Why not build your own house ?

[Doofrat]

My father built two of our houses while we were growing up. I also know a young couple who built their own house and another couple who handled the contracting out of the construction.

My father only did it twice and the two couples only did it once. My father loves woodworking, but I think the hassles of building a house were too much.

I think a good comparison would be knowing nothing about computers, and deciding to just go out and buy the parts and put it together and install the operating system yourself. Sure, it’s possible, but because you’ve never done it, you don’t know all of the pitfalls ahead of time. Also, you’re probably not going to put out a prime piece of work. Of course, computers don’t require permits, inspections, flaky contractors, or the dreaded drywall guys.

You don’t say what your background is, but if you have a good construction background or woodworking background, you should have the skills to put out a good piece of work, but you also have to have the skills to negotiate with contractors (who will do the plumbing, electrical, cement, and possibly other parts) and the skills to deal with the city or county paperwork and inspectors. I don’t know the specifics, but there are also restrictions on purchasing land for construction and time limits for completing construction.

Hope this helps.

[gdcox]

Remember to do the proper land calculation..
Estimate your minimum acceptable profit, estimate the value of the house at the time of completion (factoring in estimate of market chnage between now and then) and estimate cost of build, including interest on borrowings or interest foregone on own money used for buying land and funding build.

Future value less min profit and less cost of build =
maximum you should pay for the land.
———————————————————-
PS comparing new build to older houses to older houses, Mello Roos etc can be put in a comparison by dividing MR pa by mortgage rate divided by 100 ( eg 0.055)

[gdcox]

Remember to do the proper land calculation..
Estimate your minimum acceptable profit, estimate the value of the house at the time of completion (factoring in estimate of market chnage between now and then) and estimate cost of build, including interest on borrowings or interest foregone on own money used for buying land and funding build.

Future value less min profit and less cost of build =
maximum you should pay for the land.
———————————————————-
PS comparing new build to older houses to older houses, Mello Roos etc can be put in a comparison by dividing MR pa by mortgage rate divided by 100 ( eg 0.055)

[gdcox]

Remember to do the proper land calculation..
Estimate your minimum acceptable profit, estimate the value of the house at the time of completion (factoring in estimate of market chnage between now and then) and estimate cost of build, including interest on borrowings or interest foregone on own money used for buying land and funding build.

Future value less min profit and less cost of build =
maximum you should pay for the land.
———————————————————-
PS comparing new build to older houses to older houses, Mello Roos etc can be put in a comparison by dividing MR pa by mortgage rate divided by 100 ( eg 0.055)

[gdcox]

Remember to do the proper land calculation..
Estimate your minimum acceptable profit, estimate the value of the house at the time of completion (factoring in estimate of market chnage between now and then) and estimate cost of build, including interest on borrowings or interest foregone on own money used for buying land and funding build.

Future value less min profit and less cost of build =
maximum you should pay for the land.
———————————————————-
PS comparing new build to older houses to older houses, Mello Roos etc can be put in a comparison by dividing MR pa by mortgage rate divided by 100 ( eg 0.055)

[gdcox]

Remember to do the proper land calculation..
Estimate your minimum acceptable profit, estimate the value of the house at the time of completion (factoring in estimate of market chnage between now and then) and estimate cost of build, including interest on borrowings or interest foregone on own money used for buying land and funding build.

Future value less min profit and less cost of build =
maximum you should pay for the land.
———————————————————-
PS comparing new build to older houses to older houses, Mello Roos etc can be put in a comparison by dividing MR pa by mortgage rate divided by 100 ( eg 0.055)

[sdduuuude]

Ironman,

I am with you 100%. Would love to do this also.

One issue is – how to finance it. You typically need a construction loan for all the materials, then when the house gets final inspection, you convert the construction loan to a regular mortgage.

Building it yourself can mean a 2 or 3 year project instead of a builder popping it up in a few months. This means – you probably can’t get a construction loan because they usually only stretch to 12 months, I think. So, you need the cash.

I suspect the comment where the poster suggested you may end up spending the same amount of money as the market value is correct. The appeal to me is that I get to design it myself. I am a closet architect. Also, the idea of a small house on a big lot is appealing to me and it seems the only way to get that is to do it myself. Finally, you can build a small house today, then add on as families and income grow.

Also, you don’t need illegals to do it cost-effectively, just finding some good subcontractors is fine, and helps speed up the project.

[sdduuuude]

Ironman,

I am with you 100%. Would love to do this also.

One issue is – how to finance it. You typically need a construction loan for all the materials, then when the house gets final inspection, you convert the construction loan to a regular mortgage.

Building it yourself can mean a 2 or 3 year project instead of a builder popping it up in a few months. This means – you probably can’t get a construction loan because they usually only stretch to 12 months, I think. So, you need the cash.

I suspect the comment where the poster suggested you may end up spending the same amount of money as the market value is correct. The appeal to me is that I get to design it myself. I am a closet architect. Also, the idea of a small house on a big lot is appealing to me and it seems the only way to get that is to do it myself. Finally, you can build a small house today, then add on as families and income grow.

Also, you don’t need illegals to do it cost-effectively, just finding some good subcontractors is fine, and helps speed up the project.

[sdduuuude]

Ironman,

I am with you 100%. Would love to do this also.

