Questions About Building
I am just getting started in Real Estate, and was wondering about the benefits of buying land, then building yourself to sell for a profit. The scary thing to me is that is doesn't seem that hard to make a good living this way, so my first thought is that I'm missing something entirely! Can anyone give a new guy some advice? Is it as easy as it seems? besides finding the land, what's the very next step?
Thanks,
_Diemus
you can make almost everything seems easy. how hard does "find a poperty on the cheap via a motivated seller and resell for quick cash" sound? yet so many people fail to get started or even stay persistent. do you have a background in construction and building? if not, i would say more research is in order. after you find the land you need to find out how it's zoned and who owns it and all that good stuff. hopefully someone here would be able to give you more specifics but overall, i would say more homework is in order. try the library.
I'm in the same boat. I found a lot, GC, Archt., and a web site with a calculator that let me put all the costs in and it showed me a 10.49% Cap Rate (dinkytown com) but I still must locate an investor.
[addsig]
Greetings All,
Knowledge is the key to becoming successful in the building industry.
Yes, money can be made at finding lot / property, developing it and putting up homes. What many fail to realize is that there is RISK involved.
The majority of those that get into the actual business of building / rehabbing will fail at it, mostly due to not following sound business principles, ie making decisions based upon emotions vs. logic. Working capital is also a hugh problem with most builders / developers.
There are always unforeseen problems, so one must plan for such.
You need to have a network of knowledgeable people that can help you in determinging when to buy........real estate agents, home inspectors, general contractors, lenders etc.
TCI does "Lenders" tab for those that need financial sources outside of your traditional lending agencies, check at the top of the website for the financing issues.
There are numerous people from all walks of life that are members of this site that can and do offer free advice.
Its a matter of what you do with that advice that can help make your goals come true.
Good luck.
Quote:
On 2003-09-30 17:54, NC_Yank wrote:
Greetings All,
Knowledge is the key to becoming successful in the building industry.
Yes, money can be made at finding lot / property, developing it and putting up homes. What many fail to realize is that there is RISK involved.
The majority of those that get into the actual business of building / rehabbing will fail at it, mostly due to not following sound business principles, ie making decisions based upon emotions vs. logic. Working capital is also a hugh problem with most builders / developers.
There are always unforeseen problems, so one must plan for such.
You need to have a network of knowledgeable people that can help you in determinging when to buy........real estate agents, home inspectors, general contractors, lenders etc.
TCI does "Lenders" tab for those that need financial sources outside of your traditional lending agencies, check at the top of the website for the financing issues.
There are numerous people from all walks of life that are members of this site that can and do offer free advice.
Its a matter of what you do with that advice that can help make your goals come true.
Good luck.
Good post - there can be tremendous risk involved and even when a project is presold before closing escrow NUMEROUS unplanned for factors can and will come up. Governmental entities are notorious for changing the game plan in ways that eat away at the margin.
Minimize the risk as much as you can and incorporate contingency funds for the things that you did not or could not foresee.
An example: I am working on a single 23,000 sf commercial/industrial bldg development project that is presold. In one pleasant building dept 30 minute meeting a city official cut $60k right out of our profits. Never mind the fact that we had met with him about a dozen times prior to this to try to cover all our bases. This and a handful of other issues on this project can eat away at the margin pretty quickly – we will make money on the project but its frustrating at times to see good money disappear. Speak softly and carry a nice sized contingency fund.
I have a meeting set up with the Owner Builder network. They assist you throughout the entire building process, give you lists of suppliers that give builder discounts, give you a list of subs that are used to working with owner builders ( they will kick them off the list if they receive complaints about the subs), and they have lenders to help with financing.
The Northeast section may be in your area.
http://www.ownerbuildernetwork.com/northeast/index.html
I am thinking of building also and want to have someone experienced backing me up.
They charge 2.95 per sq.ft. for living space and .75 per sq. ft. for non-living space (garage, porches, etc.)
Good luck, I'll keep everone posted.
Thanks for your replies, they've really helped everyone.......
-Diemus
I have 25 years experience in both residential and commercial.And strongly suggest Owner Builders to ****Must Reach Senior Investor status before posting URL's***f I can answer any tech questions feel free to ask.
Mike