903 Loyola Los Altos

I signed up for the Aron Developers’ newsletter, and today I got an email from them saying they just sold this Los Altos house:

https://www.redfin.com/CA/Los-Altos/903-Loyola-Dr-94024/home/108432207

However they made a loss on the sale. Here’s what Navneet said:

This project was extremely challenging because the narrow lot widths and two big basements presented unique challenges throughout the entire construction period. Hence the project took 6 months longer to complete and we also incurred significantly higher construction cost.

At the same time, sales price was towards the bottom of the range of our projections. The sales price was towards the lower end of our projections because we under-estimated the desirability of the homes with detached garages, narrow lots, small backyards and smaller master suites.

So you can lose money in Bay Area real estate, even if you were a pro with deep pockets.

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So they must have spent more than $1M on the construction in order to lose money based on that listing price.

@wuqijun, when are you going to invite us to this new house that you got a deal on?

Which one?

903 Loyola of course :slight_smile: I’ll bring a housewarming gift :slight_smile:

Hehehe… of course :slight_smile:

Teardown and rebuilt is risky.

18641 Cynthia Ave Cupertino listed on Jul 19 is still on the market even after dropping $300k. May be because of small lot size of 6840 and narrow frontage.

Developer is a high risk job. Better keep it simple and avoid risky project

Wrong side of Cupertino and asking too much for that neighborhood.

2.5M for both projects.
Under 2 years to completion.
7.5M resale value. 3.9M+3.7M?

All-in costs are in the neighborhood of 5M.

Where are those people who think they can complete a build for 50 cents on the dollar?

??? So the same developer built both homes?

Yes. They move up the trust level notch for having lost money once.

Yea, that lot was a bit tricky for them coz you need to dig into the ground to get more sqft and adding all those supporting wall. Simple is good.

Building basements is also popular in PA. Is it easier to sell at premium price in PA than LA?

903 Loyola Owner => ADL 2 LLC
18641 Cynthia Ave Owner => Lu, Sha

I doubt that these are the same people…

I meant 901/903 Loyola. It was a double lot. The exit
value was 7.46M. Costs had to be ~5M. Roughly 9k finished sqft. That’s right in range of 500/sqft.

PA vs LA, PA is more expensive. You get less for your money. LA doesn’t lead the market. To get a nice and wide 10k sqft lot in PA is much more than the ~3M it costs in LA. You can get a narrow one for 3.9 (555 Chaucer) or this one for 3.4 (must have a shared easement) https://www.redfin.com/CA/Palo-Alto/1052-Fife-Ave-94301/home/1290192.

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