Calculators → Maximum land price
Builders lose money at the closing table on the lot, not on the build. Work backwards instead: start from what the finished house sells for, subtract everything it costs to get there, and see the most the land can be worth to you at the margin you need.
The full Spec Home Evaluator reads a lot listing, builder bid, plan set or appraisal and fills these inputs in for you, then runs the month-by-month cash flow, a margin-of-safety table and sale comps.
Open the full model freeNo credit card. One saved project on the free plan.
A lot has no intrinsic price. It is worth whatever is left after you take the finished house's sale price and subtract every cost of producing it, including your own required profit. That number is the residual land value, and it is the only defensible way to bid on dirt.
The arithmetic runs in this order: sale price, less selling costs and concessions, less hard cost, soft cost, site work, permits, plans, utilities and contingency, less carrying costs and loan interest over the whole schedule, less your target margin. What remains is the most the land can be worth to you.
Twenty percent of revenue is the usual benchmark for a spec house carrying real risk, and it is what this starts at — but it is a convention, not a rule, so change it to whatever you actually underwrite to. A quick infill build in a hot submarket might pencil at 15%; a long project on an unproven street should want more than 20%.
Be aware how sharply the land number moves. Dropping the target from 20% to 15% can lift what the lot is worth to you by tens of thousands — which is exactly how builders talk themselves into overpaying. The margin is your compensation for carrying the risk of a house nobody has agreed to buy yet. Lower it deliberately, not because the number you wanted did not appear.
This is a calculation tool, not advice. Every result depends entirely on the assumptions you enter — verify them before acting on a deal.