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Discussion Starter #1 (Edited)
I have 18 acres of raw vacant land that is paid for in full. I currently believe the market in that area can sustain 12-15 more homes. I can currently split off 2 parcels for resale and then the remaining has to go through a site condo development. For these 2 parcels up front I want to put up spec homes to invite potential customers into the site condo development. The area I am in has a mix of modular and stick built homes. Working with the local lumber company they highly suggest the lower the sales prices the better.

So I am thinking of doing one or two spec modular home up front off the main road. Now I am in the process of getting my builder's license and have access to my brother who works in excavation. So I wouldn't think I would have a problem obtaining a construction loan b/c I own the land and I don't see why I couldn't get a modular home company to sell me a home and let me general contract it myself.

So my general question is what pitfalls and things I need to be looking out for? I do want to form a Construction LLC. Through the construction loan could I pay the Construction LLC for the general contracting and excavating services that our company would perform on this house? Also is it best to throw the house and property into a LLC while working on it? Any tips and suggestions are greatly appreciated. Thanks in advance!
 

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I don't know what area you are in, but if it is NJ, I hope there aren't any wetlands on the property. Also, has your local zoning board given approvals for subdivision?
 

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Discussion Starter #3
Property is in Michigan

The property is located in Northern Michigan and does not have any wetlands or floodplains. The county planning commission has not yet approved the subdivision since I have not started the application yet. I am currently in the process of applying for the 2 parcels first. I have talked to the local township and I currently meet all of the requirements for the divisions to occur. So I feel very confident those will go through.

I purely bought the property on speculation and at the bare minimum I know I can create 2 parcels up front and put up some modular homes to "test" the waters before creating the subdivision in the back. I just want to make sure I set myself up properly and financially sound since I am going to quit my job in the next 6 months to focus on my new business and development opporunity.

Jake
 

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I wouldn't lead with a moduals first off. No matter how well they're done, they're still considered *low end*.
But if that is what your market will bear, then go with them.
 

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Jake, I am just wondering if you have worked in the construction field? You are talking about a lot of work physically and mentally. I don't mean to rain on your parade, but for you to post this question you must not be very sure of things. You may want to start a lttle slower and just do one spec at a time until you get the hang of things. You have to be able to stay on top of things to be "profitable", and without a lot of experience and know how it will be very dificult. Start slow and get a good name at the bank. The economy isn't really the greatest for spec building right now as I know some spec builders in the Detroit area that are having houses sit on the market for up to 5 or 6 months. Good Luck in what ever you do.
 

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Jake said:
Working with the local lumber company they highly suggest the lower the sales prices the better.
I'd never use the opinion of a local lumber company as a basis for my marketing plan. Also from what I've seen, when it comes to housing, striving to be the cheapest guy on the block is a miopic strategy-especially if you ARE the block.
 
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