Aldeer.com Forums Alabama Deer Talk Aldeer General Forum Ask Aldeer - Owner Build Loan

This is good, sound advice, and very similar to our experience.

We ended up finishing our 1,100 s.f. cabin for $65k including furnishings (Yard sales, antique stores, free stuff from friends, etc...). I don't think we are going to be able to do that on the 600 s.f. addition, but I think I can do it for $100 a square foot.

I’m guessing, for the sake of argument, you missed the part where we did all of the prep work, footer, wiring, plumbing, trim work, painting, etc?

We also did as JDhunter stated and purchased some things ahead, and shopped around for others, instead of just running out a paying high retail for every fixture.

I’m not arguing figures. I could give you exact numbers, but the dollar amount that I had in my build at completion was roughly $230k less than what we would’ve had with the quoted finished square footage price of a GC. It’s isn’t rocket science. His price per sq ft vs. my finished price per sq ft.

The GC price ended up being around 60/ft more. You do the math.

We didn’t cut corners, with materials, to save those figures, per se. Yes, we shopped around on fixtures, etc, but we have the same 9’ & 10’ ceilings, tray ceilings, crown moulding, marble countertops, wood flooring, custom cabinets, etc. that was quoted in the GC pricing, just a lot more time and elbow grease.

Oh no , I read and understood all the trade work you did . I don't I understand if you were where you had to pass inspections and I assume code, how you did the electrical and plumbing without a license.

I will mention as well to look down the road at what parts of your build will be the most important to you in 10-15yrs. Dont know your kid/family situation. I saw her Dad go down hill fast and knew this was our forever home so I did everything handicap accessible. All 3-0 doors, even put blocking in my walls before sheetrock for handicap bars in bathrooms and my shower. Hope I never need it. Oh and blocking everywhere you might hand a TV, thats been helpful.
Also I sunk extra $ into a few things Im glad I did. Bigger garage and mud room, master bath and closet. After 10 years Im realizing in 6-7 more our kids will be out or on the way out completely and we will have a HUGE empty nest. Needed the space at the time.
I put extra$$$ into my back porch because its my outdoor kitchen. We spend a lot of time there watching ballgames, cooking, and entertaining guests. Also a large front porch and sidewalks. I got concrete on 3 sides of mine and river rock on the 3rd. Mine has almost zero wasted space. I see floor plans where Im not sure what people are thinking. Things like fancy ceilings and wasted space are not necessary and add cost. We thought out every detail months-years before we ever started. Even put the Wife's pantry and utility room facing her side of the garage so I could build a doggy door to slide the groceries straight in from the garage. If anything happened to mine I would build it back the same, but this time a GC will do it. It wore me out.

I understood exactly what you were saying 2Dogs. I need to know where it is that GC's are making $230K on any new build with an actual/dead cost of less than a million plus bucks. That's where we need to be building homes. Specs are specs and I know exactly what dead cost is and what we make, and I just wish we could hit some of the numbers being thrown around on here. We do customs on a negotiated, cost plus basis. Completely open book to the homeowner on all costs. On semi-custom or presales, we give the home owner allowances on countertops, flooring, fixtures, cabinets, appliances etc. If they want to save money by buying along the way, finding deals or having cheaper subs on allowance items or better material sources than I do (which is somewhat laughable) then good for them. Fact is, 9.9 out of 10 times, once the homeowner makes a selection, I generally find it or get it from where they found it, for a significantly cheaper price than what they were quoted, or I show him a product similar in look and quality that is available at a cheaper price. It's the difference between building 10-12 a year and building just one house, one time.

One thing that you need to look at, that your bank will not tell you about, is that most banks have a single close/construction perm loan product. With it, you only have to close one time and avoid paying duplicate closing costs on both the construction loan and your mortgage. Most of the people we build customs for do not know it is available and I get them with a bank that offers the product and they save $5k-$15K in closing costs and fees (depending on the size of the loan) by only closing once. You close the construction loan and then the bank converts it at time of CO to your permanent mortgage. Most also offer a one time float down on the rate, if rates drop between your initial construction loan closing and the date of CO or loan/mortgage conversion.

Well most gc's can't get their buddies to come do plumbing, electrical, trim work and footers for free on the weekends. There's a cost associated with that. And I'm sorry if I have to wonder about the real quality of work someone is doing for free, especially if they are skilled trades men who know what they can charge for this. Also your time should be worth something, if your good at what you do you can make more $ doing what your good at than trying to do something your not. I'm not saying someone can't build their own home, I am saying more times than not they wish they hadn't.

Yup

I’m currently in the middle of a build, (no financing) doing it myself. The ONLY problem that I had was with the insurance company, they didn’t want to provide a construction policy because I had “already began construction.” That’s my FORMER insurance company ALFA. Go ahead and say it Bham Fred!

That was the same thing that happened to us at first, but State Farm came around, at least until we finished, and that's when Brand Meyer stepped in.

I know of a lot of folks that GC'd their own and got financing in the last several years. I would use more of a local bank than a large organization.

I was going to do an owner build finance back a couple years ago when Covid happened. Wasn’t going to be an issue at all for the banker I talked to. I also have detailed plans drawn up and had everything budgeted out, time frames, flow of work, sub contractor info for everything etc.


