I'm a contractor looking to become a small volume home builder in NY.
I have a lot of good subcontractors, family looking to invest, a
mortgage broker in the family, a bachelor's degree in accounting, and
a willingness to educate myself as much as necessary. This is
something I've wanted to do for years, but unforseen circumstances are
pushing me to finally make the move. Where do I start? I haven't a
clue and neither does anyone I know. The NAHB told me they only help
builders, not people looking to become builders. Any recommended
books, courses, associations, etc. would be greatly appreciated.
What's the bottom line? You have to know the entire industry, the local
codes, the nuances, in order to make a profit. And, you have to build what
the buyer wants. Nobody is going to teach you all of that. And, if any
accredited teaching facility did, they would cause you to sign something
saying that current market and codes may not reflect their instruction or to
I detect that you are trying to equate a college education with a joh or
career, vs., an independent cnntractor competing in the marketplace. No
such equation exists. You have to get your hands dirty and calloused. You
have to put your money where your dreams are, or, build up to that point in
business where you can make that gamble. You're not ready.
I "watched" an "approved" general contractor build our house in a new
subdivision in 1987. The developer was Genstar, a large corporation and
they had allegedly done their background work in vetting their builders (5)
in this new area.. The lot I picked had been assisgned to one of these 5
builders. That said, I watched foul up after foul up go on and delays,
complete with excuses and excuses drag on.
One of the final straws (out of about 30) was that the evening before all
the flooring was due to go in, the house was still littered with a lot of
construction debris..I contacted the flooring guys and was told that if the
house wasn't cleaned up before they arrived in the AM, they'd just walk
away. I went to the GCs home and he wasnt there and didnt answer his
phone/pages. My wife and I cleaned a whole pickup load of trash out of the
place late that nite so the flooring guys could get in in the AM. After
that, I decided that if HE was a qualified GC, well then I WAS a qualified
The punch list (and my $ 8000 holdback)endured for over 5 months with out
even one visit from the 5 subs that were "supposed to" come back. My wife
and I decided to do all the work ourselves and got it done spending about
half the holdback $$. The rest we spent an a trip to Hawaii- the builder
never got any.
In 1998, we bought an acre lot near Tucson AZ. Friends ( a drywall
contractor) were building in the same neighborhood. He knew a lot of subs
personally and they were going to do the various trades in his home while he
did a lot of the work. I was very familiar with woodworking and w/w tools
and had "the time" because I had just retired. My wife found an great plan
We had the plan "expanded" to 2744 SF by the architect, I got 5 copies of
the plan, booked all the neighbors subs & went downtown and applied for the
permits. Once they were Ok'd, I got the excavators in and away we went
clearing the lot etc. That was in Feb 98. We got our "final" and moved in
Oct 7th. I still had to build all the cabinets and do the exterior concrete
steps/landscaping but I had the time. We finished it over the next couple
All the subs and builder folk we got to know came by over time and remarked
what a great job we had done on the house...friends expressed envy..
We were proud of the job we had done ( I built & installed all the cabinets,
did the plumbing installation for kitchen and 2.5 baths, framed all the
interior walls closets, ceiling drops ( a BIG round one for the 23'
diameter Circular great room). We were "all in" with many custom southwest
features such as granite 4' X 8' Island with vegetable sink and BI
KitchenAid gas cooktop, K/A BI wall oven and micro combo,K/A trash
compactor, BI Sub Zero fridge, built in 8 ft Curved floor to ceiling (10 ft
tall) entertainment center, 36" direct vent gas F/P, 1300 sf of nice ceramic
13" floor tile with matching tile baseboards, 6' soaker tub, 4'X4" walk in
"snail shower, 12.5/11 and 10' ceilings, double entry brushed cedar 8 foot
doors and attached 1400 sf 3.5 car garage with covered 34 foot RV port on a
nicely landscaped acre with dramatic mountain views. We also went beyond
code with all the insulation and had the lowest heating and cooling costs
(by over $ 100 per month) in the neighborhood. All this was accomplished
with a LOT of our own work for $ 72.00 SF "All IN" (but that was 10
So, it CAN BE DONE, a newbie can be their own GC and do a good job (although
many here will say theODDS are against it)
We have sold (made a nice profit) and moved to another lakeview home we had
built to lockup stage, we contracted and did the rest on this one too and
paid about HALF of what the current assessed value is, so
IMO, if you think you can be a home builder and have the subs and the $$ and
are willing to take a chance on yourself, go buy a lot, get a good plan and
go at it, and TRY ONE first. If that works out, I guess you could say
you're a "residential home builder"
Many small builders do that around here and once the home is finished, they
sell their existing home and move-in, keeping it for 2 years (due to tax
considerations..No Capital gains if they live in for 2 yrs). Then they
build another and sell that one etc etc.
I've since turned 60 so I don't think I'll do anymore homes..just bought a
nice boat..the lake out there beckons so I'll leave the building to you..
Good luck..work hard
nntractor competing in the marketplace. No
If you read my post, I'm not only college educated, I'm a successful
contractor. My hands have been dirty and calloused for years. Nobody
can tell me education doesn't help. Sure, it's not the bottom line in
construction, but it certainly helps. I've done many successful
renovations with a book in one hand and a hammer in the other. I also
have the ability to learn anything I want to learn. I've taken many
gambles in life with mixed results, but the bottom line is I'm a
success by most people's standards and looking to take my life to the
next level. Your statement that I'm not ready is somewhat troubling.
