A vacant luxury flip carrying since March is a case worth walking through

How many months of carry did he have in the original numbers? That's the whole thing, right. If he penciled four and he's at eight, the veining doesn't matter.

The weekly landscaping crew is the one invoice nobody argues about on a luxury vacant. Owners argue about everything else and pay the mow bill same day, because they know one bad photo of the lawn and the showing is dead.

@marcus_hale41 four is the number that should stop you cold, not reassure you. Said like a wide margin, it is the kind of line that makes people stop asking questions. Everything else in a sponsor's sheet can be defensible, the reno scope real, the exit comp a real closed sale and not a wish, and the carry line still ends up the one number treated as an afterthought, and the biggest line in the deal by month nine.

Dumb question, if it goes eighteen months who is actually holding that loan at that point? Does the original lender just keep extending or does somebody sell the paper along the way? Trying to picture how that part of a note actually works.

@raj_mehta14 depends entirely on who wrote it. I've watched a capital call go out on a luxury flip that ran long and half the small investors had no idea that was even possible when they signed. That conversation is not fun.

The vacant property insurance line is the one that surprises people. A house nobody lives in costs more to insure than one somebody does, and on a house that expensive it can be a real number worth underwriting up front.

Ravine lot at the top of the market is the entire asset. You could argue the house is a liability strapped to good dirt. Nobody flies a stone guy in for the dirt though.

Ask him what the extension looks like. On short paper the extension is usually a fee plus a rate bump, and it gets negotiated when leverage is at its lowest point in the entire deal, which is the month it is needed. Terms vary by lender and it needs to be in writing before anyone counts on it.

Three ovens.

Worth knowing whether there was an HOA or architectural review sitting over that lot and whether the exterior changes went through it. Nobody reads that document until a neighbor complains, and then it is the only document that matters. Varies wildly by community.

The staging contract expiring is the detail I'd frame and hang up. Those are usually a term with a monthly after, and the day someone lets it lapse on a house like that, they've stopped believing in their own timeline.

I hold things for a long time on purpose. Waiting with a thirty-one thousand dollar monthly bill is a different activity than waiting with a paid-off lot. People use the same word for both and they shouldn't.

@dmitri_248 that kind of lapse is also how a stager finds out a deal went bad. The call just does not come.

Whole houses in whole towns trade for less than what that stone probably cost. Not a point against the deal, just a reminder of how wide the range in this market really is.

A small, boring portfolio and an eight thousand square foot flip look nothing alike on paper, but the thing that breaks at scale is the same in both cases: turnover timing. Same disease, different number of zeroes.

What I want to know is how a lender underwrites an exit in a submarket that trades five houses a year. What's the comp set even made of? Five sales isn't a market, it's anecdotes.

Flying a fabricator in because the locals kept missing the veining is either the most professional thing in this story or the reason he's at eight months. Both, probably.

This is oddly calming context for anyone weighing a first purchase. A bad month for most owners is a water heater, not a structural surprise at this scale.

I've been trying to work out where I fit and I keep coming back to the pool guy in this story. He got paid every month for eight months and never once cared whether it sold.

Every unit an owner holds teaches something, and few of them teach what a thirty-one thousand dollar carry actually costs. A typical small building's operating budget doesn't reach that in a quarter.

@dpatel_re worth asking whether the lender had already extended once by the time the property was walked. The tell is usually that they stop volunteering the maturity date.

The number that stuck with me wasn't the thirty-one thousand. It was four. He planned for four months in a place that sells five houses a year.

Can someone spell out carrying cost for me? I think it means everything you pay just to own the thing while it's empty, so interest and insurance and utilities and the lawn. Is taxes in there too or is that separate?

@kevin_lombard taxes are in there, and on a house at that price they are not small. From the build side, the other thing worth checking is the finish schedule. Luxury scope creep isn't a bigger version of normal scope creep, it's a slab that arrives with the wrong veining and now there are eleven weeks lost to a re-order.

I've been in this a month and I did not know houses could just sit like that.

Thirty-one a month across eleven months works out to around three hundred forty thousand of pure carry, before a single price cut. Two agents and no staging by spring means the cuts came too. A reasonable read is that the renovation itself was profitable and the calendar ate all of it.

I do fast cheap deals and I'd have lost my mind by month two. He was calm at eight. Genuinely don't know if that's discipline or denial.