It Was Just Mostly Dead | 2037 Mapleton Ave

--- by Osman Parvez

I was driving past 2037 Mapleton Ave the other day when I noticed a construction fence. I pulled over and took a look. 

If you recall, I visited this property about a year ago. At the asking price of $900K, this three bedroom, 1 bath, ~1300 SQFT historic home looked like a bargain. When I stepped onto the lot, it was clear the house was in trouble.  

2037 Mapleton was one of the scariest homes I have ever visited. Foundation problems and decades of neglect had taken their toll. Check out the video below

After I viewed the home, I concluded it was toast. There were so many clear signs of pending structural failure that I assumed it would have to be demo'd. 

I was wrong. 

It wasn't quite dead. It was just mostly dead. And mostly dead, as everyone knows, also means slightly alive. 

Luckily, there was a noble cause. 

2037 Mapleton was acquired by a builder last December and they've been hard at work ever since. 

Demo permits were issued in August. Instead of scraping it entirely, they kept the front and portions of the sides (a likely requirement from the building department for this pre-war home). The interior has now been completely gutted and a new foundation poured. The garage has also scraped. 

Here's some basic math on the project. 

Purchase price
$860K.  The MLS says it closed on 12/21.

Permits fees:  

About $33K to $35K (including sales and use tax)

Permit application values

$749K for the main building
$30K for an accessory building

Demo cost
~$15K to $20K (WAG). 

By the way, in Boulder, we don't actually scrape homes any longer. By law, they must be deconstructed and reusable materials recycled. 

Judging by the size of the excavation, the developer is planning for a sizable addition. According to the city, permits are still in process. 

Typically, permit fees are underestimated. At the end of the day, the developer will probably be into this project for $1.7MM to $1.9MM. That excludes carrying costs for the acquisition and construction loans, plus a whole bunch of other things.  

The location is a little on the busy side, but it's still a solid choice for this sort of project. It carries the Mapleton nameplate, after all. Assuming they end up with a 4+ bedroom, 3+ bath house with ~+3,000 and a two car garage - the final project will likely sell for $2.5MM to $3.0MM 

If they're smart, they'll keep it around that point. There are far fewer buyers above $3MM and competition becomes more fierce. 

Since closing, the developer has been working on it for 356 days. Believe it or not, some buyers believe this sort of project only takes a couple of weeks.  

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 


Please Note

This document contains forward-looking statements. You are strongly cautioned that investment results are subject to business, economic and other uncertainties. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time. Always consult your financial advisor before making an investment decision.