Building Your Own Home, The Savings Potential
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- Опубліковано 12 чер 2024
- This video answers the question...What are the potential savings when building your own home? The video shares current builder markup over labor and material costs, and shares the potential owner builder savings in an example. Also, we explore the big bonus of being an owner builder for your own home...the tax savings implications of increased owner equity.
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We've managed to save around 37% on ours. The wife and I (66 and 63) have done all of the work ourselves. We've also purchased almost all of the lumber we used from local Amish sawyers. All of it was true dimensional rough cut pine and was a much better grade than anything we could get at the local building supply or box box chains. We've used that and then planed, routed and sanded what we used for the interior walls, ceilings and trim/moldings. We spent tens of hours on social media market places to find great deals on tubs, shower stalls (all new in box), windows from remodels that were in like new condition, new wood stove, used triple wall pipe, rolls of pex, rolls of electrical wire and direct burial wire, breaker boxes, etc. The only items we purchased outside of that were from the quote desk of our local Lowes and then got an additional 5% off for signing up for a line of credit with them. We've been building for just over a year and are in the final stages of wrapping up the interior. We just had it appraised for the insurance and it came in at $300k as is. It's passed all of the inspections and we just have the final inspection to go. And we're 100% off grid with a nice solar system running the whole house, a well and septic so we have no real bills either (we heat with that wood stove only, and we've had spray foam insulation installed so even at -40 below, we stay more than warm and comfortable. We did all of our research right here on UA-cam and used all of the best building construction advice we found (built using 33% less lumber using 2 x 6" 24" on center etc. You CAN do it, even at our age.
@ucsncinc very inspiring although I know it wasn’t as easy as you make it sound but seems pretty straightforward. Thanks.
Inspiring!! Y’all must be so proud!
I did this in 2007-2008 just before the housing crash, I had a current lot because the house was destroyed by fire. So we cleared off the old house and built a new one on it, because in my county they would allow a homeowner to do so. Fortunately for us we didn’t have a homeowner association that would have caused some problems, thank God, we didn’t. The process was stressful at first but the end result was rewarding. I was encourage anyone to do this if they can go in with the right mindset, and do a lot of research, we saved I know a lot of money, because the average cost to build a custom home was $150 a square foot back then based on what my former classmate told me who was a residential and commercial builder. We built a total 4965 square foot home for materials and labor for $275,000.00 including removal of old house and cleaning lot, the Lord blessed us, so pray fully consider this the rewards are great and now he blessed us to pay it off this year 2023!!!
Amen! Thank you for your encouragement. Did you do any work yourself? If so, which parts of the build?
@@oldporkchops yes I hung all the inside doors and trimmed around the windows and installed the baseboards, painted the walls,ceilings, and installed all the kitchen cabinets and appliances. The installation of the kitchen cabinets was so easy because I took the dimensions to Lowes and they had the cabinets labeled and layer out in numerical order, so all I had to do was level and plum them.
@@jackieburch6875 That is wonderful. Amazing that you were able to build close to 5000 sq ft for close to $55 per square feet. Did you have a systematic system for vetting subcontractors?
@@oldporkchops yes I did. I was fortunate to come across someone had posted things you need to know before hiring a contractor, I don’t remember the exact title but I adopted some of those principles such as if they’re not willing to sign a contract then don’t use them. I wrote the contract that would benefit me as well as any honest person. I told them that if their work failed inspection that I would deduct a certain amount from their payment, and yes the honest ones agreed, and the dishonest ones would not and I would not hire them. The cost of 7/16 osb board was $4:75 cents back then, and I would purchase nearly all my materials except drywall and electrical materials and hvac systems and plumbing. I got general contractor discount from Lowes because I spent about $80,000.00 with them, so I took the contractor name they gave me and used everywhere they recommended me, and boy that really helped save thousands of dollars, they also called me whenever someone returned something that the customer changed their mind about eg; I got cabinets handles and knobs that cost $14 dollars for .50 cents and hot water heaters, 2 of them for $300.00 dollars, they referred me to a local truss company that saved me $4500.00 dollars it was truly a blessing working with Lowes. I had a general contractor from the church that would come by just to make sure everything was going well and he didn’t ask for anything, he said that the Lord, told him to check on me just in case I needed anything. Now that you mentioned it, I believe you’re are right about the square footage price because I can remember him saying that as well, I was just focused on getting my family back under one roof, but I still have my receipts because it was a fire damage and the insurance didn’t want to cover it all because they said the house could have been restored, but I prayed about and the Lord gave me a vision of what the new house was going to look like and I heard these words “The Glory of the latter house will be greater than the Former.” And it is. From 2080 square feet to 4965 square feet…Praise God, And now it will be paid off this month November 2023!!!
