All Forum Posts by: Mike Smith

Land is much more difficult to sell. Make sure it's listed in the MLS and have your agent (or yourself) contact all the small volume custom builders in the area. Large builders don't want to invest much time in a single site.

My opinion, if it hasn't sold in three years, it's not priced competatively with the open market. If it's listed in the MLS enough people have seen it and decided not to buy for some reason. That reason is most likely price.

I would recommend linking all the reports you have in the MLS and shortening the due diligence period if falling out contracts have hurt your marketing effort.

The duplex units will be simplest to build as there are different and more complex fire separation issues at 4-5 unit buildings.

A unit with a carport is cheaper to build than a unit with a garage.  However, the garage will sell/rent for a higher price.  Only local market costs/research will tell you which is a better option.

I do not agree with @Matt Devincenzo regarding the wet walls.  All plumbers I know quote projects per fixture and don't care if the toilet is 5' away from the kitchen sink or 20' away from the kitchen sink.  ABS drain pipe is typically less than $1 per LF when purchased in bulk.

I seem like a complete downer on these forums, but building new homes is much more difficult than most people think.

"I would ride on my golf cart to the houses being built on the weekends just for fun." - is not different than if I went on a restraunaunt forum and said "I want to open a restraunant.  I have zero experience, but my wife and I eat out a lot???"

If you want to become a builder, I would recommend working for a builder to learn.  I would give similar advice to someone that wanted to open a restaurant, landscaping company, hair saloon, etc.
  

It's very difficult to obtain a construction loan without being a licensed builder.  Construction loans are very risky for banks even when loaning to an experianced builder.  

Your best option to is use your father-in-law as the builder in a very limited scope.  For example, you pay him $5,000 to be the "builder", but that only includes using his license and him giving you his list of recommended subcontractors.  

That being said, if I was your father in law, I wouldn't do that.  There is simply way to many things that can go wrong building a new home with zero experience.

Not familar with the DC market at all, but most residential builders target 20% gross margins and 10% net margins.  These numbers can go up/down 5%ish depending on local market conditions.  Due to interest rates, the market is not great is most areas of the United States, so the downside is most likely.

Your 100% COC return in 5 months is not achievable in the US, except in some very small niche markets. You might do better by moving back to Austrailia and joining your uncle...

I'm sure you didn't make a post to debate the pros/cons of SIP panels, but there is a reason that SIPs/ICF construction is less than 1% of starts in the US.  The reason is that the energy savings aren't worth the additional costs.  Especially the additional costs by electrical, HVAC and plumbing.  Most of the trades aren't used to working with SIPs and will charge additional.

The sales people for both SIPs and ICFs will tout the labor savings, but they simply don't exists.  Otherwise, builders who build 100s or 1000s of homes per year (and work really hard to save $100 on any one trade) would start building with them.

I'm sure many similar arguments can be made for any revulutionary product (electric cars) but SIPs and ICFs have been around for decades without gaining any traction.

Most residential builders are moving towards BuilderTrend.  Not sure if it will work for you, but worth checking out.

@Kurt West has great advice about size.  I would recommend you use Google Earth to draw boxes around other storage unit complexes in your area to determine how many acres they sit on.  If they are all 3-7 acres and you are trying it on 1 acre, it probably isn't economically feasible.  This would save you engineering/survey time and can be accomplished in just a few minutes.

Agree, one year is the standard for workmanship.  Certain components (faucets, toilets, water heaters) will have longer warranties through the manufactuer. 

In the real world, unless you have a long term relationship with your trade parnters, you will get very little covered under warranty.

My guess is around 25% of the profits.  You could also work out a per lot fee, but with 2.5 acre project there isn't enough lots to make it worthwile for him I would guess.

You typically won't find that experienced developers will work for you by the hour, unless it was just an a friendship basis.