How to Become a Professional Home Builder – Part I
- June 5, 2017
- Posted by: marlenedubois
- Category: Home Health Aide Training
in the past I’ve had many of our builder students ask pertinent questions such as what size home do I build; what do I put in of which; where do I build of which? Looking back of which’s easy for me to make these decisions currently, nevertheless when I first started out building in 1975 these were trial as well as also error situations. as well as also my hindsight will be crystal clear. of which’s very easy for me to look back as well as also see things I wished I had known when I first started out building. of which’s what you’re going to learn in of which article.
You’ll learn the pros as well as also cons of being a speculative or spec builder (as opposed to a contract builder.) If you’re not familiar with those terms, a spec builder will be one who will select a site, choose a design, build a home as well as also then sell of which to a client. A contract builder will be a builder of which you hire to build a home for you. By the way, spec building will be how I suggest you begin rather than building a home for somebody else. I’ll explain why later.
I’ll begin by showing you how to be one of the best spec builders in your area, even if you’ve never before built a home. I’ll expand of which information by discussing points of which are unique to spec building. Next I’ll discuss points of which are unique to contract building, as well as also points of which pertain to both spec as well as also contract building.
A Word Of Caution
I want to stress of which when starting your construction business, you must separate your business coming from your personal life. from the early 70’s I was in real estate commercial sales. I barely survived a major recession. Almost everything I owned was in my name as well as also most of of which was repossessed. Had I known then what I know currently, I’d have retained of which large home, of which Mercedes as well as also of which airplane.
from the construction industry there are many things of which can happen to you, some of which you have absolutely no control over. According to the 2008 Annual Report by the National Center for State Courts, in 2007 Americans filed over 0 million lawsuits, more than a third of which were civil cases. of which does not include the volumes of legal disputes of which were settled before a lawsuit was ever filed. Based on the sheer number of legal disputes of which arise, in as well as also out of court, one could say of which most Americans run the risk of being involved in a legal dispute at some point in their lives – for many people, more than once. of which will be especially true for those who work in professions with high lawsuit vulnerability such as doctors, dentists as well as also, yes, especially builders! You should invest in hiring professionals to help you protect your assets. of which’s easier than you may realize. of which will be one time you can’t procrastinate. I can tell you some great horror stories nevertheless I don’t want to scare you of which early from the game. Anyway, don’t live in fear of what might happen. You only lose if you don’t play.
I. Speculative Building
A. How To Be One Of The Best Spec Builders In Your Area
Before you buy a lot, before you buy any house plans, the first thing I want you to do will be put together your success team. I call of which the Henry Ford philosophy. If you read about Henry Ford, you’d learn of which some people considered him to be illiterate. He once sued a Chicago newspaper of which wrote an article claiming he was illiterate. from the lawsuit, Henry Ford emphasized of which he didn’t need to know everything about everything because he hired experts to assist him in all of which he wanted to do. of which left his mind free as well as also clear to do all the things of which he truly knew how to do. Well, I’ve learned coming from of which philosophy myself in the past. I realize there will be not enough time in of which life to do everything. I currently hire experts to assist me in my decision-producing, as well as also of which has been a positive factor in my success building homes.
Your success team should include the following:
1. Real Estate Agent
2. Landscape Architect
4. Kitchen/Bath Designer
5. Inner surface Designer
6. Lighting Designer
I’ll discuss each of these team members in detail as we go through the course. Don’t be concerned. When you start out, you don’t need the best. These team members are more affordable than you could possibly imagine.
B. Obtaining Your First Loan
Let me tell you a story. as well as also the further you get away coming from of which story, the harder of which’s going to be to borrow money to get started out.
Let’s assume of which you’re gainfully employed. If you’re not employed, nevertheless instead are self-employed, then you have to have a high credit score or produce tax returns for the past three years to qualify for the loan. If you currently rent a home or apartment as well as also you want to build a home for yourself, you’re a prime candidate to borrow money to build a home – for yourself. So, you get the money. You build a home. You put of which on the market during construction. You sell of which. You go to the bank. You borrow money under the same premise. You get the money. You build a home. Put of which up for sale. Sell of which. Do of which over as well as also over again as well as also pretty soon you walk into the bank as well as also the banker looks at you as well as also says, gosh, you should become a home builder. as well as also you are.
currently, of which’s the easiest way to get started out. Most every builder I know got started out from the industry of which way. of which method will also provide you with the least risk. Why? Because if you don’t sell the home you’ll simply move into of which. In turn, of which will make of which easier for you to sell because a home of which will be furnished will normally sell faster than an unfurnished home. You’ll eventually sell of which as well as also can start the process again. The bad news will be of which you may be moving a lot. I remember one couple of which wanted to own a home free as well as also clear. They used of which method on all 5 homes, plowing their profit back into each home. Their sixth home was constructed completely coming from cash. They owned of which free as well as also clear as well as also got out of the construction business. They simply wanted to do what of which took to own their home free as well as also clear.
The further you get away coming from the above scenario, the harder of which will be to get the initial loan when you’re just getting started out.
For example, let’s say of which you currently own a home as well as also you want to borrow money to build another home for yourself. A banker will generally be negative. They tend to look at the downside as well as also might comment something like of which. “of which sounds real Great nevertheless you currently own a home. What are you going to do with your current home?” Your response will be, “I’ll put of which up for sale during the construction of of which brand-new home as well as also then I’ll sell of which.” The banker comments, “of which sounds pretty Great, nevertheless what if you don’t sell your current home?” The banker generally looks at the downside – of which will be you’re going to be stuck with two house payments. If you’re able to show you can afford two house payments, you may very well get the money.
You always have to have a successful conclusion to your story you tell the banker. Never look at the banker as well as also say, “Well gosh; I’m only borrowing 70% of the appraised value. If the bank had to repossess the home the bank would likely have a bargain. The bank could sell the home, as well as also make a Great return on its investment.” Never use of which kind of logic on a banker. Bankers don’t want to be from the homeowner business. Never imply or even think in your mind of which will happen.
If you’re not gainfully employed or you have a problem with your credit or you have no cash, your next best method will be to find an investor of which will joint venture a project with you. I’ve done of which on many large projects when I didn’t possess the finances to afford of which myself. What I normally did was to structure the investment in order of which the joint venture partner would likely put up very little or no money. Investors truly like of which! What I needed was their strong financial statement. Understand, there are many investors, such as medical doctors, who have tremendous financial statements nevertheless they have very little cash. So if you can structure the investment in order of which of which requires very little or no cash, of which becomes a relatively easy investment to sell. When I’ve worked that has a joint venture partner, after selling the investment, the investor would likely be repaid any cash he had invested, plus a fair interest rate of which was agreed upon up front. All remaining profits would likely be split 50% to me as well as also 50% to the investor. Normally in a situation like of which, the investor would likely let me deduct any out-of-pocket expenses nevertheless, understandably, they would likely not let me take any salary.
You would likely not believe some of the wild, crazy, ridiculous investments requiring large amounts of cash I’ve seen these people put money into. Many of them possess the same luck from the stock market of which I have. These people should feel blessed of which you came into their lives that has a viable real estate investment. I’ve found these people by talking to friends, going to investment seminars as well as also running ads from the paper.