Build a Spec Home

[grandyellow111]

Has anyone ever built a spec home? Is there any money in building a spec home but using subcontractors for almost everything? For example, suppose I found a lot to build on, hired subcontractors for all work except perhaps windows, roofing, painting, finish carpentry, and finish plumbing (and handling the real estate listing). Would there be any money in that?

 

[seige101]

The 'builders' i used to wire houses for all the time would do this. Subs for about 99% of all the work.

They would buy the lot for approx 40k, build a house for 105-120k and sell it for 185-205 effectively putting 20-40k in their pocket on each house all by making phone calls.

There was another guy who would buy a house in disrepair with a extra lot attached to it. He would put a minimal amount of work into the house. Hoping to break even or put a few grand in his pocket to cover the expenses. He would then build on the essentially 'free' lot and pocket the extra $$

So yes there is money to be made and the more you do your self the more you can put in your pocket.

 

[BrotherBart]

Back in the seventies a guy in our town bought a lot and was doing this. Got it under roof and had a disagreement with the carpenters over them adding a saw sharpening charge to the bills. They walked off, put the word out on him and I passed that unfinished house going and coming daily for thee years. One day the bank repo sign showed up on the dirt lawn. The next week work re-commenced.

 

[webbie]

Location, Location, Location....

A couple of my friends build a few in s. jersey using mostly their Credit Cards as financing...and did very well. You have to be good at corralling the subcontractors, materials and dealing with everyone on all ends (building officials, etc. etc.).

Supply and demand also comes into it big time. Some areas allow so much development that the big builders make for so much inventory that it's hard to sell a single house. Other areas not so much...

Studying or knowing the local market is the key.