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Seeking Advice about Buying Lots

| Posted in Business on January 24, 2003 04:58am

I’ve been working for a builder for about a year and doing some remodeling on my own.  I am interested in possibly building a spec starter house(s) this spring.  The guy I work for has been great about giving me advice, but I’d like to hear other opinions as well.

First, my boss has suggested that building one spec house is riskier than building two to three.  One must come up with more money to build, say three, but, according to him, the profit you make on selling one will cover the cost of holding the other two.  Any thoughts?

Second, I am really stumped about finding suitable lots.  Like so many areas, land prices here (outside of Atlanta) have gotten so high that “low end” houses start in the high $100’s and quickly go to the high $200’s.  To me, a true “starter house” would be a small but architecturally interesting 1920’s bungalow, perhaps in the $80k to $100k range.  How do you find lots that are reasonably priced?

Third, he suggested that I develop a detailed budget (I do a lot of budget work for him) and that I pick out certain things that I can do well.  For example, perhaps do flooring, trim, maybe siding, maybe painting all myself (with a helper) and pay myself during the building process.  Thus, when the house sells, I would have earned money both by doing parts of the construction as well as the profit on the entire process.  Any thoughts?

thanks.     ChrisA

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Replies

  1. DANSW44 | Jan 24, 2003 05:18am | #1

    I am just getting in to building also and have built one house already my own.  I also work as contractor and it was challenging with a family.  I did most of the work my self except for the basement and the footings, shingles, plumibing and heating.  I rough it with a friend of mine.  I have some suggestions on building lots.  First look at the perc test of each land if some didnt do a perc test find out why?  If end up doing a engineer septic there are a lots of costs involved.  Second take a look at the soil what is the composition of it, is it sandy, clay, loam or is there a high water table.  These things all have different underlying problems.  Third check to see what the wells in the areas are like you may find out its an extra deep well or other problems.  Fourth check out if the land has had any hazardous materials dumped on it or was it an existing habitat for some business.  Fifth check with the township or any building restrictions.  Sixth this is very important where are the utilities and will you require any easements granted from other land owners.  Seventh good luck.

  2. Mooney | Jan 24, 2003 06:31am | #2

    Lets start here first , as its required reading.  Spec house from hell;

    http://forums.taunton.com/n/find/findRedir.asp?webtag=tp-breaktime&mg=119F1647-AA90-4FA4-

    Tim Mooney

    1. CHARITY116 | Jan 24, 2003 04:50pm | #4

      Tim, when I click on the line, I get an error message.

      ChrisA

      1. Mooney | Jan 25, 2003 01:01am | #8

        Search advancesearch " spec house from hell"

        Tim Mooney

        1. User avater
          BossHog | Jan 25, 2003 01:17am | #9

          I gave him the link above, in #26854.8

          Can't you goat ropers down ther pay attention ???....................(-:Q: Why do gorillas have big nostrils?A: Because they have big fingers.

  3. ponytl | Jan 24, 2003 08:25am | #3

    I like "in fill lots"  and there are still alot of em around...  look in older areas that are coming back...  find a vacant lot or a house that was built on 2 lots... takes a little effort and usually a personal meeting with the owner but it can be done.... you are in an exsisting area... you know the home values (yours can be 10% more for being new)  most of all...  know your banker meet the person that says yes or no to loans... then do all your business with that bank... once you have done a few deals... don't shop your banking... "dance with the one that brung ya"  my banker more than once has said... "let me see if i can cut the points on this for you"  I tell em i can live with it the way it is on this deal....  when i am tight on a deal and a point or so makes or breaks a deal... they work with me... always do what you say... furnish what they ask for have all your payment to them auto withdrawal.... 

      i started with nothing and still have most of it left

    1. CHARITY116 | Jan 24, 2003 04:51pm | #5

      Thanks, I especially like "i started with nothing and still have most of it left".

      ChrisA

  4. Nails | Jan 24, 2003 05:06pm | #6

    C. A. This old formula is a good rule of thumb for me . The cost of the lot is 1/5 the cost of the finished house which is determined by the houses surronding it . Another point is go where there are subs trucks lining both sides of the street and by a lot there. The old folks I've talked to said if I had a chance to do it all over ,I'd take more chances in life. Good luck to you.

  5. User avater
    BossHog | Jan 24, 2003 11:12pm | #7

    This is the Spec House from Hell thread Tim was trying to post.

    A hospital bed is like a parked taxi with the meter running.

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