Day in the Life · Arthur the Developer · 34K views

Day In The Life Of A Real Estate Developer | How I Make 6 Figures+ Per Deal

A day on Arthur's active projects and the mechanics behind six-figure margins per deal.

Six figures per deal is not luck, it’s arithmetic done before the land is bought. This video shows the day-to-day; here is the math underneath it.

The developer’s math

Take a $750,000 target sale price. Cap the land at 25%: $187,500. Construction plus the builder’s fee around $378,000. After agent and title fees, that deal clears roughly $147,000 in profit, about 25% ROI. That’s a 2,250 sqft, 4-bed 2.5-bath home with a 2-car garage. Nothing exotic.

Run your own numbers

The developer’s formula: sale price minus land, construction, and ~3% selling costs. Investment build assumes ~10% down + closing.

Target sale priceLand costConstruction + builder fee

$162,000

Est. profit

29%

ROI on cost

25%

Land % of sale

212%

Cash-on-cash

Rules of thumb from the BuildUp playbook: land at 20-25% of sale price or less, and a minimum 20% ROI (target 25%) before breaking ground. Red numbers mean the deal doesn’t pencil yet. Estimates only, not financial advice.

Fall in love with the numbers, not the real estate. A strict minimum of 20% ROI, and a target of 25%, on every single project before breaking ground.

Why cash-on-cash is the real story

With a lender covering ~90% of the project, your capital in that deal is about $76,000 (10% down plus closing). $147,000 of profit on $76,000 deployed is a 193% cash-on-cash return. Compare that to the S&P’s ~10% or a rental’s 8-15% and you see why we build.

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Common questions

Why build a project in phases instead of all at once?

Absorption. Fircrest is 27 townhomes, but phase one is only eight, because that market moves a few units a month. Carrying a loan on all 27 while selling three to five a month would mean nearly a year of interest on unsold units. Build eight, sell them, then start the next group.

How do you choose between apartments and townhomes on the same site?

Run both. This site could have been 33 apartments or 27 townhomes. The townhomes returned about 27% instead of 23%, on 20% fewer units. They also give multiple exits: sell each unit individually to an owner, or rent them. Apartments have to be sold to a single investor, and that market was overbuilt locally.

What return should I target and why does it matter?

20% to 25% on the total project cost. On a $600,000 project that is at least $120,000. It is not just about the money: at a 5% to 10% margin, a market that cools 5% wipes you out. At 20%, a small cooling still leaves margin, and a serious drop means you rent it and wait instead of losing it.

How much do I put down and what should it return?

Roughly 20% of project cost, with the bank funding the other 80%. On a $600,000 project that is about $120,000 down, and the working rule of thumb is to roughly double that down payment on the deal. It does not always land there, and a 50% return on the cash in is a normal part of the game.

What is the hardest part of getting started?

Not the deal, the first pile of capital. Arthur's first build was $50,000 in and about $50,000 out, and it took him four years to save that first $50,000 at around $1,500 a month. Putting $50,000 to work to make $50,000 is the easy half. Getting the first $50,000 is the part that takes grind.

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