Newbie, North County San Diego, CA

[Dolly Meas]

I currently own my home and I'm in the process of refi my home to 2.875 and would live in it until I find another place.  I would like to keep my current home as a rental and look for a 4 bathroom 3 bath home.  Here's my question.  Homes in the area that have the land size and # rooms are 700K-950K.  So as I'm closing looking at the market, I did see some land that is being sold in north county for 150K-300K size is 1.5 acres to 6 acres. No utilities but the lot next to it has homes with new construction.  I would assume it has plumbing and electricity hook ups.  I wanted to see your thoughts in buying land and building a home on the property.  Does anyone have experience in the cost to build a home in San Diego?  Do you have any contractor or architect recommendations?  Do you have any lenders you would recommend.  My thought is, if i decide to go for the 1.5 acres, it's selling at 155K and if I it cost let's say 450K for new construction...I'm still in the green 95K to 345K.   Am I looking at this right?  Should i have any other considerations? I would love to pick someone's brain and get some insight.  

Thank you!  Dolly 

[Ned Carey]

@Dolly Meas Holding costs were mentioned by @Bryan Noth they include every cost from the time you buy. It is not just loan payments.. You also have insurance; builders risk which is much more expensive than normal insurance, property taxes, utilities once they are hooked up etc.

You also have what I call soft costs, These are your costs other than the land and the cost of construction. I call them soft costs because they are not obvious and easy to under estimate. These include points on your loan, all the holding costs already mentioned, closing costs to buy, possibly a second set of closing costs for a new loan, permits, engineering and or architectural drawings, maybe other costs related to the development of the land, etc.

You may also need two loans; a construction loan for purchase and development and a permanent loan for when you move in. That will be two sets of closing costs.

Sorry I can't give you specifics because new construction is not my thing.