New Biz, New House

Jeremy England

Hi, I'm currently a super with a production homebuilder and I want to start my own building business. I have a question regarding finances. The first house I would like to build is my own. Has anyone dealt with this situation and how did it work for you. Did the bank give you a higher interest rate because you were self employed? Did they give you "sweat equity" , Did it help your situation to be licensed? Did you start a business relationship with them in the form of spec loans? Any info would be great.

Jeremy

sammy

I'm trying to do the same thing. I've got the license and have fiancing for land labor and materials for one spec home. I'm just trying to get the name out there and hopefully get some business. I'll let you know how it works out.

Later.....

JustaFramer

Don't ask wells fargo unless you have a butt load of money in the bank already and super credit ( I think they hate blue collar types). There is a loan company that gives construction loans for a desent rates. I don't remember the name right now.
One thing is to look for banks that have interest rate that are better than the bigger named banks Big name banks with ******************** rates invested heavily into enron and other junk markets before 9/11.
Another way to make money is to buy fixers and do some work and sell for profit. I know a couple years ago older houses out sold new homes. Nobody really wants a house with no yard but buy them because that is what is availble.

sammy

You might also look on line for owner builder programs. They usually charge a percentage but you may be able to nogotiate for a lower rate if you dont use their "consulting". But if you can get financing elsewhere and have the money to put down, I would use it. Framer is right about wells fargo.... they are no help at all, small banks and local credit unions are probably the way to go. Dont rule out mortgage companies either.

Jeremy England

I have been off the board for a while due to the move, living in temporary housing etc..

I just thought I would update people on how things went with regards to the previous posts on this thread.

The answer is I got extremely lucky. I did finance my own house but to get my business going i haven't used a dime of my own money. I got a call from a friend of a friend the day before i moved and he asked me if i was moving to the area to build homes. i told him yes and got a contract for a 3800 square foot house that we are framing as I write this.

Not long after I got another contract for a 3500 square foot house with a couple whose daughter goes to dance lessons with my daughter and they heard i was building in the neighborhood of the 3800 sf house.

Not long after that another house under contract, 2800 sf from references.

I did invest about 3000 dollars in advertising: 3 yard signs, 4 car signs, 1 senior newsletter ad, a yellow book ad , and cover of a realtor mag ad.

Thus far the only thing that has paid off is references, but in fairness the yb ad just came out last week and I did get one phone call from it.

To anyone trying to get started my advice is tell everyone you know about your intentions and see what turns up.

Spectatorz

Congrats on the "Contracts!"

Sounds like you are off to a really good start. Do the Best Work Possible and set the Standard for Your Reputation as High as You Can.

In the area of financing I suggest you seek a Construction Lender that writes loans based on the Estimated Value of the Project.
To my knowledge, a Builder with a Decent credit rating that has invested a chunk of his own cash and time into a project such as the buying the property, paid for the permits and basically started the project can get a loan out of it.

Where are you at ? East Coast, West Coast ?

Jeremy England

I'm in South Alabama on the Gulf Coast