All Forum Posts by: Dwayne Jones

Alexander Price: the cost of construction is approximately $68 per sq. ft. I'm targeting elderly, single college grads, singles looking to own with no children or one or two at the most. I'm building one and two bedrooms to keep the cost low. I've purchased most of my lots from private owners and the county land bank from $100 - $2,500. The lots already have utilities because a home was previously on the lots. The lot and infrastructure savings are $16k-$20k.

Thanks Teri S.  A lot you have stated are great ideas and in the plan. Putting more than one detached unit requires a zoning variance in Memphis as well as a planned community. Working on ordinance and code changes but the political process is slow. Again. Thanks for the feedback.

I'm a general contractor and real estate investor seeking to develop a new market for affordable homes and rentals. I have two drawbacks that have hindered the process. A little background, I built the first microhome village in Nashville on trailers at Green Street Church called the Sanctuary. These were 60 sq. ft. units for the homeless. I also built a 832 sq. ft. cottage with 2 bd/ 1 bath in Memphis. Ive built homes, renovated and rehabbed, lifht commercial, mission work in Ghana, Togo, India, and Haiti building clinics, schools, and churches. Looking at the large number of vacant lots in Memphis I've come up with a one bedroom 360 sq. ft (28k) and 648 (45k) two bedroom plans. There are individuals interested in purchasing but I'm having problems with comps. There aren't any new construction projects nearby and definitely not less than 1,000 sq. ft. Also, most lenders won't finance (end buyer mortgage) projects less than 50k. Any thoughts or suggestions? 

PS: I tried to build a tiny village in Memphis but zoning requirements prohibited building. So the 360 sq. ft. homes are on slab and conventional systems and code compliant unlike some tiny projects.

 Thank you very much for your kind words.

 Jay, there are many reasons and scenarios behind my reasoning. First, I built the home I posted from cash out of pocket. I own the home outright with no mortgage or construction loan. Moving forward I understand I can only build so many without a construction loan. The construction loan will be 80% of the appraised value or contract amount. The communities I'm targeting are inner city areas where the City of Memphis has torn down hundreds of homes in the inner city as well as housing projects. Organizations like habitat build a few homes and investors try to buy homes for buy and hold and sometimes flip. In an effort to rebuild communities and make a modest amount of cash I have decided to buy the vacant lots for $2,000 or less because most have the infrastructure ie water, electric, gas, and curb cut existing thus saving minimum $14k in development cost while purchasing the lots from the county land bank saves a minimum $8k.  Moving forward this allows me to build homes and past on some savings in liieu of being greedy. Also, most of these neighborhoods have not had new construction in at least 20 years. With homes and apartments being removed via Brownsfield grants to the city people have to live somewhere. I have a decent product at an affordable cost but getting comps initially was a problem. Appraisers didn't want to give a value to new construction because there wasn't any for an extended period of time and there are some foreclosures at very cheap prices. In order to build the community I need to build new homes and encourage ownership instead of a community full of renters. So to answer your question, the communities are mostly inner city working class but not gang infested blighted areas. There is a local credit union partnering but they are pretty slow about getting buyers qualified. I know the homes are below market value and  if located in another area would sell for $90k-$110K. I got a $81k appraisal for the house I have listed for $67,500. I can sell many houses at my price opposed to the appraised value. I'm encouraging 15 year mortgages when possible. I have an agreement with Home Depot and I can purchase a mojority of my products anywhere in the country at a local Hoem Depot for the same price. I need owner financing as an option when I move into new areas and I need to the ability to create fair market sales/comps from my own sales. There are a lot of other variables such as building a energy efficient home (with solar),  home gardens, access to the internet, and cycling just to name a few. I do like to make money and I plan to but maybe not as much as other investors/builders. Thanks for your questions.

Yes, I would like to have someone directly create a new loan but my concern comes from experience without being in the loop and others guiding my customers to other properties. I understand the note would be discounted but without seasoning I'm curious of the amount because of new construction.

 Thanks. A few months ago I partnered with a college friend to build microhomes for the homeless. To my surprise the project received publicity in the Nashville Tennessean and USA Today. I've been getting many calls about purchasing microhomes or tiny homes on wheels or trailers. Do you know of anyone interested in financing tiny homes prices from $20k to $50k 

http://www.usatoday.com/story/news/humankind/2015/08/27/humankind-tiny-houses/32412457/ 

 Sell to investors/owner occupants.

I have a model completed and listed with an agent. The agent has not delivered and I plan to take over future sales effective in December 2015. 

http://m.realtor.com/#details?property_id=88371199...