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Homeowner Forum / Construction / July 2008Want to become a residential home builder
Hi, I'm a contractor looking to become a small volume home builder in NY. I have a lot of good subcontractors, family looking to invest, a mortgage broker in the family, a bachelor's degree in accounting, and a willingness to educate myself as much as necessary. This is something I've wanted to do for years, but unforseen circumstances are pushing me to finally make the move. Where do I start? I haven't a clue and neither does anyone I know. The NAHB told me they only help builders, not people looking to become builders. Any recommended books, courses, associations, etc. would be greatly appreciated. Thank you. > Hi, > [quoted text clipped - 8 lines] > books, courses, associations, etc. would be greatly appreciated. > Thank you. Obviously you haven't read the news lately. Newsflash.... Housing market in the sh.tter!! It seems accounting would be a steadier source of income for now. OK so you want to be a homebuilder? You can read all the books and take all of the courses you want, but that don't guarantee much. There is a couple ways to do this. You can just build a house using your good subs, and try to sell it with the family mortgage broker. Oh, and learn at the expense of your family investors. Or you can start out flipping houses and learn how houses are built and how they shouldn't be built. And you can still put all those people to work. Yeah I'm busting your balls, but it's a tough industry and an even tougher market. > > Hi, > [quoted text clipped - 24 lines] > Yeah I'm busting your balls, but it's a tough industry and an even tougher > market. Hi, Your points are well taken. I figure now is the time to learn about it rather than start running around for information years from now when the housing market recovers. Flipping houses is definately the way I'm going to start. From what I've seen, whatever can't be flipped could always be rented out until better times. Thanks for your response. > Hi, > [quoted text clipped - 8 lines] > books, courses, associations, etc. would be greatly appreciated. > Thank you. What's the bottom line? You have to know the entire industry, the local codes, the nuances, in order to make a profit. And, you have to build what the buyer wants. Nobody is going to teach you all of that. And, if any accredited teaching facility did, they would cause you to sign something saying that current market and codes may not reflect their instruction or to that effect. I detect that you are trying to equate a college education with a joh or career, vs., an independent cnntractor competing in the marketplace. No such equation exists. You have to get your hands dirty and calloused. You have to put your money where your dreams are, or, build up to that point in business where you can make that gamble. You're not ready.  SignatureDave Speculation on a product or material that is an obvious need, is not speculation per se as there is no risk to the speculator. Common were those selling food and other supplies in the gold rush days. In this case, its oil and its everyone who bites the bullet. And most everyone has no gold to be made, just business as usual. >> I'm a contractor looking to become a small volume home builder in NY. >> I have a lot of good subcontractors, family looking to invest, I "watched" an "approved" general contractor build our house in a new subdivision in 1987. The developer was Genstar, a large corporation and they had allegedly done their background work in vetting their builders (5) in this new area.. The lot I picked had been assisgned to one of these 5 builders. That said, I watched foul up after foul up go on and delays, complete with excuses and excuses drag on. One of the final straws (out of about 30) was that the evening before all the flooring was due to go in, the house was still littered with a lot of construction debris..I contacted the flooring guys and was told that if the house wasn't cleaned up before they arrived in the AM, they'd just walk away. I went to the GCs home and he wasnt there and didnt answer his phone/pages. My wife and I cleaned a whole pickup load of trash out of the place late that nite so the flooring guys could get in in the AM. After that, I decided that if HE was a qualified GC, well then I WAS a qualified GC also. The punch list (and my $ 8000 holdback)endured for over 5 months with out even one visit from the 5 subs that were "supposed to" come back. My wife and I decided to do all the work ourselves and got it done spending about half the holdback $$. The rest we spent an a trip to Hawaii- the builder never got any. In 1998, we bought an acre lot near Tucson AZ. Friends ( a drywall contractor) were building in the same neighborhood. He knew a lot of subs personally and they were going to do the various trades in his home while he did a lot of the work. I was very familiar with woodworking and w/w tools and had "the time" because I had just retired. My wife found an great plan online: http://www.jpelaarchitect.com/plans/plan2366.htm We had the plan "expanded" to 2744 SF by the architect, I got 5 copies of the plan, booked all the neighbors subs & went downtown and applied for the permits. Once they were Ok'd, I got the excavators