The Costs Of Land Development
I already own a few rentals and I want to try my hand at building. I am in the booming South Florida area where new homes are being built at a very rapid pace but are almost getting to expensive for "regular people" to own. I'll give you guys a breakdown and maybe someone can help me get an estimate of the costs.
I have found lots I can purchase for around 25k. I was told buy another investor that the cheapest I could build for is about $65 per sqft. My plan was to build a moderate 1200 to 1300 sqft 3/2 for about 83k and sell it for about 130k, just to get my feet wet with the process and then build larger projects as my experience grows.
My problem is, I only have 20k to work with and I don't want to start eating into more of my own money. Are my goals realistic? Can I get this done with less than 20k? Any techniques or advice will be appreciated.
I'm not sure what the requirements are down there but here in Michigan if you have a license your senario would be feasible. I am getting ready to build one using a local lumber suppliers financing program. Typically they want about 50% of the land cost paid for if not all of it before they lend the money. That with an end mortgage commitment. I would watch your numbers though. 1300sq x $65 = $84,500 + $25,000 =$109,500. You need to consider financing costs, selling cost, and of course a contingency fund. So make sure you do the math before jumping in and good luck
In my area it is difficult to find lots that will allow 1200-1300 sq ft homes. Most of the counties here require a larger min sq ft before they will approve the zoning.
I think the counties are way overstating their zoning powers when they require such conditions. However, nobody is willing to go to the expense and time to fight the counties.
I thank you guys for your answers!!