Maybe ASKING prices in the area are (or were about a year and a half ago) in line with this but now I’m not so sure.
Regarding knowing the market, I am in the process of buying 1000 sq/ft rental units a little further up 95 for under $50k
All I am saying is if I wanted that house I could build it for $180k tops….any more and it means I am not being savvy about costs.
I also would be willing tobet that anyone bidding $275k doesn’t really know Philly that well either…or they would realize that that money goes a lot further not much further out.
Easy sports fans. Let me clarify a bit more.
First, this whole blog is meant to be a case study from the builder’s perspective. All of the land costs, soft costs and other development company costs are not the focus of this blog. Without going into details and giving away all our numbers I can assure you we are not making half the profit per home you are projecting.
Secondly, it doesn’t really matter if we’re building for $50, $100 or $200 psf. It also doesn’t matter what we are paying for the land. All that matters is what the home is worth in this neighborhood and in this market. Period. Other homes are selling for similar prices in the hood that are either rehabs or new construction without the green and modern tint.
Richard seems to be coming from a unique position in that he is able to build or rehab his own projects. Absolutely someone like this is going to be able to put together a project for less than someone buying from a developer. He is putting his own expertise, time and effort to get equity in the end. This is in essence what any builder or developer does and how we make our money or investment returns or equity in a long term investment…
The average person buying a home is not Richard or Greg or us. They are homebuyers. Also, very few could build to the same standards of energy efficiency, health and design without a lot of additional research and expense. This is the niche we are trying to create. Sell for the same price as normal homes in the area, but offer more value in terms of design and sustainability. Built in equity if you will.
The original buyers left for personal reasons which it is not appropriate to go into details about on this forum. It had nothing to do with the mortgage. Let’s play a bit nicer here on this subject and focus on the important things that everyone can learn from. If anyone thinks we are making too much profit, feel free to call or visit anytime and we can discuss. Before you call, know that our Postgreen salaries broken down to an hourly rate range between $0 and $7 depending on whether or not we are able to pay ourselves each week.
No hostility intended towards Richard, its just his points are moot. People buying the houses don’t want to live “further out” whether they understand the dollar buys more there or not. The houses are sold, so they no longer are prospective, but rather indicative of the values in the neighborhood. If you don’t see that value, then you are not a prospective buyer – simple as that.
Oh, and the 120K House is under contract again. It took about two days…
Well, I guess I shouldn’t give you guys too hard of a time… for my next place I’m going to buy a $600k teardown (yep, that’s what it’s gotten to up here..not Archie Bunker’s Queens anymore), build about 2500 mild green sq ft at (hopefully) $120 sq ft (tops) but it will compare to $1.5mm pieces….but it will be for my own consumption.
Actually, you guys need to be applauded because I grew up in Philly and always thought that more people should move towards the center. Thanks for taking the efforts to make this happen and I actually do hope you guys continue w/ success.
I think you guys are doing great stuff but establishing your brand as 100k house and then charging rather more does lead to some confusion. It’s not that you shouldn’t make the money, it’s that the conflict between branding and price is confusing.
On another note, should have read all the comments before sending the link to friends who are looking for a house…
Our brand is Postgreen.
Our blog that chronicles a case study about how green building does not need to be more expensive than traditional building is called 100K House.
It is that simple. Period.
Building it next door to Section8House keeps the price down too.
Richard – I’m not aware of any Section 8 on the block. Let’s keep these types of comments factual…
Jeremy – The 120K is still on the market and we are accepting offers from anyone else that is interested. I’m not sure if that’s what you were referring to in the comments. We have a contract on it, but have reserved the right to continue marketing it.
Nice job hanging tough on the moderation… I can see a similar debate heating up with the housing we’re planning for a neigborhood in Boston. We’re looking to build on a known brownfield in a part of town that was a notorious nighttime dumping ground and hotbed of crime, but is now transforming itself into an empowered community with lots of hip green development and activist leaders committed to seeing change come. I think there should be no shame in making a good profit, if the type of developement is good too. I do have to confess the 100k byte threw me at first too. But I actually love the idea of turning the process upside down, starting from a number, and finding a way to stay on budget. Kudos!
I think the whole 100k theme speaks to the transparency of what they are doing. How many developers would even offer a glimpse what their out of pocket is on a project? In that spirit there has been a great trading of information here on the blog, something everybody involved has valued.
In support to Chad, I see no reason that there wouldn’t be an 80k house or a 150k house based on the size/finishes of the house.
In fact, having these options (and potentially more) would provide tons of choice for consumers based on their price point.
Land is such a variable that it’s a good idea to remove it from the equation. If I want THIS house on my lot, it’s going to cost $100K or whatever. Makes it easy for me to determine what I can afford.
Dude, last I checked this was still a capitalist nation. If they can build a modern green house for $100K- $120K and the market bears them selling it for $275K, even with all publicly available info about their wholesale cost structure, then, more power to ‘em. Like larvardera said, this project’s been pretty transparent the whol way through, and someone obviously still cares enough to pay a tidy profit for it.
My question is, how can I sign on as a project manager when you guys expand to Las Vegas? *lol* (j/k)
Uh, hello, guys, the whole reason the economy is in the worst shape in 65 years and our way of life as Americans as we know it is actually in jeopardy is because people have been paying way too much for houses…nobody sees a connection here? I mean, like people with Phds in hard sciences make 100k a year but any illiterate who can convince another illiterate that ‘real estate never goes down’ can make multiples of that? Yeah, free market. Remember, you are free to give your money away.
The economy is in a shambles because this country’s well-being was being managed by an ignorant, dim-witted, self-serving, war-hungry buffoon for eight years.
Yes..exactly…by letting felons run amok in the mortgage business writing $500k loans when they couldn’t even get $9/hr jobs at Wal-Mart with a criminal history. That’s why home prices from the Bush Administration need to be forgotten about for a long time.
Every real estate bubble has it’s gentrification pioneers who push further into exurbs or to inner city slums because they are driven there by rising prices. But when the market starts to fall educated, moderately well paid people are much less tolerant with putting up with ghetto conditions because suddenly they have choices. I’d be willing to bet $1 that if you try real hard you can find a very nice abode central Philadelphia in a much safer area in this price range.
Case in point:
http://realestate.yahoo.com/Pennsylvania/Philadelphia/261-s-24th-st:9bd5fae9491cc185dba44849dc605471;_ylt=ApSxxH_PjIqIDHwxLFWalYpn47Qs
Like the “case in point”, I live in a wonderful neighborhood in downtown Philadelphia but am paying about the same price for a house two thirds of the size as the ones developed by postgreen. (The case above is about half the size of 120k house). Additionally, Philadelphia, like many cities, has neighborhoods which change socio-economic demographics in a matter of blocks. Plus, you have to deal with all the poeple coming into your neighborhood and the center city area who aren’t stakeholders in it’s physical or phsycological comfort.
So, “tolerating ghetto conditions” in a rapidly developing, culturally alive, and innovative area (with more room!!!) is a worthwhile investment that I think many city residents would seriously consider. Especially, the younger, educated, and moderatly well paid ones
The grass isn’t necessarily greener down here on the concrete schoolyard…