A short interview-style video (Catherine Bell and partner Adam of Titan Impact Group) describing their small development in Snowflake/Taylor, Arizona. They recap building and selling three homes across 2019–2020, report sold prices of $145/ft², $164/ft² and $154/ft², note construction currently takes ~6–7 months (target ~4 months), mention buyer interest rates around 2.71%, and report an 18.41% annualized return to investors for 2020. They also discuss managing contractors, sequencing builds to avoid holding inventory, and using one partner to set higher comps on difficult lots.
Questions this video answers
Three homes
$145/ft², $164/ft², and $154/ft²
Approximately 2.71%
18.41% annualized
Currently ~6–7 months; target ~4 months
Chapters
Hey, everyone, it's Katherine with Titan Impact Group, and I have one of my business partners here. This is Adam. And what we're talking about today is a project that we've been working on.
For over two years now.
Two years. So what it is, is we decided to. Adam and I have done a bunch of projects together, mostly fixing and flipping, and we decided to put up a development up here in Snowflake, Arizona. Actually, Taylor, but Taylor, same difference. Snowflake's more fun.
Yeah, there you go. You're gonna start a.
And so we wanted to talk a little bit about the numbers because one of the things I love to teach is how to do the numbers. The numbers tell you what to do. And so that's what we're going to talk a little bit about today and our experience with contractors and stuff, because it's fascinating. So, Adam, you want to tell us about the numbers on these?
Yeah. So I'll do a recap of the year 2020. So this year, we built and sold three homes. The first home we built, I don't know if you want to pan and show them, but the first one we built right there was a three bedroom home. We sold that one for $145 a foot. Then the next one that we built and sold was this one here, which is a four bedroom home, which we sold for $164 a foot. And then the last one that actually closed yesterday is the one all the way down at the end of the street where you can see they're still waiting to get the garage door on. But we sold that one for $154 a foot.
And those people that closed on it tell them what the interest rate is.
That's crazy. Yeah. So they wanted to close this year because their interest rate was like 2.71%. And so it was phenome. And it made it to where even though the home wasn't 100% done, we still need to get the garage door on. They wanted to go ahead and close on it.
That's pretty awesome.
So, like Kathryn said, it's been fascinating. It's been an interesting year. We've had a significant jump in materials pricing, but luckily we've been able to follow the market. And even though our costs have gone up, we've also been able to sell the homes at a higher price as well to allow us to continue to be profitable. And we're taking our time building them slower maybe than what we absolutely could. But we're not outpacing the market either.
So what we got when we started this whole development is we were really clear that we weren't going to develop the whole thing from the very beginning and be left, you know, holding the, holding the bag with all these homes. So we systematically built one home at a time, sold it, and then overlapped building the home so that they're being sold as new ones are being started to build, which is about these. So let's talk about the challenges with contractors.
So like anything else, contractors are always fun, right? Trying to manage them. And in a perfect world, we'd be able to build homes in about four months. It's still taking us about six to seven months right now. And I just had a meeting with my contractor to see if we could tighten up that time frame. But really the goal is to be able to build and sell about three to five homes a year. And if we can do that, we can generate great returns and we can build homes that we're proud of that don't overprice the community and are a great fit for the market here.
So overall we built. So you want to talk about these ones that have been.
Yeah, so some of these were for later or earlier. So that was our first home that we built and sold. The other one over there was another home we built and sold in 2019. That far one over there. And then these homes here, these were some of the most challenging lots to build on. We have a phenomenal partner who owns the land here. And so he said, I'll take those most challenging lots. And he actually over built them knowing he was going to be taking a loss on them. But he wanted to try to push the price per square foot and set the comps up a little bit higher to help with some of our material cost increase. So he's been successful in doing that. And even though he took a little bit of a loss on those homes, we've kind of reset the comp which is going to allow us to continue to be more profitable on all the remaining lots.
So as a result, what's really great is the investors that are all involved in this project with us, passive investors. So I like to talk about, as investors, our job is to make sure our money goes out there and brings back lots of friends.
There you go.
And so that's what it's done for our investors. So overall, an annualized return on this project has been.
So for 2020, it's 18.41% for our investors.
So for 2020 being what 2020 was, that's still pretty incredible.
And that's with only doing three homes, building and selling three homes.
So for more information on who we are and what we do, go ahead and click on the links below. We've got a newsletter, a book about using Invest in Real Estate and if you're interested in becoming one of our lending partners, then absolutely let us know. It's all there. So make sure you like share and comment how this video hopefully inspired you, encouraged you to take some action in 2021 and make your real estate investment portfolio. Make sure it goes out and brings back lots of friends.
There you go.
So with that, as always, this is Catherine with Titan Impact Group. This is Adam and you never awake from the American dream.