in and away we went clearing the lot etc. That was in Feb 98. We got our "final" and moved in Oct 7th. I still had to build all the cabinets and do the exterior concrete steps/landscaping but I had the time. We finished it over the next couple of years. All the subs and builder folk we got to know came by over time and remarked what a great job we had done on the house...friends expressed envy.. We were proud of the job we had done ( I built & installed all the cabinets, did the plumbing installation for kitchen and 2.5 baths, framed all the interior walls closets, ceiling drops ( a BIG round one for the 23' diameter Circular great room). We were "all in" with many custom southwest features such as granite 4' X 8' Island with vegetable sink and BI KitchenAid gas cooktop, K/A BI wall oven and micro combo,K/A trash compactor, BI Sub Zero fridge, built in 8 ft Curved floor to ceiling (10 ft tall) entertainment center, 36" direct vent gas F/P, 1300 sf of nice ceramic 13" floor tile with matching tile baseboards, 6' soaker tub, 4'X4" walk in "snail shower, 12.5/11 and 10' ceilings, double entry brushed cedar 8 foot doors and attached 1400 sf 3.5 car garage with covered 34 foot RV port on a nicely landscaped acre with dramatic mountain views. We also went beyond code with all the insulation and had the lowest heating and cooling costs (by over $ 100 per month) in the neighborhood. All this was accomplished with a LOT of our own work for $ 72.00 SF "All IN" (but that was 10 years ago) So, it CAN BE DONE, a newbie can be their own GC and do a good job (although many here will say theODDS are against it) We have sold (made a nice profit) and moved to another lakeview home we had built to lockup stage, we contracted and did the rest on this one too and paid about HALF of what the current assessed value is, so IMO, if you think you can be a home builder and have the subs and the $$ and are willing to take a chance on yourself, go buy a lot, get a good plan and go at it, and TRY ONE first. If that works out, I guess you could say you're a "residential home builder" Many small builders do that around here and once the home is finished, they sell their existing home and move-in, keeping it for 2 years (due to tax considerations..No Capital gains if they live in for 2 yrs). Then they build another and sell that one etc etc. I've since turned 60 so I don't think I'll do anymore homes..just bought a nice boat..the lake out there beckons so I'll leave the building to you.. Good luck..work hard R nntractor competing in the marketplace. No > such equation exists. You have to get your hands dirty and calloused. > You have to put your money where your dreams are, or, build up to that > point in business where you can make that gamble. You're not ready. > > Hi, > [quoted text clipped - 32 lines] > bites the bullet. �And most everyone has no gold > to be made, just business as usual. If you read my post, I'm not only college educated, I'm a successful contractor. My hands have been dirty and calloused for years. Nobody can tell me education doesn't help. Sure, it's not the bottom line in construction, but it certainly helps. I've done many successful renovations with a book in one hand and a hammer in the other. I also have the ability to learn anything I want to learn. I've taken many gambles in life with mixed results, but the bottom line is I'm a success by most people's standards and looking to take my life to the next level. Your statement that I'm not ready is somewhat troubling. If I was ready to build houses, I wouldn't be wasting my time in this forum. I'd be, uh, building houses. I know what the buyer wants because I would be building in my own city. I don't need to memorize the laws because I have lawyer in the family who would also be an investor. If your comments were helpful, I'd say "thank you". If they were annoying, I'd say "f*** you". But since they are just plain useless, I'll just ignore you. . . >> > I'm a contractor looking to become a small volume home builder in NY. Here (Calgary), a couple ( teachers) built a home for themselves during winter and summer breaks, then sold it when they discovered what the market was willing to pay and built another. Today, they build a thousand homes a year. I can think of half a dozen examples of small volume and custom builders who started more or less that way. So, yes it can be done. The question is not whether you *can* do it; the question is whether you *will*. Do you have the balls to start? Do you have the discipline and, determination to see it through? Can you attract loyalty and strong performance from subs? Are you pragmatic enough to forecast the economics of a project and to stick to the budget? If you're looking for a course or formula ... there isn't one. And no one is going to hold your hand. Just do it ... hire a lead hand who can fill in the knowledge gaps and supply contacts you're missing. You already have contracting experience, you can read and write, and you have access to capital. This is a "get rich SLOW' proposition. At best, you'll break even or lose only a few bucks on your first project(s), but by the time you are in three years, you'll either have a base or be ready to quit. Here, and I suspect most places, there are only a few entry points. Large developers are interested