All Forum Posts by: Jimmy Nguyen

Hello,

Does anyone use listsource to find good land deals for new construction?  Compared to my county's antiquated land record office, list source looks like it's really easy to use and will save lots of time.  Although, I did have some questions about the filters.

Is the best way to find buildable lots on listsource to select Property > Property Type > Agricultural and/or Vacant Land?  

Could I also use Property > County Land Use?  

In suburban areas, I'm thinking land zoned for agricultural use or land use will be limited.  That really leaves me with the "vacant land" option?  There is also a category called "Residential:other," which sounds intriguing.  

Also, I have a good feeling, people who inherited land will be good people to reach out to.  Is that best filtered by using the Options > Trustee-Owned Properties > Only
or to use the Property > Equity(%) > 91%-100% filter.

Thanks in advance for any guidance.  

Sincerely,

Jimmy

Thanks @Bill Gulley and @Rob Harris.  Yeah I've been looking at infill lots in my target areas.  There are some good deals to be had if I get the seller to take 40% off.  I hope to get at least 1 out of 10 to take that offer.  

I really dream of doing large net zero community developments with mixed housing, but also trying to envision a way to keep cash flow coming after the project is done.  I like what Solar City has done by leasing solar panels or doing Power Purchasing Agreements (PPA) and in effect becoming a utility company.  I think that since I will be constructing the houses, it will be less time and cost to put the solar panels up on the houses or ground mount them in community spaces and give buyers the option of buying their solar array outright or paying for the solar energy produced at a reduced cost.  Renters could have the option of using us as their utility to reduce their energy costs and have access to clean energy.

I think renters will be a good market for paying for solar energy through a PPA since they don't own the building or panels.  Buyers, however, may not want solar panels on their roof if they don't want to own them or lease them.  Maybe all the houses for sale will just have electrical chases installed to facilitate easier solar installation so cables don't have to be run on the exterior.  

For PPA's, let's say you can get a unit to pay you $50/month to produce their electricity, how many units do you need to make it worthwhile?  Solar panels require little maintenance over its productive lifetime so the major cost is the upfront cost of installing the panels.  Currently, prices for solar panels are about $1/watt.  Labor pushes that price to $2.80/watt.  Average home uses 900 kwh/month.  A home with a good building envelope that is airsealed and superinsulated could go down to 450kwh/month.  In my area (Northern/Central Virginia), using average solar radiation data, that would mean you would need to have about a 3,250 watt array to produce the energy required by the household for a cost of $9100.  Paying around $50/month, it would take 15 years for payback if you don't take into account any federal or state tax incentives.  

Not sure if this is viable, but I have to do more research.  

I am thinking of ways to create passive income from new construction.  One option is to build new rentals.  However, I was bouncing around the idea of doing seller financing as the spec home builder/owner.  If my future business has good cash reserves, it could be possible to build a new home with no or little outside financing needed.  Then if we did seller financing, we could use the buyer down payment to payback loans (if any) and then sit back and collect the mortgage payments.  Has anyone done something like this?  What are the pros and cons compared with building new rentals?  I know one advantage is that you wouldn't have to deal with maintenance. 

Thanks in advance for any advice that comes.

Been a while since I posted some pics of the house.  Finally got the rough-in inspection and am now ready for insulation and drywall.  I'll be using mostly dense packed cellulose in the wall cavities.  Going with spray foam would have been about 10% cheaper, but cellulose is better in the following ways: made from 85% recycled content as opposed to petroleum based, great moisture buffer, excellent sound dampening, and excellent fire resistance.  Also, sometimes spray foam can pull away from parts of the wall leaving large voids. 

Can't wait to finish so I can start building homes for customers.

@Lydia S. How much do you usually factor in for insurance?  I got a  Builders Risk quote for the home I am building for $2648 for 12 months.  Some of that amount would be returned if I finish construction earlier.  

I am assuming liability insurance is something that the company has to carry all year round, whereas Builders Risk insurance is specific to each project.  

@Mike Wood What's your average cost/sqft to build?  How do you try to keep costs in check?  What do you usually factor in for portable toilets, temporary power, temporary water, and other holding costs?  

I've been using $110/sqft as a general rule, but I'm thinking that is a little high, especially if I do most of the framing, siding, and some interior work like flooring, kitchen/bath. Of course, in Northern VA, cost of materials and labor will most likely be more expensive.

@Isaac Antoine - I've been two New Orleans once, but found it a great place to be.  Planning to go next year for Jazzfest.  Maybe we can meet up.  Do you think vacation rentals via AirBnB are doable in New Orleans?  

Thanks @Mike Wood. I'm thinking of using a HELOC for the land and construction costs. It's risky in that it's a loan in my name and not my building company and my current home is the collateral. The rate is 3.5%. I might end up doing a construction loan if I can find a good rate, but get the land through the HELOC. I'm focusing on areas that have houses selling over $200/sqft to ensure a good ROI.

How's New Orleans?  Good area for spec homes?  I started watching Treme (I know I'm late) and it is pretty entertaining.    

Thanks for the tip @Manny Cirino.  The 7.5% figure I stated accounts for 1.5% for closing costs. 

3 months since my last post and I want to say that we are still alive and chugging along.  We have installed all the windows & doors, roughed in electrical and plumbing, and now have started mechanicals and siding.  The triple pane windows manufactured by Intus, a Lithuanian company, have been installed and they were triple the pain.  They weighed significantly more than your average double pane window and cost a lot more.  The average U-factor of the windows is 0.18 (R-value 5.5), which is almost less than half of your standard double pane windows which have a U-factor of 0.30 (R-value 3.3).  The general rule is that every time you double your R-value, you reduce energy loss by 50%.  It'll take a few decades to recoup those savings, but I hope to hand this farm off to my kids one day.

For all of the people interested in the figures, here are some of our breakdown of costs:

Electrical rough in and finish for 2800 sqft living area + 1600 sqft basement = $12,430

Rough plumbing for 2800 sqft living area = $5,000

Mechanicals (8 LG ductless minisplits with 4 ton condenser) = $15,500

ERV (ventilation) = $1100 + labor (TBD)

LP Smartside lap siding + Benjamin Moore Aura paint + cedar tongue and groove 1x6 STK + Sikkens Cetol stain to cover roughly 3400 sqft = ~$11,000 (materials only)

Here some more pictures:

We still have to install the battens to cover the seams, which should add a nice shadow effect.  We will use tongue and groove cedar for the soffits to add a nice color contrast to the darker siding.

I decided to do a basket weave pattern for our front porch to add some flair (not TGIF flair, but close).  It added to our time with all of the blocking and extra miter cuts required, but you only live once!  The 45 degree angles also provide more resistance to lateral forces than if the decking ran perpendicular to the joists.  This will protect against the unlikely scenario of when we have 30 guests on our porch run quickly from one side to the other and come to a jump stop.  Kind of like when we used to try to tip over our school bus by all moving to one side of the bus on sharp turns.  

For my future spec home business, I've been doing a lot of research on what home buyers are looking for when they say they would prefer an energy-efficient home.  Many consumer surveys find that people do want houses that are "efficient", but those consumers can't really explain what an efficient house is.  I believe having a small solar PV array, tight building envelope, extra insulation, reduction of thermal breaks, continuous supply of filtered fresh air through an ERV, and energy star products can be enough to get a "green" premium on new houses.  The trick is explaining it and the benefits to the customer.