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I have about $40,000 from my first house flip to invest in a starting up a contracting business with my family which has always been my dream. My Dad is an electrician and built our family home, and my Mom is a real estate agent. They have done numerous flips over the years but are also interested in building. My parents also have about $40,000 initial investment.

We would ultimately like to build spec and semi custom homes.

My husband will continue to work. He has a very good job with good income which he does not wish to quit anytime soon although he does wish to be involved in the business on the side.

My question is, am I being too ambitious by wanting to start off with a spec home? Should I start off with a few flips until I can finance myself or should I just go for it?
What kind of financing is available for spec building?
What kind of financing is available for flipping? (bought first flip cash)
If I can't sell the spec home, am I able to buy it from myself since we have no mortgage at the time?

I have a lot of questions and am just testing the waters. I don't want to make any moves until I'm sure of what I want to do, so any honest advice is appreciated!
 

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You need to take a look in your area and do some research for homes and how they are selling, schools etc. Every thing your mom should be able to do as a RA.

I have some contractors that do some flips and new homes. Here specs have been dying out and custom homes have been increasing. along with the market filps are becoming more difficult.

Good Luck.
 

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You should not get into spec house building. Stay doing fluff and buff flips for a few years until you learn a few things.
 

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Totally under capitalized for spec building. You need developed sub relationships and enough money to lose big on your first spec and not care. Ie 5 to 10 times the cost of the build. This will enable to shrug off some over runs, pay holding costs on the construction note if it doesnt sell and have the abiltiy to wait until you get the price you need instead of getting to the end of the build and selling in a rush because the note is due and you cant cover the balloon or payments. My friend started building in 06 and was out of business in 09. If he had had sufficient reserves hed still be in business and still have his 300k.

Why build spec when you can build a custom home that is sold before you pick up a tool? Tough to do with no portfolio but a much safer route. If the market does get super hot the demand will be strong that someone will bite.
 

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havent seen a spec house here for 8+ years.....maybe they work in your area, but most likely not.

find a customers and build custom homes
 

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You can probably make more money flipping than by spec building.

I know plenty of people who have made more money applying lipstick to a pig than I made building some very nice homes on spec. Kind of sad, really.
 

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Spec homes are not a good business to get into. But I don't like the idea of house flipping neither, it can be a bad idea as well. Are you in the trades? Carpenter, electrician, plumber, or painter? by any change?
 
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