Path To Become A Builder - Please Help !

Comments(9)

• 
  jonesoe3017th December, 2003

  What part of the country are you in? I'm sure you can drop in to your local Building Department in your city or township and they can give you some guidance on the requirements. Also the local Home Builders Association should be able to help you.

• 
  Tedjr17th December, 2003

  Buy a lot and build a house. Sell it and buy two lots and build two houses. Sell those and buy some more lots etc etc. As you grow you will learn alomg the way. You can not just start with 500 acres and build 5000 houses unless you are filthy rich and if you are then why build houses. It is really a tough business with a lot of risk.
  
  Good LUCK and HAPPY HOLIDAYS
  
  Hope this helps some
  
  Ted Jr

• 
  rei_investing17th December, 2003

  Thanks for your replies folks - are there any books, articles that can help me with ground start. I agree that it is going to be a step-by-step learning rather than jumping big. I'm in east coast (MD) by the way.
  
  Thanks,
  Sam[ Edited by rei_investing on Date 12/17/2003 ]

• 
  nlsecor18th December, 2003

  I am sorry you got such poor response. I too am looking for more information on that subject. It is the ultimate in RE. I cannot say much about the others as I don't know much more. However, if you are good at networking, I would look for a good general contractor. If you pick his brain, you can get a better idea of what you are looking at. I have a feeling you are interested in things like, how much licensing costs, building costs, permits cost. Another thought is to stop and talk to anyone you see building a development like the one you want to build. If you want to build a 4 plex, stop and talk to the guys you see building a 4 plex. Contact their boss and pick his brain. I admit I am no expert at this, as even buy businesses that are already developed.
  [addsig]

• 
  jminor20th December, 2003

  If you are able to qualify for a construction loan find a builder whom would share the profit equity from building if you could get the financing. (this way you get training and paid). Mainly look for builders who are willing to educate you in the skills of being a building contractor which is a step in the right direction toward developing, you also can get an inside track on land availble through the planning and zoning community meetings. I also have been advised to join the Home Builders Association BUT have also been detered by builders who have partnerships suppling knowledge finances and contacts. I have bought one book so far(othing special)and surfed for building info but I'm finding out make the contacts and having some basic knowledge of real estate you can pick up the key skills to succeed face to face vice books.

• 
  GFous21st December, 2003

  Quote:
  On 2003-12-17 19:43, rei_investing wrote:
  Hi All,
  I got no response on this on site - can anyone out here help ? Thanks -
  Currently I'm doing pure rentals and one of my long term goals is become a builder, develop raw land and build new houses on them. I have had searched the archives and haven't really found an indepth information for what I'm trying to do here i.e. figure out a path to become a builder. I figured that to become a successful builder and to build new homes, land development aspects are very useful. Currently I work as a "Software/Systems Architect" and I have no background in real estate development or what it takes to become a builder. So, I searched the archives and found that Ray Alcron and many others have great reviews for the book "Real Estate Development Workbook and Manual" by Howard Zuckerman, George Blevins.
  
  Can you folks please point me to good web-sites for my education, faq's/how-to's for builder's licenses, any articles, books. I would greatly appreciate your advice into this. Also, I certainly recognise the fact that our ****This URL Not allowed**** site is also an indespensible source of information. Thanks Again !
  
  
  Thank You,
  Sam Kar
  
  
  
  
  [ Edited by rei_investing on Date 12/17/2003 ]
  
  
  
  
  I have copied and psted this post from elswhere in the developer forum topice:
  
  Identify the land, the market, and the product. If you have one you need to get the other two pretty clear. This means a market study (formal or informal) Once you have all three you are in good shape
  
  Now assuming you know you want to build/develop, where you want to build and develop it, and who you want to do it for…you need to determine if the plan is economically feasible.
  
  A developer is like a movie producer – we assemble all the talent and get the best of what they have to offer.
  
  I will list some of these talents for you – they are not used in chronological order but in most cases you need all their efforts yesterday.
  
  • Market Research Firm – what will your absorption be and for what product
  • Engineering firm – can give you due diligence engineering estimates for infrastructure and site prep
  • Title Company – prices and comps in areas
  • Architect – Your product and some cost estimates
  • Builder- help with design and costs
  • Politician – zoning and planning help, RPD approvals etc.
  • Advertising agency – help in defining your customer
  • Realtor – help in selling and defining prices and customers
  • Decorators – color selection, product selection
  • Attorney- contracts, hidden bodies, etc
  • Banks- the money
  
  Your path to becoming the developer can begin with one of the talents above - or a combination of them. I do suggest one of the first steps:
  
  Land, Product, or Market.
  
  Gregg
  
  
  
  _________________
  Gregg Fous
  Investor/Developer
  
  "Under-promise and over-deliver"[ Edited by joel on Date 01/20/2004 ]

• 
  johnqreplies21st December, 2003

  You may want to consider a General Contractor's license for your state. You can study for it part time and it will reveal a wealth of knowledge to you.
  
  And yes, it is just like a movie producer.
  
  But one thing that's not been pointed out is this: Like the movies, building/developing can be extraordinarily risky.
  
  If you plan to go down this path, set aside at least one year of income or savings to support yourself (it may be that long before you sell your first house) and if possible, try to pre-sell your properties before building.
  
  FYI, I'm not a builder, but my father-in-law is. He is enormously succesful but lost everything in 1982. It's taken him twenty years to get back to multi-millionaire status. I grilled him endlessly on how NOT to lose your a**.
  
  Be careful.

• 
  jackso1j21st December, 2003

  Hello,
  
  I am builder in MD and the following are licensing requirents in MD.
  
  1. Obtain a construction business license from the circuit court. (Approx $20)
  
  2. Obtain Liability Insurance. ($1M - Approx ($6K Yearly)
  
  3. Register with a Home Warranty Company. (10-20K Bond required)
  
  4. Register with MD Attorney General. (They will assign you a builder's registration number. Approx. ($600))
  
  5. Depending on what county you are building in they may require that you register with them as well. (I.e. PG and Montgomery County I know require additional Licenses and Baltimore, Washington and Frederick couties does not)
  
  6. Then you need a good engineer, architect, accountant, project manager, attorney, real estate agent, banker, SUB-CONTRACTORS and patients.
  
  The list above may not be all inclusive, because counties change requirements, but the first 4 is the same and should be done in that order.
  
  Permit cost varies from county to county. I have paid anywhere from ($800 - $30K) for building permits. I have only built 1- 5 house developments. I am working on a 20 house sub as we speak. But, as most of the other guys have stated start with one house and get the process down, because I lost a lot of money before I really learned the ropes.
  
  Send my a private email for additional information.

• 
  Codythebest21st December, 2003

  We are all investors here so be a "no down-no money out of my pocket" builder.
  I do some "permutation".
  I look for few acres land's owner who are selling but do not know or want to build. I do the paperwork to become the land owner and i will pay him with a certain number of unit.
  Last was 6 acres for 12 townhomes. i gave him 3 units and 6 units paid the mortgage for the builder. I got 3 units for me and i never took a dime from my pocket. Units were sold $180K preconstruction price...