I am looking to purchase a lot in a subdivision that has about 12 houses built already and some of them are already sold. The developer apparently found a bigger project so he is selling lots that are still available and some of them were bought by owners who want to build their own houses. However, this will be my first new construction project so I am wondering if anyone has had experience previously with this kind of investment whether good or bad. My thought is that it will be a safer investment because there are new houses within the subdivision and the lots were approved to be built instead of me looking for an independent lot on a street and building a new house. Any feedback or advice would help tremendously. Thank you
@Syed Khan - Are you looking to become a builder? Not sure you are talking about building a spec home to sell or to rent out long term? You may like building in a subdivision because you will have less variables.
Safer is relative, a new development on the edge of nowhere vs the last vacant lot in a desirable and walk-able neighborhood wouldn't exactly compare. Make sure you account for sewer and water cap fees in your build cost projection unless you know they've been paid by the original developer. One key advantage I could see in a new neighborhood is simply the free exposure of buyers interested in the new subdivision especially if you can offer better finish or a more appealing design than the competition if it's all fairly cookie-cutter.
@Joanna Weber Yes my goal is to build and sell the house. The reason why I like the subdivision idea is because there are new houses that are being built currently so I will be competing with the new houses instead of building on a street with older homes and trying to sell the newest and the most expensive house on the street. Also, less variables is a good thing for me because this will be my first project.
If it's your first go on a new build, try and find a mentor or another active builder who can help you out, maybe in return for services and some good meals. So many things in new construction are regionally specific and there's a ton of room for subs to take advantage of newer builders when grey area scenarios arise. I did this when I got started and the value of my mentors counsel has been in the tens of thousands of dollars. Additionally, make sure you get a good lot to build on - hilly lots can make it more costly to build a good house and people love a flat driveway and little to no steps... good luck!
@Steven Clark and Ed O. thank you this was very helpful I am in the process of interviewing GC's. What do you guys suggest I look for before I decide on a good GC besides the past experience?
If I may ask a couple of questions.
1) How’d it go?
2) What do you think of purchasing a couple of those lots in a new construction neighborhood & holding long term. Good investment?