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
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
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,
Suggest you look for a house with some years on it that you can more
For instance, one where your "10% down payment" is maybe a 25% down
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.
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.
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.
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
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
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)
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.
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