The $9K to $150K Blueprint: How One Construction Option Deal Changed Everything
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Discover how to leverage the current housing shortage crisis to turn a small investment into massive profits using construction options - even if you're not a builder or contractor.
Key Topics Covered
- The Housing Crisis Opportunity
- Current market shortage of 4-5 million homes creates unprecedented opportunity
- Buyers are lined up with cash offers and over-bidding on properties
- Structural market imbalance won't resolve for 4-5 years
- Who Can Use This Strategy
- Local builders and contractors (not major corporations like Pulte or Lennar)
- General contractors with construction connections
- Business owners and investors who know people in the building industry
- Anyone with project management skills
- The Vacant Lot Advantage
- Empty lots are less liquid than finished homes, creating pricing opportunities
- Raw land sells at significant discounts due to limited buyer pool
- No bidding wars on vacant lots like there are on finished homes
- Example: Lots selling for $10-13K far below market value
- The Option Strategy Breakdown
- Instead of buying, negotiate a purchase option on the lot
- Pay $5K non-refundable for 24-month option on $100K lot
- Gives authority to get permits, design, and improve property
- If deal falls through, only lose the option payment
- Building the Construction Package
- Get blueprints ($2K) and permits approved
- Obtain septic, utility hookups, and impact fee approvals ($2-3K)
- Create turnkey construction package with cost estimates
- Example: $180/sq ft × 2,000 sq ft = $360K + $100K lot = $460K total cost
- Financing the Project
- Construction loans available at 90-95% loan-to-value
- On $460K project, only need $20-30K out of pocket
- Bank provides draw payments as work progresses (not lump sum)
- Require surety bonds from contractors for protection
- Profit Potential Examples
- 2,000 sq ft house: $460K cost, $650K market value = $190K profit
- 1,500 sq ft house: $320K cost, $450K market value = $130K profit
- 10x to 20x return on initial $10K investment possible
- Risk Management
- Very low downside - maximum loss is option payment
- Market shortage means demand is guaranteed
- 5 million home deficit won't disappear anytime soon
- Construction loans protect against contractor issues
- Advanced Structuring
- Property owner can put deed in escrow
- Negotiate option extensions as improvements add value
- Share profits with key stakeholders (builder bonuses, sales commissions)
- Keep cash outlay under $10K while targeting $100K+ upside
- Why This Works Now
- Finished homes are "like gold" - can't build them fast enough
- 12-14 month project timeline with finite end date
- Contributing to housing shortage solution while profiting
- Market demand cycle much longer than typical business cycles
- Implementation Tips
- Do thorough due diligence on all costs and market pricing
- Background check all builders and contractors
- Focus on project management rather than hands-on construction
- Target properties that were previously listed but taken off market
Bottom Line
This strategy allows you to turn $9K-$10K into $100K-$200K in 12-14 months by leveraging the housing shortage, using options instead of purchases, and focusing on project management rather than construction skills.
This strategy allows you to turn $9K-$10K into $100K-$200K in 12-14 months by leveraging the housing shortage, using options instead of purchases, and focusing on project management rather than construction skills.
