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How do you become a home builder?

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Apr 26, 2013, 06:25 PM
raiderpower
How do you become a home builder?
I have really been searching for my passion lately and I think that building homes may be it. I have worked in the building materials supply industry for the past 8 years and residential construction has always piqued my interest very much.

I would like to keep my full time job and maybe start small and work on the side until I am able to afford to do it full time.

Are there any home builders on here that have any suggestions on the best way to start? Any advice would be appreciated.
Apr 27, 2013, 10:44 AM
Sparky617
I'm not a professional builder but I too tried working a full time job and doing a side job twice. I'm a slow learner ;-)

You will quickly tire of working a 40 hour job and then working on your side jobs. Your clients will also want their projects done faster than you are physically able to complete them. In my case I built two screened porches for friends. I under bid the jobs, I more than covered the materials but on an hourly basis I probably earned minimum wage for my time. Even knowing I was working full time and putting in many hours on the projects the clients still grew impatient at the pace. A skilled contractor would have finished the jobs up in less than a month. It took me 3 to 4 months of working every weekend and burning through some vacation. A rainy weekend can be a huge setback when you can only work on weekends.

If you want to do this, I suggest starting very small. Start in spaces the client won't be living in while you work. Finishing a basement, finishing a garage and improving storage, a ground level deck, a shed. Both of my screened porches were 1 story off the ground. That was a huge complicating factor in the time required to build. It is much easier to do things on the ground than on a ladder for EVERYTHING.

If by building you mean being the general contractor and hiring other people to do the trades work you really need to have a good understanding of building project management. Getting the right trades scheduled at the right time to keep the project moving. If you tell the plumber or the electrician to show up next Monday but the framers aren't ready you've just ticked off the electrician and plumber because they planned to be on your project that week and now they have a crew with nothing to do. The next time they'll keep you waiting.

The folks I've seen do it successfully are fireman who work weird schedules like 24 or 48 hours on at the firehall and then have 3 or 4 days off. If there aren't many calls while their on duty they can be pretty rested by the time their break hits and they can get a lot of work done in those days off.

I'd suggest taking some classes on general contracting at your local community college or vo-tech school before doing anything else.


General Disclaimer

Any advice given here is general in nature and is not necessarily valid for your given area. If in doubt check with your local codes enforcement department for what is required when doing electrical, plumbing or structural work on your house. Permits may or may not be required in your area and home owners may not be able to DIY some tasks. I have no way of knowing if you have the skills needed to complete the tasks you are asking about, when in doubt seek professional assistance.

My advice may be worth exactly what you pay me for it. :-) For the record I did not stay in a Holiday Inn Express last night.
Apr 27, 2013, 11:08 AM
GardenSprite
You might start out small by adding handyman projects. Seniors frequently need help with small projects and could provide references to help you build up your credentials, and see if this is something you really want to do before you take on home building full time.

You might also try to make a full time switch to one of the building trades to build up your experience before you take on the larger issues of being a GC, if that's your goal.

You'll need to have a substantial financial fallback reserve to tide you over before you could do homebuilding full time anyway.
Apr 27, 2013, 09:30 PM
Jaybee
Third vote for starting small and working your way up.

There are two main learning curves here - how to build and how to run your building business. The building part is best learned by working for a builder for a while, then taking your knowledge to your own company. the business end of things is actually much harder. All contractors must be licensed. License qualifications are based on your skill level, your experience and your cash. While they will vary by state you can expect both written and oral tests, income and asset verification and an introduction to the wonderful world of workmans comp and liability insurance.

As a contractor for 25 years i can tell you that it is a very rewarding way to make a living. It's also very difficult. One fact that has stuck with me since I started: In the U.S. 96% of all general contractors go out of business within the first two years.

So as everyone else has advised - go slow and work within your limits.

This message has been edited. Last edited by: Jaybee,


Jaybee
Apr 28, 2013, 07:33 AM
Frodo
jaybee is right, as a plumber i have the same problems.
1st step. apprentise with a master to gain knowledge.
surround your self with positive and honest employees
nothing is worse for your reb than a surley worker
your work is your rep
take business classes and learn the tax code
and workers comp laws.
hire and fire about 16 secretaries intill you get a GOOD one. cute dont mean squat, but a multitasker is worth her weight in gold


https://www.youtube.com/*****?v=vn7bkncf1_E
Apr 28, 2013, 11:08 AM
GardenSprite
The SBA has seminars and advice for small businesses. You might also find kindred souls and guidance from small business associations.

