Building a house from scratch

[Wenhao Leu]

Hello all! Just an RE investing newbie here! I live in the bay area, where it costs extremely high to purchase a home. I do have some savings and i was thinking of purchasing a piece of land (~$400k) and build a house (3 bedroom 2 bath at ~$300k). I of course can be off on the estimate of building the house. Is this a good idea? Would the permitting take forever?

[Steve Johnson]

I have no experience in your market, but...a word of caution:

If you don't have construction project management experience, you WILL be raked over the coals by sub contractors.  Either up front in price, during the project in them flaking due to you not having a good rolodex, or in scheduling issues, and then on the backend when you inevitably go over budget and over completion date.   

    I have seen many people lose everything trying to do this, so back to that word of caution.  Get a reputable home builder to GC the project for you.   The 10-20% extra in $$$ it will cost on the front will save your time, money, and heartache in the end.   Time is money, as I'm sure you know.    Proper planning will save countless dollars.  Don't skimp on your architect, and don't skimp on your General Contractor.

Enjoy!  There's not much better than getting to realize your true dream home.