Having an hvac business I absolutely do not like new construction work and have only taken one new construction ducted job in 3 years. Most owner builds are very un organized at best and most GCs are so cheap you can’t make reasonable money and honestly most of the hvac contractors I see doing new construction are breaking even at best and or just using it to keep guys busy or are a one or two man company that just wants to create a job for them selves and do new construction only.

Rant over 😆

Do it if you want but be very detail oriented, have everything lined up before breaking ground. Don’t expect a cheap price especially if you wait last min and call and say “can you plumb, wire or hvac this house next week, btw I’m getting three bids”

They told me they used to just give the loan to the owner and let them run with it. But as covid came around folks would stop the build or blow the loan and still only be 75% done on the build. Starting requiring a GC with good plans and signed estimate/contract.

That's the way they did my son. Needed a set of plans and cost approach . We had a GC family friend do a cost approach and pull the building permit. He also helped with subs and when I got into something above my paygrade. This was in Scottsboro , they require building by code and is inspected. Subs must have city license and GC , electricians , plumbers and gas fitters must be state licensed also .

This brings up something else , a realtor told me some folks buying want to know what contractor / builder built a house and are turned off by the original owner being his own DIY contractor. I can see that .

Reading over yall responding to PRB for overseeing his home build, yall must think im a lunitic for planning on building my own and not borrowing money. Granted, itll not be a $350k home. But, dang, when did America make the full switch to the country who does nothing for theirself? It wasnt too many generations ago everyone built their own home, or family and community did. Our country has really gone to crap. Independance is dead. Everybody preaches about self dependance and all that, but where is it? We would rather overpay for somethingbinferior than have to do a little work for a better product. Crazy world wr re e living in today.

Absolutely not , some folks can pull it off and others it's a total disaster. Building out in the county without permits and inspections makes it easier and of course the complexity of the house. I'm a fan of DIY and pay as you go. Done it myself.

2Dogs, we’ve been our home for a little over a year and I GC’d it all. We’re in the city of Athens so we had to do the inspections and the whole bit. I noticed you mentioned up the thread a bit about being able to do plumbing, electrical and such for yourself and yes, you can as an owner do the electrical, plumbing and HVAC but you can’t run gas lines. Gas has to be a certified installer. We did all ours and satisfied the inspection department with minimal issues. I did have to sign a document stating I wouldn’t sell for 2 years from getting our approval to move in.

Zbrann, as to your question that started this whole thread, your only chance of getting a construction loan being your own GC is potentially a small town, local bank anymore. Pretty much all the banks have clamped down on that. We found someone who would do it but ended up going a different route altogether. I didn’t really want the bank involved.

I thought you told me yall built your house on the mountain. And i understand there might be some people just not capable of it. And the permits and liscenses i understand. But there was a time when Americans did things for themselves. Its kinda what were known for. Just about all of us have two arms two legs ten fingers. Set your mind to it and get it done. Its mazing what a human can do with the proper motivation.

Wow, really appreciate all the great responses to this thread. Lot of good information, and a lot of opinions. We could get into a rabbit hole responding to all of these, so I may reach out to a couple of you via PM

Jwalker - My day job and kids keep me pretty busy, so I won’t be swinging the hammer. Don’t hold it against me. I promise I’m not sitting idle 😅

It’s funny you bring this up. I agree completely. Zbrann should probably hear this as it’ll give you a glimpse of what GC’ing entails.

I waited till I was 52 years old before we decided to build our own home. I knew going in that it was going to consume every spare, waking minute I wasn’t at my paying job. I am fortunate to come from a construction minded family so I had a lot of experience to lean on. If you’re thinking of doing it yourself here’s some tips. Be 100% prepared to go before you ever break ground. A bank will require it so here’s an overview. You’ll need everything from the land to build on, perk test if necessary, permits, city/county driveway connection approval, a driveway built, utility pole installed and operational, water set, drawings complete, a framer hired to give you a lumber list, pick out your windows, doors, garage doors, shingles, exterior finishes, appliances and bathtubs. Now start hiring and pricing all your subs, block/brick man, concrete guy, plumbing, framer(already hired), electrical, hvac, vinyl/gutter guy, gas, window/door setter, insulation, sheetrock, painters, flooring, cabinets, countertops, trim/doors/finishes, stair guy if necessary plus you’ll need to pick out and purchase all light and faucet fixtures, flooring coverings, colors, cabinets, tiles, and anything else you want. You’ll also have to deal with city officials, utility folks and such as it arises if necessary. I probably left some stuff out but you get the idea. If you are not completely prepared it will overwhelm you quickly and greatly slow down progress. We unfortunately built at the height of the lumber price craze and slow suppliers. I had our windows, doors, garage doors, brick and such ordered before we ever broke ground and fortunately things arrived as needed.

I done everything on our home from cutting down my house pad down 3 to 4ft and building it back up 6 to 7ft, plus driveway, to all my trades minus gas, set my windows and doors, built my cabinets, laid all flooring, painted, all trim work including coffered ceilings, built our staircase and such, plus all kinds of nicknack stuff. I also got my own subs and ordered every single thing we used to build our home. My framer gave me a lumber list and I took off from there. I won’t lie, it was quite an undertaking and we worked our tails off but I couldn’t be more prouder of what we accomplished. Would I do it again? Absolutely NOT! Lol.