Advise About Knocking Down a Rehab and Building New near DFW

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Advise About Knocking Down a Rehab and Building New near DFW

Nathan Veech
Member since 2019 · 10 posts · 1 vote

I am living in Watauga Texas (near Fort Worth) in a 2 bedroom, 1 bath rehab. 1960s home, everything has to be redone. Foundation has to be leveled, sub-floor needs replacing, walls need to be redone, roof needs to be replaced (including rafters to bring them to code), all windows need replacing (16 windows), kitchen needs to be finished. In other words the whole house needs to be re-done. The reason I bought the house was that it was in my budget and it came with an empty lot. I thought I could rehab the house myself slowly over time (which I am in the process of doing). Then I was going to eventually house hack until I could build something on the empty lot. Most people told me I should just knock the house down, but I couldn't afford that kind of thing myself. Enter my investor friend.

I have a friend that want to get me out of a rehab and into some cash flows, and he currently has some cash that he needs to invest in real estate. He likes the property and location, and told me that he would front the cash to knock down the existing property and build 2 new homes (3 bedroom 2 bathroom ideally) on the then vacant lots. Then we get renters in one and house hack the other one.

He told me he wants me to look into how much it would cost to build 2 new homes on the land and what kind of options we have in terms of size houses, and cost to build and then when we have that we could start talking about making it happen. This seems like a no-brainer to me, this would put me 5 years ahead of my plan, and get me into a finished house with some cash flows to pay down my mortgage, and gets me an opportunity to have a future investor.

 I am looking for some advice on what I can do to explore the options available, where I could get cost estimates for building new homes in Watauga (near Fort Worth). If you know any builders or general contractors that I could talk to, or where I could find premade plans homes, or any advice that you think could help I am all ears. I am looking to get the ball rolling as soon as possible the longer I wait the more this could potentially cost, and if I don't get started and finished before winter I may have to wait until spring.

Thanks so much,

Nate

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  • George W.
    Investor · NJ · Member since 2018 · 869 posts · 921 votes
    6y

    I wouldn't knock down a half way finished house. Just finish it and move on. If you tear it down you're gonna need architect, permits and deal with the subdivision of the lot. What happens when you knock it down get all the plans approved and your buddy decides he doesn't want to find it anymore and backs out? 

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  • Emilio Ramirez
    Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
    6y

    Definitely sounds like a tear down. How much work have you done and how much invested?

    Drive around the neighborhood. Do you see any new construction? If you do that's a good sign. Stop on site and ask for the GC or Builder. 

    Know any realtors - ask them

    Have any friends - ask them 

    Have any coworkers - ask them

    Is there a local real estate meetup? Go there and ask them

    That being said... you will need to be able to sort out the folks who are trying to help from those who think they're experts from those who might be. 

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  • Nathan Veech
    OP
    Member since 2019 · 10 posts · 1 vote
    6y

    @Emilio Ramirez Thanks for the feedback. I have replaced the sub-floor on half of the house and put up some tile in the bath/shower so I have a place to live/sleep while I work on the other side of the house. Most of the newer construction in the area was done about 10-15 years ago. I will ask around tho, thanks

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  • Emilio Ramirez
    Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
    6y

    @Nathan Veech Hey Nathan. Are the lots already split? If so, then you could potentially build one sfh on the vacant lot while living in the fixer. After the first home is finished you could move in, do your house hack and tear down the fixer and build the next one. That would help with your living costs, if that is your goal. If the current house is in the middle of the property and it needs to be torn down before splitting the lots then you will have to move else where while the lot split is happening. Need to get a handle on construction costs. Any luck finding a GC?

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  • Nathan Veech
    OP
    Member since 2019 · 10 posts · 1 vote
    6y

    @Emilio Ramirez The lots are split, but unfortunately the lots are bisecting the house, so either I would have to get the subdivision redone so it is next to the house, or I would have to remove the house and rebuild on the either side. I was originally planning on living in and renovating the current house, and then once I had enough funding I would build on the second lot. I was talking to my investor friend, who I recently found out already has a portfolio of somewhere over 30 homes, that we could even potentially build a couple of duplexes if I was planning on tearing down the current house.


    I am still looking for a GC, I have asked around at work and looked up a few online to start getting quotes. I understand that the cost of building may be on the way down, so I am tempted to wait a few months to see which way the market goes.

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