Any good books / reading info on tear downs and building single family homes from scratch?

15 Replies

Hello

I've seen many books on buy and hold, buy and rehab.  When I search for building a new home I get a lot of books on how to physically build a new home (framing, electrical etc).  Not exactly what I'm looking for.

Can anyone recommend any good reading material on how to buy an old home for the purpose of demolishing it and building a new one from scratch?  (ie hiring a builder to do the work).

Thanks

Miz

@Manish A.  I can tell you the hardest part is traversing the bureaucracy...   :)

@J Scott

I look forward to your book! When do you expect it will be released?

Thanks, I do have a couple of questions for you regarding contruction of a new home:

1) In a selected target neighborhood, when analyzing previous new home builds within say last 1-2 yrs, what exact data (from MLS or other) would you look at?

2) When selecting a particular lot, which member on your team would you suggest should be used to research and provide information on zoning requirements, maximum build capabilities, etc? Real estate agent? Architect? Civil engineer? Other?

Thanks!

Originally posted by @Manish A. :

@J Scott

I look forward to your book! When do you expect it will be released?

Thanks, I do have a couple of questions for you regarding contruction of a new home:

1) In a selected target neighborhood, when analyzing previous new home builds within say last 1-2 yrs, what exact data (from MLS or other) would you look at?

2) When selecting a particular lot, which member on your team would you suggest should be used to research and provide information on zoning requirements, maximum build capabilities, etc? Real estate agent? Architect? Civil engineer? Other?

Thanks!

 Hey Manish -

1.  Square footage, number of rooms (beds/baths), finish level and configuration of the lot are the big things I look for.  If the homes are similar sized, with similar finish and similar lot configuration, new home values will tend to be pretty clustered.  This is even more true for new homes than for rehabs, in my experience.

2.  This is legwork I will typically do myself, as it's so crucial to ensuring that what is planned will be approved.  Get to know your city planning and zoning people -- it will help you tremendously down the road when you're doing research and are looking for creative solutions to problems you'll identify.

@J Scott

Thanks!  When will your book be out?

1) When you say configuration of lot - can you clarify what configurations do you consider advantageous?

2) How does one determine the finish level of sold homes - is this info available on the MLS?

3) Got it.  Hypothetically if we were to have someone do the legwork for us (zoning, set back info, etc), who would recommend do it? (agent, architect, civil engineer, etc).  Or any/all of the above?

Miz

Originally posted by @Manish A. :

@J Scott

Thanks!  When will your book be out?

1) When you say configuration of lot - can you clarify what configurations do you consider advantageous?

2) How does one determine the finish level of sold homes - is this info available on the MLS?

3) Got it.  Hypothetically if we were to have someone do the legwork for us (zoning, set back info, etc), who would recommend do it? (agent, architect, civil engineer, etc).  Or any/all of the above?

Miz

We don't have a release date for book (I have a partner I'm working with)...it's actually 2 books on different aspects of the subject...I can't seem to just write one at a time...  :-)

1.  For this, I just mean that if your comps are 1/2 acre lots sitting on side streets with flat back yards, you want to ensure that your house isn't a 1/4 acre lot sitting on a main street with a sloped back yard.  New construction comps tend to be pretty forgiving (unlike rehab comps), but you still want to get as close to apples-to-apples as possible.

2. Walk through listed houses or look at pictures of sold houses on the MLS.

3.  Typically, I trust my civil engineer to do this investigation.  They're responsible for the site plan, so they need this information anyway.

@ Manish The best book out there is experience. All architects, engineers, construction managers go to college for 4-5 years and are not able to run a project when they get out of school! It takes a couple years of mentoring to understand the process. I would recommend shadowing a G.C. or architect from the start to finish of a project. I work primary in large scale commercial so it takes a lot longer. My last project that I just finished up in Baltimore County took 8 years to finish because of the scale and complexity of the project. A SFH should be a quicker learning process (about a year).

