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How do you go about and build your own dream home? Buy a property. Tear it down. Get a contractor. Get a construction loan. After it’s done, then convert th

How do you go about and build your own dream home? Buy a property. Tear it down. Get a contractor. Get a construction loan. After it’s done, then convert that to a normal mortgage. Can anyone share their experiences in going this route?

throwaway0a5e 6y ago
Your question is so general that I'm inclined to say that you need to do more research and refine it more. If you're asking what you're asking you're not yet qualified to oversee the process. The sane way of going about "building one's dream home" is dependent on a bunch of variables that you don't define. Basically you have two options, be rich enough that you can pay for whatever the hell you want or be moderately skilled in just about everything and do it all yourself. Regardless of which path you take you probably also want to do it somewhere that's rural, poor or preferably both so that nobody cares what you do. All the problems involve people. Busybody neighbors, local officials, etc so the more people you can cut out of the equation the better because each of these introduces a whole new set of problems and acts like a stress multiplier. Like everything else in life the faster you want to go from start to finish the more it will cost.
- blackrock 6y ago
  Thank you Captain Obvious.
bluGill 6y ago
There are plenty of general contractors that will do this for you. For a fee they will buy a property - most have a selection or properties in various subdivisions to choose from or you can bring your own (note that if you want in a subdivision you will probably find that the developers sell all/most of the property to general contractors before starting work - their bank won't finance things without that). If there is tear-down needed they will arrange that. They will help you get a print that can be legally built. They have deals with banks to get you loans. They will deal with sub-contractors to do the other work. Then you just need to get the final loan which again they will help you with (as in they won't start if they don't think you can get one) You can do this yourself. However you will have a hard time getting loans. There are two problems. First you have to pay for the place you are living (and then get rid of it!) while also paying for the new place that you will live. Most people are paying as much to live in one place as they can afford (this is right out of Adam Smith), so it is unlikely. Second, banks don't know if you can actually manage all the details, they don't want to be left when a half built house when you divorce (it is very common for couples to divorce over the stress of building a house). Be very careful about budget if you do this. I know a contractor who can look at a print and estimate the final cost - if he builds the print he will be within a thousand of the final cost. When he builds for someone else the final cost is almost always $30,000 more than his estimates - the floor plan is the same but all the little upgrades added up. This is even though every time someone asks about an upgrade he warns them their price goes up and the house won't be worth any more.
- blackrock 6y ago
  Nice response. Thanks. I was looking for personal anecdotes and experiences here.
abruzzi 6y ago
from what I've seen, you have your order wrong--get the loan before you tear down the old place, unless you have enough money to secure the loan yourself. I've known several people here who started the teardown first, and then tried to get a loan, at which point the bank told them no because the property, with no house on it any longer, was no longer worth enough to secure the loan.

throwaway0a5e 6y ago

Your question is so general that I'm inclined to say that you need to do more research and refine it more. If you're asking what you're asking you're not yet qualified to oversee the process. The sane way of going about "building one's dream home" is dependent on a bunch of variables that you don't define. Basically you have two options, be rich enough that you can pay for whatever the hell you want or be moderately skilled in just about everything and do it all yourself. Regardless of which path you take you probably also want to do it somewhere that's rural, poor or preferably both so that nobody cares what you do. All the problems involve people. Busybody neighbors, local officials, etc so the more people you can cut out of the equation the better because each of these introduces a whole new set of problems and acts like a stress multiplier. Like everything else in life the faster you want to go from start to finish the more it will cost.

blackrock 6y ago
Thank you Captain Obvious.

bluGill 6y ago

There are plenty of general contractors that will do this for you. For a fee they will buy a property - most have a selection or properties in various subdivisions to choose from or you can bring your own (note that if you want in a subdivision you will probably find that the developers sell all/most of the property to general contractors before starting work - their bank won't finance things without that). If there is tear-down needed they will arrange that. They will help you get a print that can be legally built. They have deals with banks to get you loans. They will deal with sub-contractors to do the other work. Then you just need to get the final loan which again they will help you with (as in they won't start if they don't think you can get one) You can do this yourself. However you will have a hard time getting loans. There are two problems. First you have to pay for the place you are living (and then get rid of it!) while also paying for the new place that you will live. Most people are paying as much to live in one place as they can afford (this is right out of Adam Smith), so it is unlikely. Second, banks don't know if you can actually manage all the details, they don't want to be left when a half built house when you divorce (it is very common for couples to divorce over the stress of building a house). Be very careful about budget if you do this. I know a contractor who can look at a print and estimate the final cost - if he builds the print he will be within a thousand of the final cost. When he builds for someone else the final cost is almost always $30,000 more than his estimates - the floor plan is the same but all the little upgrades added up. This is even though every time someone asks about an upgrade he warns them their price goes up and the house won't be worth any more.

blackrock 6y ago
Nice response. Thanks. I was looking for personal anecdotes and experiences here.

abruzzi 6y ago

from what I've seen, you have your order wrong--get the loan before you tear down the old place, unless you have enough money to secure the loan yourself. I've known several people here who started the teardown first, and then tried to get a loan, at which point the bank told them no because the property, with no house on it any longer, was no longer worth enough to secure the loan.