In Michigan there's an organization called NAWBO (National Assn. of Women Business Owners). I went to one of their meetings decades ago and was impressed with their professionalism and knowledge. These kinds of associations are a good way to network and possibly line up your business affiliates - legal, financial, tax, etc.

Also, you might want to think about volunteering for charity projects, such as Habitat for Humanity and/or Purple Heart Homes. Although you won't be paid in dollars, you'll get some building experience, and might even have an opportunity to make some professional connections if pros are on site helping with the work.

This message has been edited. Last edited by: GardenSprite,
Apr 28, 2013, 01:10 PM
Sparky617
Jaybee,
Your experience sounds like so many that go into business loving the building, cooking, landscaping work whatever. The business aspect is what will kill most people going into business for themselves.

I'm amazed watching "Restaurant Impossible" on Food how many people go into the restaurant business with little food experience and no business experience. "I love to cook.... so I thought I'd try this" Cooking even for a large group is different than running a restaurant. Running a successful contracting business is different than building.


General Disclaimer

Any advice given here is general in nature and is not necessarily valid for your given area. If in doubt check with your local codes enforcement department for what is required when doing electrical, plumbing or structural work on your house. Permits may or may not be required in your area and home owners may not be able to DIY some tasks. I have no way of knowing if you have the skills needed to complete the tasks you are asking about, when in doubt seek professional assistance.

My advice may be worth exactly what you pay me for it. :-) For the record I did not stay in a Holiday Inn Express last night.
Apr 28, 2013, 07:24 PM
joecaption
How do you feel about working 7 days a week, 12 hours a day, having to make payroll dispite the fact you got stiffed from a customer.
Spending hours and hours talking to customers, working up a ton of quotes and getting nothing out of it?
Having the IRS up your butt dispite the fact you made no money.
Having to buy, replace, repair all the tools your guys broke or stole during the week.
Unless your ready for all that stick with being a small time handyman.


joecaption
Apr 29, 2013, 12:43 PM
raiderpower
Thanks everyone for the input. I know at first it's going to be a sharp learning curve, but I was thinking about building a small spec home to start out with. I have enough cash to pay for it out of pocket, which will be very beneficial to help pay with the high carrying costs I'm bound to incur at first.
Apr 29, 2013, 02:51 PM
joecaption
My suggestion would be to hire someone that knows what there doing to do the foundation, and another company come in and frame it up and dry it in, then you finish the rest.
Or better yet just buy a fixer upper and flip it or rent it out.
Not a great time to be trying to sell a new house.


joecaption
Apr 29, 2013, 03:49 PM
Jaybee
X2 What Joe just said. In different times, building and selling a spec house would be a great way to get established - especially considering you have the money so you can do this without borrowing. Most states allow you to build one or two houses in a two year period without having a license.

The problem is that right now the housing market is still down - especially for starter houses. Before taking the plunge in this direction, talk to a local realtor about the realistic market in your area for the type of house you would build. Otherwise, you may find yourself selling it at a loss.


Jaybee
Apr 29, 2013, 05:53 PM
Sparky617
If you opt to try the flipping method to break into the business take this advice I got from a church friend that has the "we buy ugly houses" franchise in Raleigh. Only buy a house that is worth no more than 60% of what you will be able to sell it for, less if it needs extensive work. Unless you're getting it for a dollar like "rehab addict" I would avoid a house with serious foundation issues.

A real estate agent neighbor of mine, knowing my love of working on homes, told me of a house he had that he thought I should buy and try to flip. This was before the market crashed though around here it hasn't been bad like in some areas. So I asked how much is the house worth today. $180K. How much would it be worth if I do the renovations you're suggesting $210-220K. So, neighbor, the only one making money on this investment is you. I passed on the "opportunity." It would have needed to be in the $130K range to make any sense at all.

Just the carrying costs and the real estate commissions would have cost me more than I could possibly get from my labor.

This message has been edited. Last edited by: Sparky617,


General Disclaimer

Any advice given here is general in nature and is not necessarily valid for your given area. If in doubt check with your local codes enforcement department for what is required when doing electrical, plumbing or structural work on your house. Permits may or may not be required in your area and home owners may not be able to DIY some tasks. I have no way of knowing if you have the skills needed to complete the tasks you are asking about, when in doubt seek professional assistance.

My advice may be worth exactly what you pay me for it. :-) For the record I did not stay in a Holiday Inn Express last night.