Looking To Build A House In Bay Area
Hi I've got kind of a crazy idea and wanted to run it by everyone here in this forum.
What I'm looking to do, is:
1.) buy some land fairly close to silicon valley that is somewhat scenic has a small acreage (1-3 acres)
2.) build a house on it and sell it ASAP
So, my thought is just to finance the whole thing myself, buy the property etc. And then get a construction loan to build a 2000 SF home. I want to try and be the GC (however never done this before). Then once the house is done put the house on the market. From what I've seen from other houses on the market, and also
from speaking to a real estate agent. It looks like I could make a couple hundred grand on this deal.
My question is, does this seem like a straightforward approach?
Let me know your thoughts,
Thanks,
Andy
Here's an alternative.
Purchase a lot, negotiate a contract with a builder after you and builder decide what type & size house would work in the area, you add something to builder's fee and then market the property as a total package (new home on the lot). Builder does not start construction until Mr. & Mrs. Jones have signed purchase contract with you for the total package.
This way, you're not stuck with a spec that may or may not fit the surrounding neighborhood.
apyles,
If I can add a thought; a good size board placed on the lot, depicting future house on the lot could also be a nice advertising of the future project. Right there you can post the message communicating your readiness to modify the project to the spec of the buyer. The pickier the buyer the better the profit would be. Going for the acres to tree in that aria where the land is expensive with only a 2000sft house on this size of the lot might be a bit disproportional, don't you think?
Hi NancyChadwick,
thanks for your post. thats a good point. Problem is how do I find the buyer?
My concern is if I buy the property which will set me back a little, and I cannot find any such buyer that wants to build. Then I could be stuck paying a mortgage until this occurs. I guess my thought is the house will be more marketable after it is built. As long as the house is generic enough to appeal to
most buyers. Obviously before I build I want to do a survey of the surrounding homes and build something similar to what is currently available.
omega1,
good point. I'll look into putting up a sign, but I don't want to wait too long as every month I wait and not build I lose money.
To your point of 2000SF being too small. That could be. I'll have to check into that. Due to the area that its in this may or may not be true. (the Santa cruz mountains is the area) But I will follow up on that point.
On finding the buyer for a to be built home...
One thing you might be able to do is put a longer settlement date in a purchase contract for the lot AND include a provision specifically giving you the right to erect marketing signage on the property prior to your going to settlement with the seller. Thus, you may be able to having more time to find a new home buyer before you have to close with the seller.
If you want to try to sell it yourself...get ads in trade publications (RE magazines, etc.). If you want to list it with a real estate agent, interview several. Suggest you see what agents/agencies have new construction listings in that area and in the price range for your "total package." This way, you'll hook up with an agent with new construction experience and agency that has generated leads/potential buyers for your property.