The amount that you want to make as a profit is definitely a factor in answering that question. A goal that I've heard is to triple the purchase price. In this case that would mean you'd want to build a home that could be sold in the mid $500's.
I'd be glad to provide you details on homes selling in that area so you can understand the market better. I've been working in Elmhurst for several years and are quite familar with the nuaces of the market there.
$500,000 is on the low end of the value if you wanted to tear down a home or build on land in Elmhurst.
For example, if you found a plot of land or a "tear down" for $150,000 & it cost you $200,000 to $250,000 for demo & construction, you may already have $400,000+ into the property.
If you are looking to re-sell the property, you have to factor in real estate commissions & holding costs before realizing any profit.
As you see, $500,000 would probably be close to a break-even point before realizing any profit.
I know you asked this question back in February, so I hope you are well on your way with your plans.
Real Estate Agent
Exit Realty Redefined
I work full time in the Elmhurst area and I can tell you in order to build a home here your going to pay at least $200,000 for non prime location on up to 500,000-900,000 for prime depending mostly on width right now. Here it is hard to build a quality home with at least 3200 sq ft for $500,000. But the good news is that lots are moving fast sometimes mutliple offers and builders are building again and selling before it is finished. There is not a lot of quality work being done so the stuff that is sitting currently is being passed over by buyers right now. let me know if I can help. We have 49.0% of the Elmhurst market in our office and things come on and sell before they hit the MLS here.