Rehab vs New Construction
Hello All,
I apologize if this topic has been discussed in detail elsewhere, I was unable to find it if it has.
I'm writing because I was presented an opportunity to purchase an empty lot in a very desirable part of town at what seems like a fair price. To this point my experience is with rehabbing and wholesaling homes, not new construction.
In your experience, what have you found to be the biggest difference when building new vs rehabbing a home? The obvious things --foundation,utility hookups from the street, different permitting I know to expect. Really I'm just trying to get a grasp on what the hidden costs/barriers to entry are and how I can compare new build cost to rehab cost.
For example - say it costs me $27 a square foot to renovate a home. Does that go up significantly to build new? What kind of timelines/delays should I expect to build a 1800-2000 sqft home?
What kind of licensing/experience should my contractor have for this job? The guy I use now is a class A contractor but hasn't done new builds.
Lastly, how do you all evaluate the land/lots? Is there a divisor - if ARV is X, I should purchase the lot for no more than Y?
Thanks in advance for the feedback