Home building question

[munyoz70]

Looking at an appraisal now on a new, 3/2, 1485 sqft (heated/cooled) house going for $161,000. Opinion of site value is $40,000 so thats $81.48 a ft on just the home. All brick exterior, architectural shingles, stainless appliances, separate whirpool tub and shower in master bath, 480 sq ft garage and 180 sq ft rear porch. Lows are that is has scored concrete and carpet and pre fab corner gas fireplace. Custom home builders normally take at least 20% on top of materials and labor, munyoz friend could be doing it for 10% or less if he's making money on other projects....that and the fact that the lot will be paid for separately means this could be doable.

The biggest thing I would worry about is losing half of those guys as friends when they are doing work at a discounted rate and you have a walk thru saying some work isn't satisfactory.

Well the main Guy helping me has built many houses still has his gc and wants to help me just cause he loves building its like a hobby to him etc...

[cwink]

The only thing I would be cautious about is using "a friend" in a business deal.. That never seems to work out they way you plan..

[peewee]

The only thing I would be cautious about is using "a friend" in a business deal.. That never seems to work out they way you plan..

X 100

[Chuckle12]

The biggest thing I would worry about is losing half of those guys as friends when they are doing work at a discounted rate and you have a walk thru saying some work isn't satisfactory.

Yep. Been there... done that... won't be back.

[Long Duck Dong]

I agree completely. I don't know what the market will bear in Rankin County, but up here a nice used home is not going to appraise for more than $90-$95 a square foot. I bought blueprints last year and was getting ready to start building when discovered it was going to cost about $100-$105 a square foot to build the house, not including the lot. I couldn't justify having $115 a square foot in a house that would only appraise for $95 a square foot. It was a no brainer for me to buy an older home that had already been remodeled. Not to mention that the house I bought has a lot of nice mature trees in the yard. If I had built somewhere it would have been in the middle of a field with no trees.

Im no builder but i see cost sheets all the time in my work.
I'd be leary of $80/SF. A good custom house in my neck of the woods is gonna cost north of $100/SF all day long. Sometimes well north of $100. I know there are builders in Jackson hungry for work but they gotta cut corners somewhere or use cheap materials for $80 to come out.

[munyoz70]

[quote="Long Duck Dong"]I agree completely. I don't know what the market will bear in Rankin County, but up here a nice used home is not going to appraise for more than $90-$95 a square foot. I bought blueprints last year and was getting ready to start building when discovered it was going to cost about $100-$105 a square foot to build the house, not including the lot. I couldn't justify having $115 a square foot in a house that would only appraise for $95 a square foot. It was a no brainer for me to buy an older home that had already been remodeled. Not to mention that the house I bought has a lot of nice mature trees in the yard. If I had built somewhere it would have been in the middle of a field with no trees.


[quote]

see thats what I was getting at. Seems like apprasal and actual worth is less than what people are expecting to get. They bought in the boom, the boom is over and people want boom money for used houses right now. Seems like either home owners are going to have to come off their prices more or people are going to have to give more than appraisal for houses.

[deltadukman]

The thing with appraised values that a lot of people don't realize, is that when you're buying a property, they dang near appraise withing $2-3k of whatever the person financing the loan is paying. That's kind of the reason we are in this mess as we speak. Depending on if you are buying or selling, then the appraisal is somewhat priced to help you out. I see this everyday. I hardly ever see an appraisal on a property that one of my customers is buying that isn't $2-3k over what they are closing at. You've got sellers that want top dollar saying "my house appraised at $xxxk and im not taking a penny less. Then you have buyers saying "this market sucks and im not giving you more that $xxxk".

[BAY KINGFISHER]

You can build a semi custom home for 85 a foot with a lot of work on your end. Materials and labor cheaper than ever. Just make sure you use your contractor friend to help purchase all materials. You will save a lot by doing this alone!!

[GILREATH]

Brett, come see me at my house at cannon ridge I'll show you what It cost me. 80/sf is more than doable with lot. But, you've got to do a whole lot your self and have a whole lot of people who owe you work.....not just buddies. And....you can't have anybody else involved with it, just you. You've got my number, call me and I'll try and give you a rundown,.

[bigoak]

Those of you that are building houses for $100+ per sf, how much is the bank willing to lend you? What percentage are you having to pay down? Can't imagine that any mortgage companies today will lend 100% on a house that cost $100+ per square foot to build. They probably can't find any comps that are selling for that price.

[munyoz70]

will do rob, thanks.