I Turned a $275,000 House into a $2,000,000 6-Plex (Infill Development)

How we took a single family house and turned the parcel into a 6-plex, using infill development on an existing lot.

Infill development is building inside an already established neighborhood, where the roads, sewer, and water are already in. This is the full story of the Farragut project in Portland: a run-down 110-year-old house bought for $275,000, torn down, and replaced with a 5,500 sq ft 6-plex worth $1.8 to $1.95 million.

What infill actually is

Look around homes from the 1950s or older in any major city. You are hunting for one of two setups: a house so far gone that a flipper will not touch it, or a house sitting at the edge of its lot with excess land where one or two more units fit. This deal was the first kind.

The infill cost premium

We build for about $150 a square foot; infill runs $165, because you bring in the three utilities. Every lateral costs $3K to $8K, so sewer plus water is $6K to $16K, and power is another $2K to $4K. Price that in before you offer.

The real timeline: 18 months

Every project has two halves: planning and permitting, then vertical and sale. In a big city, plan about 2 months for design and engineering and 6 months for permits, then roughly 8 months to build and 2 to sell. Know the 18 months going in.

Three ways to control the land

A bridge loan runs 25-30% down. Seller finance might be $50K down with the seller carrying the rest at a negotiated rate. The third option, which Arthur has used more than 30 times, is a long-term contract: an 8-month closing with $10K to $30K of released earnest money, protected by a memorandum of contract recorded on title. That option costs $0 in interest.

The land basis: $330K all in

A property like this would sell for $400K; it closed at $275K. Add $5K of closing costs and $50K of demolition. Fifty grand sounds insane, but in Portland any house 100 years or older must be deconstructed by hand, and this one had asbestos to abate. Demo belongs in the land basis, so the land is $330K.

The build and the exit

5,500 sq ft at $165 a foot is about $900K, plus a builder fee locked as a $90K flat fee so the budget cannot inflate, $990K total. Six units averaging $300K to $325K each puts the exit at $1.8M to $1.95M against roughly $1.42M all in with finance fees. After 5% selling costs that is $290K to $420K of profit, a 22-32% margin.

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