General my own home?

[Justin Atkinson]

I have been obsessively consuming as much as possible on BP over the last few days trying to determine what strategy I want to follow for my investments. I just completed my first flip and it was an okay experience, but it was definitely my "learning experience" home. I did most the work myself and contracted out maybe half of the rehab.

We have decided we are going to downsize our primary residence to focus to increasing cashflow to get the snowball effect going and then move to a buy and hold model. My original thought was to find a good forclosure or SS for our primary residence and rehab (if necessary) over time.

Another idea that someone gave me was being the general contractor for my own new home. I have a considerable amount of construction experience and I have contacts for practically every trade needed to complete a home in the price range we are moving towards. Before we do anything I wanted to throw it out to the community to see if I can gather any wisdom on pros/cons of generalling (if that's a word) my own home. What kind of equity average could I expect from being my own general? Thanks for any help

Justin

[Chris Adams]

If you have the experience in construction to understand all of the details that go into planning, estimating, and construction phases of building a new home then you should do just fine.

You don't need to be able to perform the work, thats why you hire subcontractors. But you do need to be able to understand how the work should be done in order to assure the quality is there in the end.

Most of the problems with homeowners being their own GC comes down to organization and planning. I like to compare running a new construction project to choreographing a ballet. If one thing goes wrong in the schedule, it affects everything scheduled behind it. And things can start getting ugly fast.

Now when it comes to saving money, you should expect to save 10% overall on cost by being your own GC. But as the same time you may be able to buy and rehab a similar home for much less than the cost of building new.

I'm not sure how things are in your area but I am still buying homes far below replacement cost in my area.

Good Luck !