Same builder, same plan, and the third house costs 191 a foot against 162

20k on nine months with 90k of your own money in it is roughly a 30 percent annualized return on that equity if nothing goes wrong, and on a ground-up build something goes wrong. One change order, one weather month, one appraisal that comes in at 478 instead of 488, and you're working for free. I've had all three of those happen on renovations, which are shorter and simpler.

The thing I'd interrogate is the 191 itself. You said nothing is individually crazy, but you also said you don't think he's padding, which are different claims. Get the framer's number directly. If his framing crew is 22 percent up and that flows straight to you with the builder's fee on top, you're paying a margin on someone else's labor shortage. Worth asking whether you can contract framing separately.

On attached product, learning it on your own money in a nine month window is expensive tuition. Party wall detailing, fire separation, and the shared foundation are all places where a builder who hasn't done it before makes mistakes that show up at inspection.

I'd frame it against what else the 90k can do. If you have other uses at similar risk, 20k over nine months is a comparison you can actually run. If the 90k is otherwise sitting, the calculation changes.

But the number I'd want is your downside, not your base case. What's the loss if you finish at 191 and the market gives you 470 instead of 488? That's a negative outcome, not a smaller positive one, and that asymmetry is the real information. Two houses of experience is not enough of a sample to tell you whether 488 is a floor.

Sitting on the lot has a cost too. Property tax, insurance, and the opportunity cost of the 71k, and no reason to think costs come down. Material prices have been running above 3 percent a year and the labor shortage isn't cyclical. Waiting for a better cost environment is a bet on something nobody is forecasting.

Your cost curve and your price curve are diverging, and that's the general condition rather than something specific to your builder. Residential material prices have been growing above 3 percent annually and contractors report widespread difficulty filling positions, so the framing labor jump you saw has a structural cause. Mortgage rates a bit above 6 percent are limiting what your buyer can pay, which caps the resale side. Both of those are projected to persist rather than resolve, with meaningful rate relief generally not expected until 2027.

So what you're really asking is whether you want to operate at compressed margin through a period where the compression is expected to continue. That depends on one assumption you have not stated: whether you are building a business that needs volume to keep a builder relationship and a crew, or deploying capital deal by deal. If it's the first, a 20k house that keeps your builder engaged and your pipeline warm has value beyond its own P&L. If it's the second, 20k of gross margin against a nine month exposure on 90k is a thin risk-adjusted number and the lot is an asset you can sell.

On attached product, townhouse share has reached a multidecade high above 18 percent because builders are chasing an affordable price point, and that logic works. Doing it with a builder who has never detailed a party wall is a different risk than the market opportunity. If you pursue it, the sensible version is hiring someone who has built attached before, not converting your existing relationship into a learning exercise.

Run the loss case at 470 before you run anything else.