One issue is – how to finance it. You typically need a construction loan for all the materials, then when the house gets final inspection, you convert the construction loan to a regular mortgage.

Building it yourself can mean a 2 or 3 year project instead of a builder popping it up in a few months. This means – you probably can’t get a construction loan because they usually only stretch to 12 months, I think. So, you need the cash.

I suspect the comment where the poster suggested you may end up spending the same amount of money as the market value is correct. The appeal to me is that I get to design it myself. I am a closet architect. Also, the idea of a small house on a big lot is appealing to me and it seems the only way to get that is to do it myself. Finally, you can build a small house today, then add on as families and income grow.

Also, you don’t need illegals to do it cost-effectively, just finding some good subcontractors is fine, and helps speed up the project.

[sdduuuude]

Ironman,

I am with you 100%. Would love to do this also.

One issue is – how to finance it. You typically need a construction loan for all the materials, then when the house gets final inspection, you convert the construction loan to a regular mortgage.

Building it yourself can mean a 2 or 3 year project instead of a builder popping it up in a few months. This means – you probably can’t get a construction loan because they usually only stretch to 12 months, I think. So, you need the cash.

I suspect the comment where the poster suggested you may end up spending the same amount of money as the market value is correct. The appeal to me is that I get to design it myself. I am a closet architect. Also, the idea of a small house on a big lot is appealing to me and it seems the only way to get that is to do it myself. Finally, you can build a small house today, then add on as families and income grow.

Also, you don’t need illegals to do it cost-effectively, just finding some good subcontractors is fine, and helps speed up the project.

[sdduuuude]

Ironman,

I am with you 100%. Would love to do this also.

One issue is – how to finance it. You typically need a construction loan for all the materials, then when the house gets final inspection, you convert the construction loan to a regular mortgage.

Building it yourself can mean a 2 or 3 year project instead of a builder popping it up in a few months. This means – you probably can’t get a construction loan because they usually only stretch to 12 months, I think. So, you need the cash.

I suspect the comment where the poster suggested you may end up spending the same amount of money as the market value is correct. The appeal to me is that I get to design it myself. I am a closet architect. Also, the idea of a small house on a big lot is appealing to me and it seems the only way to get that is to do it myself. Finally, you can build a small house today, then add on as families and income grow.

Also, you don’t need illegals to do it cost-effectively, just finding some good subcontractors is fine, and helps speed up the project.

[Bugs]

If your primary motivation is saving the money then my advice to you is to be patient, wait for the pricing to drop and just buy an existing home.

The market for move-up homes in the outlying areas – which is what it sounds like you’re driving at – is already pretty weak and will only get weaker as this current trend continues. Sooner or later those prices will drop below their respective costs of construction.

Not only will you save the money, you’ll save the time and the effort and the uncertainty. As someone else already noted, construction projects can be very stressful for the non-professionals, and marriages sometimes don’t withstand that added stress.

If you’re absolutely set on building your own home, use a general contractor to get the foundation, framing, roofing and sheathing completed, and then do the finishes yourself. During a housing bust it’s not hard to find a contractor who will work at a reasonable or even minimal profit margin just to keep their crew together.

[Bugs]

If your primary motivation is saving the money then my advice to you is to be patient, wait for the pricing to drop and just buy an existing home.

The market for move-up homes in the outlying areas – which is what it sounds like you’re driving at – is already pretty weak and will only get weaker as this current trend continues. Sooner or later those prices will drop below their respective costs of construction.

Not only will you save the money, you’ll save the time and the effort and the uncertainty. As someone else already noted, construction projects can be very stressful for the non-professionals, and marriages sometimes don’t withstand that added stress.

If you’re absolutely set on building your own home, use a general contractor to get the foundation, framing, roofing and sheathing completed, and then do the finishes yourself. During a housing bust it’s not hard to find a contractor who will work at a reasonable or even minimal profit margin just to keep their crew together.

[Bugs]

If your primary motivation is saving the money then my advice to you is to be patient, wait for the pricing to drop and just buy an existing home.

The market for move-up homes in the outlying areas – which is what it sounds like you’re driving at – is already pretty weak and will only get weaker as this current trend continues. Sooner or later those prices will drop below their respective costs of construction.

Not only will you save the money, you’ll save the time and the effort and the uncertainty. As someone else already noted, construction projects can be very stressful for the non-professionals, and marriages sometimes don’t withstand that added stress.

If you’re absolutely set on building your own home, use a general contractor to get the foundation, framing, roofing and sheathing completed, and then do the finishes yourself. During a housing bust it’s not hard to find a contractor who will work at a reasonable or even minimal profit margin just to keep their crew together.

[Bugs]

If your primary motivation is saving the money then my advice to you is to be patient, wait for the pricing to drop and just buy an existing home.

The market for move-up homes in the outlying areas – which is what it sounds like you’re driving at – is already pretty weak and will only get weaker as this current trend continues. Sooner or later those prices will drop below their respective costs of construction.

Not only will you save the money, you’ll save the time and the effort and the uncertainty. As someone else already noted, construction projects can be very stressful for the non-professionals, and marriages sometimes don’t withstand that added stress.

If you’re absolutely set on building your own home, use a general contractor to get the foundation, framing, roofing and sheathing completed, and then do the finishes yourself. During a housing bust it’s not hard to find a contractor who will work at a reasonable or even minimal profit margin just to keep their crew together.

[Author]

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