Building my first spec home!
Well, here goes nothing. This has been a LONG time coming.
I have wanted to get into flipping houses and building houses since I was a little kid. I helped an Invester from the age 14-19. He flipped houses, built apartment complexes etc....so that's where me wanting to do all of this comes from.
Rather than flip houses I'm going straight to building a new home from the ground up. I am beyond nervous. But unless you take a chance you'll never know.
Some basics on the home. It will be a single-story ranch with a full semi-finished basement. 9' walls. Laminate flooring in main areas with carpet in the bedrooms. 4 bedroom, 2 full baths, and the basement will have a full bath roughed in as well as a wet bar rough in. 1 egress window in the basement for a future bedroom. I will frame the future bedroom, but not finish it.
Vinyl siding with partial stone across the front. Oversized 3 car garage. 2182 square foot total.
I came up with $385,000 to build for material/labor. It appraised for $519,000. I will be listing for $495,900.
I'm building in a brand-new subdivision. Of course, the subdivision is surrounded by other subdivisions that are full of homes. There's one home that's already built and sold. It sold for $440,000 5 months ago. Its about 900 square foot smaller than the one I'm building.
There's another one that's almost finished. It's still for sale. That guy started his build 6 months ago and has had it listed since day one. They are just waiting for a few odds and ends, but it'll be done in a week or two.
What makes me nervous is his hasn't sold yet for the $495,900 price. It is basically the same house I'm building. Just different colors etc....He initially listed his for $505,000.
There are comps in the area that justify the 495-500K.
I plan to do some of the work myself. I plan to prime the whole house and then have a painter come in and paint. I will prime/paint the garage myself. I will do some of the flooring myself, set the cabinets myself, and do some other odds and ends. So that 385K should drop down to the 370's all said and done. Again, these are all rough numbers. We all know how things can change.
The bank set me in at 7.1% interest (construction loan short term)
This will be a side hustle for me. I have a full time w2 job. (I ended up getting my real estate license last year as a side hustle too) because I was dead set on flipping/building homes. I want to save a little $ by not having to pay an agent over 25K in commission for a project like this. I'll be offering a 3% commission for an agent to bring me a buyer for this build. At the end of the day, it will probably take about 5-6 months to build it start to finish. I hope it is sold before its done. That's of course the goal. Worse case if it is done/sold within 8-9 months and I profit $15-20K I'll be happy with my first big project. The end goal is to make $30K all said and done off new home builds and subbing 90% of the work out. Builders in my area have told me that's generally what you can swing. At times you can profit $40-50K. It just depends. Those profit numbers are after all expenses are paid.
I will post pictures as the build comes along. The basement will be getting dug next week. So, if you're interested, please follow along! I will post pictures, numbers, and anything else one may want to know from start to finish. I have read so many books, read so many posts on here, and have listened to so many podcasts. I am so excited to do this, but I don't think I've ever been so nervous!
To the ones who build/have built spec homes I'd love to hear your stories and advice.