A Topic Hardly Ever Mentioned.... - Posted by Scott (AK)

Posted by Scott (AK) on January 22, 2000 at 21:46:40:


A Topic Hardly Ever Mentioned… - Posted by Scott (AK)

Posted by Scott (AK) on January 22, 2000 at 21:14:24:

I was thinking here lately…

One of the topics I hardly ever see mentioned here is new construction.

Has anybody had any experience in building either single family residences or multi units and selling them off at retail upon completion or even keeping them and sorta “building” their own little empire.

Not talking rehabbing here, from the ground up.

Any thoughts?


Would love to hear from someone currantly in the field.

Scott (AK)

It harder to make a buck on new versus used houses because… - Posted by David

Posted by David on January 24, 2000 at 19:30:38:

you can get a bargain in the imperfect market of used houses. There is not a standard price for an x,000 sq ft house. But the new materials like drywall, windows etc. come with a somewhat fixed price. On the labor to put all the pieces together costs 40% or so of the price. You can do it yourself and save money but now you bought a job.
All that said I’m building a rental house now, but is is a unique set of circumstances, including getting the lot at a low price and a $3,000 well for free, and a A-1 tenant who wants to sign a 5 year lease, that make the deal go.

Forgetaboutit! - Posted by BRnBA

Posted by BRnBA on January 24, 2000 at 24:25:39:

In my best Brooklyn accent.

Re: A Topic Hardly Ever Mentioned… - Posted by Jonathan Rexford

Posted by Jonathan Rexford on January 23, 2000 at 16:38:50:


Mark Hit the Nail on the Head. (No punn intended) Mark had mentioned that the profit is 20% or so I can attest that in a perfect market that the Number is more like 12-15% GP. I own a construction and Mortgage cpmpany. I build 20 units per year some speculation and custom. I have been building mostly Commercial type Buildings for contractor trades…more profit. Since I have found other means of cash i am only preselling my speculation homes because the cost really cuts into the bottom line.

Some of the reasons why - Posted by Mark-NC

Posted by Mark-NC on January 23, 2000 at 15:37:45:

Before I became full time in real estate investing I was in the building business.

We built new homes and rehabed some homes. Some of the things you have to consider in building homes are, You will have to get construction money to build them. There is a time frame to buiding a home from the ground up the average time on a single family home is about 3 months. Then you have to worry about Materials, Labor, Inspections,holding costs incase you can’t sell it right away. Then when its all said and done the average builder only makes 20% profit by the time they pay all there bills. And for the smaller single family homes thats not a lot of money for 3 months of work. The builders that are making money are the ones that are building several homes a year. They are making money on volume. I can’t tell you how many guys I know that thought they were going to make money building homes but when it was all said and done they said that their employee’s made more on the home than they did. I am not trying to discourage you just be very smart about it and do the research.

Now Look at the investing side of Real estate. You can Make money with no money what so ever. You do not need any employee’s, No major equiptment or warehouse space,You do not have to worry about the weather, You do not have to worry if your subs are going to show up, ( unless you are rehabbing) You do not have to worry about all of the insurances, regulations and codes involved in building a home. The list can go on.

The point I am trying to make is there are too many easy ways to make money in real estate without going through all the work that it takes to build a home. Believe me I know, I did it for 20 years before I saw the light.

Good luck whatever you decide to do.


How did the … - Posted by Lee

Posted by Lee on January 22, 2000 at 21:34:50:

Hi Scott

Boy, I hope it’s YOU I’m thinking about.

As I remember… you were having problems with the city or county Re: having to have a license to … (do business).

How did that turn out?

Forgive me if I have the wrong Scott!