When to pull the trigger on new home build

Are people really building homes in this current economic climate and interest rates?

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what a nightmare of a process

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Sounds miserable.

Won’t be building for at least 2 years. We plan to save about $5000 a month towards a new house each month we are in the shop home

My wife and I built our first house on some property we owned. I will tell you that it wasn’t easy and wouldn’t do it again. We were in our late 20’s and like you had one child. But, in your 20’s you still have plenty of energy.

Are you paying rent where you are currently living? If so, that will free up some cash when you move into the small shop house already on the property. Another advantage is that the small shop house is on the property you will be building on. This will help you keep updated on the construction process and progress once started. If you plan on doing any of the work yourself, you won’t have far to travel to or return home from the site. My wife and I did a lot of the work ourselves: electric (I had worked for an electrician so with his permission and oversight we used his license), painting and staining, wallpaper, HVAC (a good friend owned a small company, and I assisted him) and of course cleanup and disposal. Finding a couple of hours to work here and there was made harder by driving distance so living on site is advantageous.

My advice would be to plan to stay in the “small shop house” and save up as much as you can. Get your plans drawn up by an architect. Speak with banks about using your land value to secure a construction loan. Find a General Contractor because you won’t be able to get financing without one. Check with relatives and friends to get names of electricians, plumbers, HVAC, carpenters, roofers, etc. The General Contractor should be able to help with this (be prepared because he may insist on using his subs). Once construction is started one of the biggest pains in the butt is coordinating subs that depend on other subs before they can start or complete a project. The same applies to inspections.

Interest rates, who knows? Our first interest rate was 8 3/4 % but they had been higher and were coming down. It wasn’t too long before we could refinance at a lower rate.

Good luck and let us know how it works out.

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Are people really building homes in this current economic climate and interest rates?

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We were riding around yesterday and ended up in a brand new neighborhood in North East DFW - there were 10-12 homes in different stages of being built.

Average costs probably 600K up

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When to pull the trigger

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Less than 1000 sq ft is small for two years. You could add a 200-400 sq ft prefab shipping container home to that and it would make a big difference in livability for less than $20,000.

I’d also look at home plans that are expandable. Maybe you could get away with building a $250,000 smaller home in a year if rates drop that you could expand to what you want later.

I’ll second that acting as my own GC to completely gut and renovate my current home bought as a foreclosure was one of the worst experiences of my life. My wife was constantly expanding the budget and dealing with inspectors and subcontractors was a hassle.

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We have plans for a house that we want to build that costs roughly $450k.

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Roughly 450K is actually $600K - at a minimum.

Interesting topic. Was coming here to see what the MT was thinking the economy will be doing in 2 years.

I still haven't bought the land I mentioned previously, but they called me back and I'm thinking about it again. My issue is I would need to liquidate some brokerage/IRA funds and deal with the taxes to do it. If I felt the economy would improve in 2 years I wouldn't think much about it....