Replies

1. 
   Mooney | Oct 13, 2002 09:29pm | #1

   Would you please be more descriptive on the owner builder statement ?  Since you are looking for a builder , Im lost here.

   Tim Mooney

1. 
   Piffin | Oct 14, 2002 12:31am | #2

   Me three!.

   Excellence is its own reward!

2. 
   dotc4 | Oct 14, 2002 01:09am | #3

   Basically, we are looking at all of our options at this point. We have approached 2 builders; 1 said it was too far away for him to build, that he did not want to do a job that far away. The other has taken 6 weeks to give us a price (which was called to us over the phone when he was on his way to a soccer game).  My husband is an electrician and someone brought up to him why he did not consider the owner/builder option.  So now I am trying to gather info on which is the best way for us to proceed. I have read that it is hard to get a loan for owner/builder, and that you have to put 20% down, etc. This is all new to us, so, again, any info would be appreciated.

   thanks

1. 
   Mooney | Oct 14, 2002 01:25am | #4

   Ok , Dot , were gone . Im with you.

   You are talking about being your own contractor for your own home . Well, I  see you`ve done some reading on it too. The best thing to do if this is what you both want is send HIM to the bank. Hes the one who has the knowledge of you both in building. The only way he  will know is ask . His presence in the bank will need to be professional, much like a job interview .  Its risky for home owners to take out a full loan. You probably read my statements in another thread. Ask every banker in town , what his interrest rate will be . Your husband is shopping interrest rates to build his own house , not making a spectacle of whether he can have the money to build his own house . Got it ?

   Tim Mooney

2. 
   Snort | Oct 14, 2002 01:43am | #5

   We've owner built 2 houses with bank loans. It seems to all depend on the particular lending institutions.

   If you're capable of GC'ing your own house, and can convince a bank or mortgage broker of that, you've got a leg up.

   Do you own the lot? Have plans? Know subs? Have or can get credit to set up materials accounts?

   The mortgage broker who belived in us was the key to the bank's vault...by doing the GC'ing ourselves, we were so far under what the bank expected, moneywise, we could get draws over the phone immediately.

   It's a full time (well, 98%) job, but, well worth it...

   and on top of it all, I love working for folks who GC their own houses, march to the same drummer, I guess.

   Anyway, I understand what you're saying, and best of luck'

   bb It's okay, I can fix it!

1. 
   dotc4 | Oct 14, 2002 01:51am | #7

   Well... we have a lot we are closing on now. We have prints for the house. We have a home equity line of credit set up already.  We have talked to a guy who builds houses for a living, who wants to set everything up for us, as far as the trades are concerned. (He does this regularly "on the side" in addition to his regular job of superintendant for a large builder) His deal is he will charge a "fee" to do this for us, and we have to take out our own loan.  I am a little leery of this, but my husband thinks it could save us thousands. (We do not have a price from this guy yet, just spoke with him on Fri.) What do you think?

1. 
   BillHartmann | Oct 14, 2002 01:59am | #8

   There are at least two company that specialize into this. Presidential Homes and Ubuiltit (or some simialr name). They both are a franchise operation and have builders in different areas.

   They claim that they can arrange fiancing and have sources for materials and sub-contractors. Both of them use the term "owner assisted" building or something similar.

   I know nothing about them other than I have seen Presidentials ads in the local paper.

   Also do a google on "owner builder homes" and you will get lots of hits.

2. 
   Mooney | Oct 14, 2002 02:21am | #9

   If you are leary , it may for good reason. Dot , read the links Piffen was so good to post . There is more there than you will get in  this one post . Building your own house for the first time is a learning experience , and you need to get started reading . There is so much you need to know in those posts . Then come back and ask us your questions . WE will be here .

   Tim Mooney

3. 
   dotc4 | Oct 14, 2002 05:14pm | #11

   Thanks so much for all who have answered me.  I do have a question regarding builders (general contractors) in general. If we decide to go with a builder (as opposed to doing it ourselves with the owner/builder option)  how do we present our plans and wants and get an answer back?  We seem to be having trouble getting a builder to get back to us, and I don't know if we are doing something wrong, or are just "in the wrong place at the wrong time"!  All of your thoughts would be appreciated. Thanks again!   I will read the links and let you all know if I have any further questions, which I am sure I will!

