My search on 'spec homes' in this forum has produced a ton of great discussions and some very good advice along the way. I'm considering going down this path, have made some initial progress with the GC and now looking at possible opportunities. Financially the deal has 4 points that carry the weight:
- 50/50 after ALL costs
- a $10,000 fixed fee for the general, administrative and construction management expense
- Since they are RE brokers too, a 6% fee as a commission for the marketing and sale fo the property
- If my property becomes a 'pre-sale' or model to build another home for others by the GC , I would get 15% of the profits after all costs; none of my monies would come into play. (This looks like a see-ya-later clause).
The last point is particularly bothersome since I communicated clearly I want to leverage existing construction activity to get to the next one and the next one if a new buyer approaches.
The GC provided me a 2 page document that contains everything but the actual construction budget and the construction draw schedule.
Does anyone have an (investor-friendly) GC Contract for spec home building??
As always, our comments are welcomed!
Brian D.