mainly in builders who can put up a couple of show homes and commit to a good number of lots. The smaller volume builders get in by taking left overs and don't really wants. (In a declining market, bigger builders might be happy to turn a few lots loose.) Another entry is to buy inner city homes in emerging trendy neighbourhoods, bulldoze them down and put up a McMansion or a duplex . An obvious but more difficult to find opening would be to find a land owner just outside the city whose property can be subdivided. Work with him/her . Here, the market is declining following two years of insane run ups in prices. Means there are opportunities from speculators who bit off more than they can chew. Also means you need a very sharp pencil. In response to another post, you said that if you were ready to build, you'd be building, not dicking around in a news group. My point is just that you are *never* ready, if you wait till you are, you'll never start. Ken Well they say "Build a better mouse trap and the world will beat a path to your door"... I think the key these days is energy saving living. I'm reading about people in your area who may be forced to move south due to the high cost of heating this winter. I think they would prefer to stay in the area where all their friends/family are. If you could figure out a way to build a house and sell it for less than others AND design it so it uses very little energy to heat, then I would think you could do quite well. Another thing is people with a bit of money who are suddenly facing outrageous energy bills. They are suddenly wondering what to do about this and don't know where to start. The answer is many things... Energy Star windows, sealing air leaks, additional insulation, new Energy Star appliances, solar water heater, new energy efficient furnace, etc. Perhaps you could offer a "package deal" to do everything needed. And people with less money who last year closed off their upstairs due to high energy costs. This winter they will be moving into one room and will want that one room super insulated for a low cost. Also they don't want the pipes to freeze in the rest of the house. Can just the pipes be warmed without heating the entire house? Other people will be combining families to economize. Move two families into one house and share the energy bill. They will want to "winterize" the unused house. I think you will be able to find plenty of work in this area. Bill has hit the sweet spot. I have been in the modular industry for years, just getting out recently to the railroad. Good move at this point. Homes will still sell, and GC's will still be booked solid, if they fill a needed niche market. Find the niche, or create it, and go all out. Right now, energy star type homes (actually super energy LEED type) are a place to go, or fortified homes, a long vacant niche just waiting for innovation. Build a house to 150 mph standards, build a soundproof house, a bullet resistant house, NOW you have a niche. And while the business may start slow at first, it WILL grow rapidly. Just think of all those people who are afraid to go to sleep after the super-tuesday tornadoes that killed over 100 people in 3 states. I know it is NY, but I live here too, and we have had at least one tornado in the vicinity every year since 2000! Find the need and fill it, THATS what business is all about. BTW - If you do the Energy Saving thing, there are all sorts of energy related grants, low interest loans, and tax credits out there from the state, federal government, and utilities. Might want to do all the paperwork for customers or make it easy for them to submit the various forms. > I'm a contractor looking to become a small volume home builder in NY. > I have a lot of good subcontractors, family looking to invest, a [quoted text clipped - 6 lines] > books, courses, associations, etc. would be greatly appreciated. > Thank you. You have financial backing, mortgage savvy, accounting knowledge, you're willing to spend time and money to educate yourself and you've worked as a contractor. You already have all of the basic ingredients except sales. I also live in NY and the market for new home building has taken a bit of a chill. There are opportunities, but you may find that something with less risk, like doing a serious flip (not a coat of paint and some shrubbery flip) would be the best way to get your feet wet. Most people hiring a builder to build their house want to see some finished products before they sign. You need to be able to point to what you have done rather than what you could do. Join a trade association such as the NAHB - you don't have to be a builder to join - and you'll get access to people and programs that will help you learn from their experience. R > > I'm a contractor looking to become a small volume home builder in NY. > > I have a lot of good subcontractors, family looking to invest, a [quoted text clipped - 25 lines] > > R Thank you all for some good advice. I will definately start out with as many flips as it takes to feel comfortable before making the big move. Awesome house plan there Rudy... thanks a tonne for sharing.. ______________________ Design Your Dream Log Hom Posted from the Free Home Improvement Forum at http://www.spicyhome.com |
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