Building a home vs. buying an existing home!
I’ve been on the hunt for an existing home as a vacation home for about 9 months and the process is so frustrating. I’m seeing list prices go up and up, and list prices are meaningless anymore because every property I put in an offer is part of a massive bidding war. It’s emotionally exhausting. I saw there is a plot of land for sale in a neighborhood I like (it’s part of an established HOA community) and https://100001.onl/ https://1921681254.mx/ I’m considering buying the land and building. I’ve never built a house before. What is the process like? How do the costs compare? Are there hidden costs or risks I need to consider? I’m just trying to figure out if this is a logical or feasible path to pursue. I’m getting very defeated and trying to think outside the box.
This can end up saving you a lot of money, but it will probably also be a nightmare, esp for someone who has never built a house before. You will need to hire a GC, but even managing the GC will have its problems and if it is a bad/unhonest GC that will be hell on earth. Also, if you work in IB, how will you have time to manage this when you barely have time to take a shit? What is the cost of the land vs the cost of the vacation homes that don't require ground up construction? How big of a vacation home are you thinking? What location? I'm trying to gauge your cost savings by building yourself
As Fredburger said, managing it can be a nightmare if you don't know what you're doing or have the time to really get into it. That being said, building it yourself is a really good way to make sure you get exactly the house you want. Aside from all the project management stuff (if you're really curious, the RE forum often has threads about people wanting to go out and do development on their own, this wouldn't be too far off except you obviously wouldn't be doing it to sell. The ideas of managing the consultants, budget, schedule, etc. are all relevant though), there are levels to how you can make it your own. You can go from just paying a GC to build a pre-made set of plans (like this website: https://www.architecturaldesigns.com/) to working with an architect to design your dream home. Based on that your costs can vary dramatically. You could probably put together a modest 3 bed 3 bath for $400k in hard cost, exclusive of land, or spend $2m to have a starchitect make you something worthy of a Netflix show.
The basic outline is this:
1) Close on the land. 2) Figure out what you're legally allowed to build, ( 2a - change the zoning/get entitlements if you don't like the results from step 2). 3) work with architect/GC to develop/adapt plans to your site. 4) Get your permits. 5) Build! 6) Get final CO (I'm assuming SFH goes through a similar CO process? I just build multifamily). 7) Move in and realize everything you should have done differently. Just kidding, move in and enjoy your new home.
And despite being the shortest item on this list, number 5 is easily the hardest and where you will get tripped up and spend all your contingency money (hint: build a healthy contingency into your budget, it's still not going to be enough). Between unexpected changes, building conditions, material availability, labor availability, unscrupulous GCs, etc. you will have most of your headaches in Step 5 (unless you engage in Step 2a, that can be a nightmare, too). If you have the dough to spend you should focus on getting a good GC who won't cut corners and will guide you through the process. Also, I think you can get construction loans for a SFH build and then refi into a traditional 30 yr mortgage once it's completed so you aren't putting all the cash upfront, but I don't really know much about homebuilding to comment.
Building right now is a hassle, but maybe it's always a hassle, i'd say if you're going to be the project manager (or act like one) then it's not worth building. Unless this is your dream home and you can't find anything you want.
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