I also agree J Scott's blog is a good place to start because it explains all the steps. One of the hardest things for a new architect, engineer, builder, etc.... is to understand the process (or steps). You really need to think ahead so that you have all your trades lined up. If not it will take you longer to build a project. For example, you won't have your concrete, cabinets, tile, etc ordered in time to be installed. Or one trade will be waiting around for the other trade to finish.  A lot of people think you can just run down to Home Depot for all your materials and get them in one day. Many materials are manufactured on demand. So you should spec products that have a quick led time (ship time).

To respond to your three questions:

1Q. When you say configuration of lot - can you clarify what configurations do you consider advantageous?

1A. Configuration is how the house will fit on the site. I.E. the placement of the garage, entry, roof line, etc. I would recommend driving around the neighborhood and take photos of new homes you like with a similar lot.  You'll notice a couple patterns of the site layouts. Also a architect will give you a couple site options when laying out the house. I've seen some really bad site configurations because the developer does not place the home to fit a site.

2Q. How does one determine the finish level of sold homes - is this info available on the MLS?

2A. You'll need to look at your competition. You can look at photos on the MLS. Or better yet tour spec homes in your area. You'll see they all look the same! lol :) Tan siding, small piece of stone or brick and a two car garage that takes over the design of the house. :)

3Q.  Got it. Hypothetically if we were to have someone do the legwork for us (zoning, set back info, etc), who would recommend do it? (agent, architect, civil engineer, etc). Or any/all of the above?

3A. All of the zoning, setback, requirements, etc.. you can get from a architect or civil engineer. But you can side track the architect or civil engineer by hiring a survey company directly and have this shown on the survey plot. This is what a architect or civil engineer will do so you can cut out the middle man. As for the building code requirements you'll need a licensed architect or engineer to stamp the dwgs. I would recommend for your first spec home that you work with a modular builder. They will manage a lot of the process and make it easier to manage. You'll pay a little more, but it will reduce your risk significantly.

Good luck with your project! Feel free to IM me or call me if you have any more questions.

@Manish A.  

 You've already been given some good starting points by other posters. I'd just add that it's always a balancing act. Here are a few things to consider

When looking at lots:

  • What is the cost of the lot?
  • How much space can you build on the lot? 
  • Is the lot flat and usable? (no drainage issues, etc.)  If not, what are the costs going to be to get it to being buildable? 
  • How much building can you put on the lot?
  • Are there utilities available to hook up to that are close by? 
  • What is the typical size home in the neighborhood? 
  • Are there other new homes nearby? If so, are they selling? What are their sizes, finishes, etc., and price? 
  • If the lot is in an older established neighborhood with smaller homes, etc. is there a demand for larger new homes?

When looking at new construction vs. fix/flip:

  • What is the local market like? (Is it a tight market with few listings, or is there an abundance of homes for sale? 
  • What is the rental market like? 
  • Are rentals commanding top dollar or priced low? 

These are just a few of the things we look at when making a decision on whether or not to build in an area. Good luck! 

@Karen Margrave  

@Mark Sidorczuk  

@J Scott 

Thanks for all your comments, they are very insightful!

One more thought - is there anything wrong with the following logic?

In a hot neighborhood, isn't it safe to assume that the listing agent would have presented any new home for sale to all the builders before listing the home on MLS, so he/she could 1) sell quickly 2) avoid having to split the commission with the buyers agent?

If so, then one would conclude any house that actually hits MLS has already been declined buy local builders, therefore any listing on MLS is probably not a good buy as a tear down?

Miz

@J Scott

What's the status on your book?

Miz

There is no book that can teach you how to do a tear down and new construction - you need experience - I consider it equivalent to buying a book on building a car from scratch but with a home you have to deal with people and subcontractors and you need to understand the business from writing a proper scope of work, contract terms etc. to knowing what things cost so if you have allowances to understand if they are or are not realistic.
Originally posted by @Manish A. :

@J Scott

What's the status on your book?

Unfortunately, I have another book I'm working on before those, and I haven't been making as much progress on the other book as I was hoping anyway...

While Chris' point above is reasonable (a book won't teach you everything you need to know), the general methodology can be learned from reading about new construction projects.  Take a look at the New Construction Diary that I put together a couple years ago about my first flip (with Todd Whiddon) and feel free to take a look at www.TheScottPad.com for another new construction case study.

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