Seattle, WA · Member since 2016 · 8 posts · 1 vote
I’m getting ready to look for my new primary residence in the Seattle area but want to avoid all the bidding wars and am fine waiting for a while.
Would it be feasible to secure land that can accommodate at least 2 homes. Once built use one home to live in and sell the other(s) to supplement the cost of the primary home?
Are the any Seattle/Renton realtors or contractors companies that specialize in this type of strategy?
Anything you build you'll likely be upside down on when the project is completed. You wouldn't be able to build 2 homes, sell one and pay for everything you spent to build two homes. Professional builders have a profit margin of 10%. You will not fare as well as them because everyone is going to charge you first time customer prices.
@Melanie P. Thanks for the insight! So I know selling one of the two houses wouldn’t cover all the cost but given that I plan to live in one of the houses and take a conventional loan out on it when it’s done. In the end do you think this be more cost effective than going the normal route and purchasing one home to live in on the market now.
Hoping there would be some profits from selling one of the houses that would take down the cost of living in the other. Also would hope interest rates may be better by the time everything would be complete.
I think that you would learn a lot and wouldn't get hurt too badly, but I do not think you'd wind up in a financially advantageous position to buying an existing home. The only exception i see to this is if building would allow you to have your dream home somewhere outside the city where the land is cheaper. Then perhaps it's a worthwhile pursuit. But learning everything "on the job" is going to be a rough and costly ride. Splitting a single parcel post construction may also prove a challenge depending on zoning.
Keep in mind while successful builders maintain a profit margin around 10%, 83% of builders fail. And they're starting with a lot of construction industry experience, most of the time.
I'm not saying it can't be done; just be prepared and financially able to put in more than you expect to on day one.
@Melanie P. Thank you I really appreciate the knowledge.
So far I’ve been trying to find plans/parcels that are already divided and have plans ready to go that are shovel ready or almost there. But then again if they are being sold they must not be that great of an opportunity haha.