4. 
   Mooney | Oct 14, 2002 05:34pm | #12

   I wasnt in on the phone call, so I have no idea what was said . But I will tell you how it goes with me . Im always screening the calls I get , to obtain the information I need. Often times I am director of the call they made to me , so that I can figgure out if I need to spent more time or pass on the call for work. A lot of times what is said turns off a contractor , and he doesnt call back. I usually  reserve this information till the last of the call if Im not interrested ," Well, Im pretty busy and I really dont think I can get to it , but I will reccomend my competition. " Ive done two things . Ive passed on the work , and Ive tried to put my competition on something I dont want in the first place , so I might have a shot at something else while he is busy. Calls come in all the time , and I take picks on what I want  for several reasons . It could be a number of things . I suggest you evaluate your call to them. I also suggest to keep calling other contractors that are reccomended . Think about your  approach , before the call, and be sure to ask questions your self that are well thought out . You must live with this man for a short while and he must live with you , so a good business relationship takes thought and choosing . You also have the right to discontinue the call .

   Tim Mooney

5. 
   dotc4 | Oct 14, 2002 08:39pm | #13

   We went to meet with a particular builder in person, presented our plans. He said he had to see if the lot was too far away, or if he would be able to do a good job for us. He was supposed to send someone out the next week, which did not happen, and it was 2 weeks before anyone went out to the lot. He kept saying he was working on our stuff, and he would call. The last time we heard from him was him giving us a price and telling us to call in the morning. (The deal here being we are closing on our lot in 1 week, and the financial people we are dealing told us, as well as the builder we needed 7 days for an appraisal to have a 1 time closing). We called the builder on Wed. and accepted his price, asked him to fax us on paper standard features, etc. He called back Wed. night and said he was taking it home to work on and would fax us and the financial place Thurs. am. We, nor the financial people heard anything back from him on Thur. The financial place called me 4:30 pm Thurs. and said they were scared, that we would not be able to have a 1 time closing. I told them to proceed with closing just on the land. I also gave a courtesy call to the builder and left a message as such to him. (all very nice, no hard feelings) I asked him to fax us the info when he had it. That was 4 days ago, and still no word!  Just to give you an idea of what has been going on. The initial meeting was 5-6 weeks ago.

6. 
   Mooney | Oct 14, 2002 09:33pm | #14

   Now you have put another light on it for us to see . It gives us more information to consider. It sounds like this is the way that this man does his business . I cant imagine you having to deal with this man on the long haul of building you a house . Im sorry but it doesnt sound like he is the man you need. You might however take his numbers and use them and your own at closing for a full loan and be your own contractor , as you already said you were thinking about. I feel your pain .

   Tim Mooney

7. 
   dotc4 | Oct 14, 2002 09:50pm | #15

   Im glad you feel my pain! I think my hair is turning more gray than usual.  I was beginning to think I was crazy, are all builders this way?  I spoke to my financial people today and they give out owner builder loans, with 5-10% down. Just thought you might like to know. I am trying to do my homework! Have been reading the links. All very interesting. There is definitely a lot to think about, and learn about.

8. 
   Mooney | Oct 14, 2002 10:03pm | #16

   Yes , they are that way but me . LOL just kidding . Good luck and keep us posted .