If I was ready to build houses, I wouldn't be wasting my time in this
forum. I'd be, uh, building houses. I know what the buyer wants
because I would be building in my own city. I don't need to memorize
the laws because I have lawyer in the family who would also be an
investor. If your comments were helpful, I'd say "thank you". If
they were annoying, I'd say "f*** you". But since they are just plain
useless, I'll just ignore you. . .
Here (Calgary), a couple ( teachers) built a home for themselves
during winter and summer breaks, then sold it when they
discovered what the market was willing to pay and built another.
Today, they build a thousand homes a year.
I can think of half a dozen examples of small volume and custom
builders who started more or less that way. So, yes it can be
The question is not whether you *can* do it; the question is whether
you *will*. Do you have the balls to start? Do you have the
discipline and, determination to see it through? Can you attract
loyalty and strong performance from subs? Are you pragmatic enough
to forecast the economics of a project and to stick to the budget?
If you're looking for a course or formula ... there isn't one.
And no one is going to hold your hand.
Just do it ... hire a lead hand who can fill in the knowledge gaps
and supply contacts you're missing. You already have contracting
experience, you can read and write, and you have access to capital.
This is a "get rich SLOW' proposition. At best, you'll break even or
lose only a few bucks on your first project(s), but by the time you
are in three years, you'll either have a base or be ready to quit.
Here, and I suspect most places, there are only a few entry points.
Large developers are interested mainly in builders who can put up
a couple of show homes and commit to a good number of lots. The
smaller volume builders get in by taking left overs and don't really
wants. (In a declining market, bigger builders might be happy to
turn a few lots loose.)
Another entry is to buy inner city homes in emerging trendy
neighbourhoods, bulldoze them down and
put up a McMansion or a duplex .
An obvious but more difficult to find opening would be to find
a land owner just outside the city whose property can be
subdivided. Work with him/her .
Here, the market is declining following two years of insane
run ups in prices. Means there are opportunities from speculators
who bit off more than they can chew. Also means you need a very
In response to another post, you said that if you were ready to
build, you'd be building, not dicking around in a news group.
My point is just that you are *never* ready, if you wait till you
are, you'll never start.
replying to Dioclese, Stephsnow wrote:
I don't think that is what he was asking. It seems as if he was simply asking
for a point in the right direction of how to get started. Shame on you for being
so absolutely rude and telling someone they're "not ready." Seems you're the one
who is not ready.
Well they say "Build a better mouse trap and the world will beat a path to
I think the key these days is energy saving living. I'm reading about people
in your area who may be forced to move south due to the high cost of heating
this winter. I think they would prefer to stay in the area where all their
If you could figure out a way to build a house and sell it for less than
others AND design it so it uses very little energy to heat, then I would
think you could do quite well.
Another thing is people with a bit of money who are suddenly facing
outrageous energy bills. They are suddenly wondering what to do about this
and don't know where to start. The answer is many things... Energy Star
windows, sealing air leaks, additional insulation, new Energy Star
appliances, solar water heater, new energy efficient furnace, etc. Perhaps
you could offer a "package deal" to do everything needed.
And people with less money who last year closed off their upstairs due to
high energy costs. This winter they will be moving into one room and will
want that one room super insulated for a low cost. Also they don't want the
pipes to freeze in the rest of the house. Can just the pipes be warmed
without heating the entire house?
Other people will be combining families to economize. Move two families into
one house and share the energy bill. They will want to "winterize" the
I think you will be able to find plenty of work in this area.
Bill has hit the sweet spot.
I have been in the modular industry for years, just getting out
recently to the railroad. Good move at this point. Homes will still
sell, and GC's will still be booked solid, if they fill a needed niche
market. Find the niche, or create it, and go all out. Right now,
energy star type homes (actually super energy LEED type) are a place
to go, or fortified homes, a long vacant niche just waiting for
innovation. Build a house to 150 mph standards, build a soundproof
house, a bullet resistant house, NOW you have a niche. And while the
business may start slow at first, it WILL grow rapidly. Just think of
all those people who are afraid to go to sleep after the super-tuesday
tornadoes that killed over 100 people in 3 states. I know it is NY,
but I live here too, and we have had at least one tornado in the
vicinity every year since 2000! Find the need and fill it, THATS what
business is all about.
BTW - If you do the Energy Saving thing, there are all sorts of energy
related grants, low interest loans, and tax credits out there from the
state, federal government, and utilities. Might want to do all the paperwork
for customers or make it easy for them to submit the various forms.
You have financial backing, mortgage savvy, accounting knowledge,
you're willing to spend time and money to educate yourself and you've
worked as a contractor. You already have all of the basic ingredients
I also live in NY and the market for new home building has taken a bit
of a chill. There are opportunities, but you may find that something
with less risk, like doing a serious flip (not a coat of paint and
some shrubbery flip) would be the best way to get your feet wet. Most
people hiring a builder to build their house want to see some finished
products before they sign. You need to be able to point to what you
have done rather than what you could do.
Join a trade association such as the NAHB - you don't have to be a
builder to join - and you'll get access to people and programs that
will help you learn from their experience.
I am the author of a brand new book "How to Start and Run a successful
Home Building Business". My name is Harold Muxlow, Sr and I believe I have
written a "one of a Kind" book to help those wanting to open a business in the
fascinating world of home building. You can look at my site for more
information by googling "www.homebuilderlibrary.com"
Thank You for your interest.
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