Posted by Kevin Andrews on October 03, 2003 at 06:58:18:
In Reply to: Re: Just Starting Question - Design with intent to add on posted by JWmHarmon on September 30, 2003 at 10:46:20:
I am in the same boat here. I will be closing on my land next week, so i should start the construction soon.
Harmon is right about the bank not wanting to accept a loan for an incomplete house. When I went to the bank, I inquired about everything that has been mentioned thus far. Luckily for me, I am having someone else frame the house. They were willing to do the material take-off and fill out the paper work I needed for the bank. I also told the bank what I was doing as well. They received it very openly and applauded my efforts.
My construction loan is at 6% interest for a 6 month construction loan. I cannot lock in a perm. oan until I am 60 days away from being 100% complete with the house. This is why you will have trouble getting a loan for an incomplete house.
Here is my advice:
1) Start talking with different banks and explain to them what you are wanting to do.
2) Get pre-approved for the loan and see how much money you will be able to work with.
3) If the pre-approval goes well, start looking for land.
4) Start talking with builders and framers. Only a true framer (or a builder/framer) will be able to give you an accurate material take-off.
5) Pass the take-off around to a couple of lumber places and get quotes on the material. Take all the quotes and lay them out on paper. Distinguish who has the lowest price on each product. Take your findings to Home Depot. Home Depot says that they will match their competitors and then beat their price by 10% - it is posted in their stores. If they tell you they will match one of the product quotes, call the manager over there and gripe with him/her. If they still insist, tell them, "OK, I want this matched today...I will come back tomorrow and get this matched, and so on and so on..." they will give in and agree to match everything on the list - this alone saved me nearly $4000 on material.
6) After locating the land and getting a contract in motion, apply for a septic tank permit (if needed)
7) Talk with the license and permit office in your area to see what all is involved in their process. Fin what standards (codes) they follow. Mine follows CABO - I bought the book.
8) Go back to the bank with a set of house plans in hand. Have them get the appraisal done and let the rest fall in place.
My house is 2244 sq. ft. It is a 4 bedroom, 3 bath with dining room, large kitchen and large family room. My appraisal came in at $199,000.
The bank will lend me 90% of the appraised value. Leaving me to build the house (and roll some consumer credit in) with $179,100.
Subtract out the cost of the land ($39,900) and subtract the closing cost - I now have $137,000 left to build the house.
By my cost estimating, I should be able to build the entire structure and finish the house for about $80k.
So with he land, the credit roll over, and the actual build, I will have about $150,000 in the construction of my house. My house appraised at $199,000 - thus I will have $40,000 equity the day I move in.
I will be doing:
AC/Heating - duct work and install the heat pump.
Cabinets (I build them)
Counter Tops (Kitchen and bath - Cultured marble and solid surface)
Felt on the roof
Concrete work (Drive way)
I will have done:
foundation (crawl space - concrete block)
Framing and Dry-In
DryWall - hang and finish (I just hate doing it)
Plumbing rough in
AC - hook up for inspection
The more you do yourself, the more you will save. Luckily for me, I know alot of people in the trades that will help me out. My best frined's father owns a AC/Heat operation. We will buy the parts from him and then install ourselves. He will do the final hook-up. Another friend is a certified electrician. He will sign off for me saying that he did the final hook-up at the fuse panel. So on and so on...
If you do not know anyone like this, have the builder or framer you talk with to refer you to people. Ask if they can have the stuff subbed out at their cost - never hurts to ask.
Hope this helps....
I will have the following done:
block crawl space foundation
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