The lot

Land price

The house

Heated square feet

Expected sale price

Selling costs % Commission and closing

Buyer concessions %

Build cost

Site work sits apart from hard cost on purpose — it is lot-specific, and lumping it into a per-foot number is how lots get mispriced.

Hard cost per sq ft

Soft cost % of hard

Site work Clearing, fill, septic, drive

Permits and fees

Plans and engineering

Utility hook-ups

Contingency %

Land closing costs %

Schedule, carry and debt

Months held before start

Build months

Months to sell

Taxes / month

Insurance / month

Utilities / month

Loan to cost %

Interest rate %

Origination %

Profit on the build

—

After every cost, including carry, loan interest and selling costs.

The numbers that matter

Margin on revenue—

Return on cost—

Annualised IRR—

Cash-on-cash—

Peak equity needed—

Total cost—

Cost per sq ft—

Project length—

Margin of safety

How much can go wrong before this build breaks even.

Break-even sale price—

Price can fall by—

Loan interest over the job—

One house, or twenty?

The full Spec Home Evaluator staggers multiple homes, grows prices across the run, splits profit with an investor through a pref, draws sale comps from live listings, and reads your builder bid to fill all of this in.

Open the full model free

No credit card. One saved project on the free plan.

Margin, return on cost and IRR are three different questions

Margin on revenue is profit divided by the sale price. It is the number builders quote each other and the one lenders ask for. Around 20% is the usual benchmark for a spec house.

Return on cost is profit divided by what you spent. It is always the larger number, and it is the better measure of how hard your money worked — but it says nothing about how long it was tied up.

IRR fixes that. A 14% margin earned in ten months beats an 18% margin that takes twenty-two, and only an annualised return shows it. If you build one house at a time, IRR is the number to optimise, because your constraint is time, not capital.

Cost per square foot is a check, not an input

Here it is an output: total cost including land, carry and interest, divided by heated square feet. Compare it with the hard-cost-per-foot you entered and the gap is everything that is not framing and finish. That gap is usually larger than builders expect, and it is where spec projects quietly lose their margin.

Why carry deserves its own line

Taxes, insurance, utilities and loan interest run from the day you close on the lot to the day the house sells — not just during construction. The months before you break ground and the months a finished house sits unsold are pure cost with no progress against them. Lengthen the sale period here by three months and watch what it does to the IRR.

What this does not include

Company overhead and general conditions, unless loaded into soft cost.
Income taxes on the profit.
Any check on whether your sale price is achievable. That is a comps question.

This is a calculation tool, not advice. Every result depends entirely on the assumptions you enter — verify them before acting on a deal.

Spec home profit calculator