You are contemplating development of single-family houses on an acre of land you already own.  
The land can be subdivided into 1, ½, or ¼ acre lots. 1-acre lot houses are typically 4,000 SF and
cost $350,000 to construct.
Houses on ½ acre lots are 3,000 SF and cost $ 225,000 to build and ¼ acre houses are 2,000 SF
and cost $175,000.  
Subdivision costs (legal, infrastructure etc.) are $40,000 per lot.
A 4,000 SF house will sell for $500,000, a 3,000 SF house will sell for $350,000 and a 2,000 SF
house will sell for $250,000.
What should you do?

 

Answer rating: 100% (QA)

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