Newbie with extra land. Split, build, sell?

[Chris Sabanos]

Hey all, I'm brand new to BP but I've been interested in REI since college. I bought my first home in Brenham, TX about 2 years ago. Brenham is right between Austin and Houston and this area is growing rapidly with all the folks fleeing the city. I would like to get into the BRRR game, but I have too much debt (mostly student loans).

My home is in a small neighborhood where I own 6 plots of land. My home, a detached garage, and my fence are sitting on 3 lots. I’m thinking of splitting off the other three to build a home and then sell it.

Questions I have…

1. If you’ve done this, what did you run into that you weren’t expecting? (Planning on being my own GC. I work for a contractor who can guide me in the building process, but he stays pretty busy and I fear I’ll be left in the dark a bit)

2. If I split this land off, will my full mortgage be due? Or would I have to pay them for the land I sell??

3. I was advised that I should expect to pay about $100/sqft. Is this too low? My neighborhood is middle class-ish.

4. My mom is going to loan me about $60k to build it, but I'm assuming 150-160k to build with sale price around 245k. If my DTI is already around 40% and my wife only works part time, how would you recommend getting a loan for the remaining 90-100k?

One more tidbit, I plan to treat this as a business endeavor. I’ll definitely be using the calculators and reports available here on BP… So I’m not walking into a bank or to private investors looking like a chump!

Thanks so much!

-Chris Sabanos