Any real estate developers?

[B.Mac]

I'm toying w/ purchasing a lot and building new for resale........anybody got any resources on how not to shoot yourself in the foot?
B.MAC:D

[nyseguy]

Pick the brains of a few successful contractors in the area you plan to build to establish a square footage price including foundation. You can spec build here on Long Island for anywhere between $125 - $400+ a square foot- depending on the area. Talking to experience will help formulate a budget.

You want to make sure that your cost to build does not exceed the current market value minus 30%- god for bid the market turns quickly you want to ensure you will at least break even. (It sounds silly but I have seen it happen, read below.) That's at least the formula I have used and it seems to work.

Keep your money in your pocket. Feel out some sources for private equity funding. Borrow money at 1% simple interest per month and place the lenders as note holders. Believe me- there are people bored with the stock market who are looking for some alternative investments, and they feel involved too. Cash talks alot more than bank loans...find it- it's out there.

Finally- study the area you intend to build. Do not overbuild with the hopes of a higher profit and DO NOT LET YOUR EGO GET IN THE WAY. Build what the potential homeowner will want- not what you want. Remember- fall in love with the investment and not the project.

With that said I have a good friend who had to "get in" on the real estate market because it was so hot up here and the money was too easy. Well he overpaid for a lot with a house on it in an ok area...went 40% overbudget taking 9 months longer than anticipated, and now the market has softened around him. After trying to sell on his own he is on his third real estate agent and the sights look dim. He WILL lose money, not to mention it is costing him major dollars every month it's not sold. My dad always said the first time is a learning experience- the second time it's a mistake!!!

But I have to admit when your at closing knowing you did your homeowrk and am now getting paid- it's a great feeling!!!

Good luck...Bob

[mr.clean]

best advice, DON'T DO IT!!!
material
insurance
labor
permits
incidentals
bribes
EPA
DEC
city
state
fed
the system is set up for the big boys.your money is better spent in the bank!

[The Big Al]

best advice, DON'T DO IT!!!
material
insurance
labor
permits
incidentals
bribes
EPA
DEC
city
state
fed
the system is set up for the big boys.your money is better spent in the bank!

No BS with that staement!

DHEC cost me my dream home!!!!! Purchsed the home of my dreams.
Had to seel because EPA said I need a seawall! I it was going to cost over 80 grand. We were already taped to the limit!

[Trikki1010]

B.Mac

NYSE guy gave ya some really good advise. Because of the low interest rates, a lot of people up this way pulled their money out of their homes, some invested, some spent. I'm buying back the ones that spent now. Our market is going really soft and appraisels aren't what they were 6-9 months ago. Good for buyers not sellers.

If your really are dedicated to this,

Check with local realtors to get comps on a target house, trying to hit a style, size, price range that is not overloaded. This way you will get more viewings on the home and potentially a faster sale.

As a word of caution, the market up here is saturated with new homes This year housing starts are DOWN 50% because of the overloaded inventory. Make sure this isn't the case in the area you want to build.

Check the local building department after you have narrowed down your field. They will give you some real time info on the local market and provide you insight into what you are up against locally.

BMac, I know ya want to build for recovering drug addicts, be CAREFUL. Not always the jewel of the community. This may be your biggest liability before you start...

How are you financing this ?? Carrying costs hurt more projects as most people don't calculate accurately. Construction Loan ?? Be careful, by the time you get approval for payments, the subs are ready to walk off the job. Be prepared to carry 30-60 days in your pocket. I carry a lot of hard money loans due to short term, I have control of the money, plus they can structure them interest only for 12-18 mos, in which time you better be building your arse off:eek:

Is the home to be sold ??
List it as soon as you get the permits
Prime, but don't paint or place carpet until you sign a contract = <5k out of pocket, plus buyer can pick their style from your allowances;)
Issue contracts to all subs.
Schedule project with all subs present
Keep the boys on schedule
Less time = more $$$$

Finally

a FAST NICKEL is better than a SLOW DIME

Just me .02

[mike woolf]

No BS with that staement!

DHEC cost me my dream home!!!!! Purchsed the home of my dreams.
Had to seel because EPA said I need a seawall! I it was going to cost over 80 grand. We were already taped to the limit!nice house did the insurance company tell you you have to have flood insurance , huracane insurance ,along with you regular insurance???

[Ziemer]

One thing you need to figure out, is if you're going to build it, or are you going to hire a builder. You may save a few bucks by doing it yourself, however, it can be much more difficult to get reliable subs. Good subs tend to cater to their larger customers.

Also, if you decide to build it yourself be sure to include all of the initial fees, i.e. permit fees, impact fees, water/sewer fees, etc. In a lot of the counties now in FL, you're looking at $15,000 + before you even clear the land.

Since you're already a FL resident, and have done some remodeling, you're probably aware of most of the wind load codes and such. The new FL Bldg Code went into effect Oct. 05. Also, depending on where you're looking in Jax, you could be in a wind borne debris zone which can dramatically impact a budget.

If this is your time first building a house from the ground up it may be wise to use a builder to help learn the ropes. Then on the second or third try to do it yourself. Trikki and nyse make a lot of good points also.

Good luck.

(If you get a little further into a project and you have any specific code questions feel free to PM me. I've been doing commercial and residential design work, for about 7 years now in FL ;) )

[The Big Al]

nice house did the insurance company tell you you have to have flood insurance , huracane insurance ,along with you regular insurance???

No problem with insurance, hell it was 55ft above water line.

143 steps to the dock!

Down, no problem, up was a killer!