   Tim Mooney

9. 
   blackcloud | Oct 15, 2002 12:34am | #17

   Dot,

   We are building a 3700sqft owner/builder project.  The biggest thing that helped us with the banks was that we had building knowledge and that my wife is VERY organized, when we went to the bank we had a 3" ring binder with bids from the subs that we had talked to (note: use guys that are well known in the area, even if you do not use them, there bid will carry weight with the bank and it will give a good starting price for the work to be done.) we had broke down the construction just as a general would do which helped to make sure it really was in our budget.  Also add about 10 percent over total cost to cover the little things that generals take for granted and already have worked into there overhead (temp power, portable toilets, erosion control etc.) The last thing I would reccommend is that if you can get a rollover loan, you pay a few points for the loan but you have one loan with no second closing and you can get it at current loan rates which are lower than a typical construction loan.  Good Luck

   Jason

10. 
    dotc4 | Oct 15, 2002 05:13pm | #19

    Thanks for info. What is a rollover loan?  We are looking at a construction to permanent mortgage; same thing?

11. 
    blackcloud | Oct 15, 2002 07:33pm | #24

    Yes it is the same thing.  The loan converts automatically after the construction period.  Be careful about the length of time for the construction phase, different banks allow different amounts of time.  12 months is the standard here in the Pacific Northwest.

    Jason

12. 
    junkhound | Oct 15, 2002 08:30am | #18

    Another option to consider Dot.    You may not realize how really inexpensive it can be if you DIY ALL yourself, much easier if your Hubby is electrician (what scares most off).  As said earlier, read in spare time, e.g -- forget the TV.

    DW and self with 5 and 7 YO sons built our 1st house (5300 sq ft) when we were in mid 20's without any construction loan. Had loan for the land, paid as you go for all else, took 2 years. Had painted plywood floors for 2 more years <G>. You do need enough cash or low interest credit (you will mess the whole deal if you ever use a credit card!) to buy the needed tools if you do not already have them.

    3-4 years from now you will have a free and clear house and be amazed at how you can have so much money coming in when you don't have to pay out any mortgage or loan payments. If you enjoyu it, time to start on another house?

13. 
    dotc4 | Oct 15, 2002 05:15pm | #20

    I am not sure that is an option, just because we both work full time. Something to think about though.

    Does anyone know a site to go on that a person can calculate just interest payments?  I would like to know what we are going to have to carry on interest as the building is being done. Thanks to all!

14. 
    Mooney | Oct 15, 2002 05:36pm | #21

    Go to loans off of MSN , or Yahoo home page , and slide ride in their girl. Also will give interrest  on every day standings.

    Have fun ,

    Tim  Mooney

15. 
    dotc4 | Oct 15, 2002 06:57pm | #22

    Thanks, will give it a go!  Just wanted to tell you guys how much I appreciate all your help.   You are sure making this process a lot more enjoyable than at first! 

16. 
    Mooney | Oct 15, 2002 07:14pm | #23

    You should also be able to read up on a roll over loan and all the other kinds while you are there. Thanks  and your welcome ! We dont spread kinds words to heavy on each other , so its nice to have a pat on all our backs every now and again. LOL!

    Tim Mooney

17. 
    Snort | Oct 14, 2002 03:08am | #10

    Dot, I would want to check with some of his recent clients, make sure with him (and municipality?) that your plans are buildable on your lot, define all his responsibilities, find out if anybody was backing any of his responsibilities( partners, insurance, pets...),and, get the ubitquious timeline. I've met some folks that do this very well, and save their clients some money...I've also run into some yahoos...and you are looking at having a bunch of bucks out there...oh, yeah, then theres's that "fee" thingy? It's okay, I can fix it!

    Edited 10/13/2002 8:09:43 PM ET by bucksnort billy

3. 
   Piffin | Oct 14, 2002 01:48am | #6

   http://forums.taunton.com/n/mb/message.asp?webtag=tp-breaktime&msg=23513.1

   http://forums.taunton.com/n/mb/message.asp?webtag=tp-breaktime&msg=23698.1

   http://forums.taunton.com/n/mb/message.asp?webtag=tp-breaktime&msg=23724.1

   http://forums.taunton.com/n/mb/message.asp?webtag=tp-breaktime&msg=23232.1

   http://forums.taunton.com/n/mb/message.asp?webtag=tp-breaktime&msg=23110.46

   http://forums.taunton.com/n/mb/message.asp?webtag=tp-breaktime&msg=22878.1

   .

   Excellence is its own reward!