Buy/Scrape/Build/Sell

[Lucas Fay]

To anyone out there who might have some experience with this or advice. I am a general contractor with over 10 years experience in commercial construction but working on being self employed as a builder/developer of SF custom homes. I have a class A license in Denver and Boulder CO. My 2 year plan is this.

Step #1. Add Value

I currently own a small old house in Denver with ADU zoning in a great location where comps support sales prices for $250-$290/SF. I plan to pop the top, build an addition as well as a carriage house to offset the costs of the construction loan.

Step #2. Do it again

After the work is complete on my personal residence, I should be able to open up a HELOC to purchase another property for pure investment/profit purposes as the subject of this post suggests.

Question #1: As the GC, would it be smart to pay myself a small salary through the construction loan in order to bring in cash flow through out the construction process? anything left over after the home is sold would be considered my development fee i guess.

Question #2: What is the best approach to offset or minimize taxes for this type of investment/development model? from a developer stand point and a builder being all in one.

Any thought on this would be most appreciated. Thanks