need tips/help for a rookie.

Hi all, I was a Civil Engineer and tried to keep myself updated on related interests, but possess zero practical experience as I moved on to IT career after my graduation. I visited certain for-sale town-homes and residences offered by popular builders and figured my needs would be better met with a custom construction. So I thought to have my house custom constructed to meet my needs ground up : From Ground clean up, foundation, ..all the way till walls and windows set up including bath/rest-rooms installations, electrical-wiring and painting done for entire construction) using a state-approved blueprint-layout/plan (to save approval waiting time). I want to have construction materials (wall types, paint grades, tap or closet models, wood type used etc..) chosen and purchases be transparent where I can have the receipts for the materials used in the construction with a goal of right-bang for the buck expended. I do not know how it works to acquire a land and get the above done, and what kind of loans work best to help with financing the above. I just prepared for a 10% down payment money so far. Could some one can please suggest: 1) whether regular banks or credit unions that offer home loans would also finance for stuff like above and if yes, what kind of loan(s) should I be enquiring for ? I tried speaking with a couple of realtors and I could not figure out whethe they are trying to morph my thought process to accept their deals or whether their feedback (too expensive and does ot qualify for home loan sort except a personal loan) is true. 2) if loan options work best with a specific type of deal, please suggest the same. 3) Any names of construction management firms with good reviews around DC/MD/VA area, who can help where I do not have to deal with the construction labor directly, and instead I pay the firm and get the constructed property delivered as per a planned due date. Thanks in advance, SP
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SP wrote:

Suggest you look for a house with some years on it that you can more readily afford. For instance, one where your "10% down payment" is maybe a 25% down payment. The more work it needs, the more you can learn about all of those details that you want to be acquainted with. You already know how to put up drywall and paint, right? Best wishes.
Bill

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On Wednesday, February 15, 2017 at 7:20:55 PM UTC-5, Bill wrote:

Agree. Among the other obstacles, I don't think typical lenders will give a loan for the purchase of the land and construction of the house. They will give construction loans if you already own the land. With just 10% of the project cost to put down, unless you have other assets to put up as collateral, I don't think lenders would get involved, there is huge risk on them. They could wind up advancing $200K and wind up with a half finished house that sits in the rain for years as the whole mess gets sorted out.
If you're a rookie with just 10% of the total project cost, I think you're likely to be in for a lot of trouble and risk, even if you can somehow get the financing. Like any endeavor, when you're engaging with all kinds of contractors, or even just a general contractor, if you're inexperienced, there are infinite ways they can screw you.
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On 2/16/2017 12:47 PM, trader_4 wrote:

I don't know the percentages, but most lenders have specific requirements for completion steps before advancing funds.

Another factor is time. If everything gets approved and construction starts, how often will you be there? Can you take the time off of work so you can check in every day? The project will pretty much consume your life for 6 to 12 months.
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What you want is a construction loan. They are short term - up to 12 momths or so - and are to be replaced with a mortgage once the construction is completed. I doubt that 10% down would get you one, more like 20% or more.
The lender is going to require that a general contractor be involved. That involvement is going to greatly bump up costs over functioning as your own GC but you will be isolated from all the nasty details such as finding/dealing with and paying subs, ordering materials, scheduling and the like.
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Sometimes a "project manager" can take the place of a "general contractor". I have served as a "project manager" on several smaller projects - basically taking the load off the owner so they didn't need to be on-site to supervise and keep an eye on the progress.. It was my responsibility to make sure the framing contractor put the windows where they belonged and installed the specified windows (which they didn't initially, so I had to make them tear out and redo -( BEFORE the siding and drywall was completed)
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SP posted for all of us...

I think Bills post is good. Find a Realtor that has some SFD that are in need of repairs. That requires you address issues as they come up and learn from them. Do you have the time for this or do you like to have other activities? It is hard to conceptualize a house from plans. If you do go that way then find out you messed up you will have learned a very expensive lesson. Watch the show Flip or Flop. While not local to you it provides lessons that are valuable to homeowners. Even their "experts" come in after the sales-this isn't permitted, R&R the electrical or plumbing, HVAC system, foundation, floor. Go to open houses and get ideas. Good luck with this.
--
Tekkie

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