So you think it is so easy to build being yourself a contractor
I'm currently building my own home and also doing a lot of the work myself. I've so far cleared the land, installed my own well pump (400' down), waterproofed the basement including French drains, backfilled and poured 17 porch footings. I hired out the dig, basement walls and well drilling. I started digging but it turned out to be all rock and my excavator is old and the plumbing for a hammer doesn't work so I decided to hire people to do it (two guys with 2 machines took 6 days for the dig).
I like using expansive demolition grout when into bedrock.
The issue is always financing. It really hard to get a bank to approve financing for owner builders.
Building your own gives you the chance to play with designs to save money. Some designs are cheaper than others. I decided on a 24x24 6/12 pitched skillion post and beam cottage. Land was 16k for 10 acres in central U.P. Masonry materials and heavy timbers are local in my area. Around 8000$ for framing and masonry materials. Haven't built walls yet. More like a pavilion right now. The biggest cost is mineral wool insulation and windows. I also have 70 psf snow loads. I do masonry work and framing. I can usually beat poured wall price with cmu block walls. Instead of cement company getting money for cement I get the money for my labor. A cmu block wall does take longer. Inspector said he don't see too many masonry appliances. My plans have 2 masonry heaters, masonry stove and white oven. I plan on adding 2 more 24x24 sections. Once we finish cottage and sell current house. A note about taxes. Here they don't charge taxes till occupancy permit is issued. So current house must be ready for sale before getting occupancy permit up north. It is cheaper to renew building permit than pay the taxes.
Michael, Can you speak again of the costs of building a 2000 sq foot one story home 3/2, and a 2000 sq foot two story home 3- 2 1/2, as an owner builder.
Nice design
What banks finance owner builders. Having trouble trying to find a bank in sc
Thanx for the 2024 update!
I'm considering building. I'd like to save some money by doing some of the work myself.
I am a novice who has a basic understanding but very little actual experience.
Would you comment on some realistic ways I could lower my costs?
Excellent information. Would love for you to help guide me to build a home on my lot in Orlando Florida. Thank you.
Question for you Michael- at what point should i start asking contractors for rough quotes and estimates?
I'm trying to assemble a budget sheet to build a house in the next year but also want to have relatively ball-park estimates for some of the major projects to get a sense of how much I should allocate to each.
Let's also mention how much money you need to put down to even build as an owner builder...
Shouldn’t the tax estimation also include fica tax of 7.65% for w-2 or double that for self-employed? I know calculations become more complex because you might hit the ssn tax limit. Nevertheless, that makes savings even greater. Do I miss anything regarding it?
Thank you Michael! Excellent topic and video. If I could free up$10k per month to build my own home while working fulltime. I wonder how long it might take me to build my dream home.
It took me 8 months I was working part time at Autozone in the evening and came back at night and worked on the house for 3 hours and weekends and subcontracted a lot of the work
I am looking at building a new home starting in 6 to 12 months, question about the Owner Builder route, is it legal to hire a project manager to work with you, someone that might have some experience with building a home but at the same time is not a general contractor, or, heck if they are a general contractor it would probably be even more helpful.
I am just very concerned about doing the role of Owner Builder, because of recent problems with a pool that I have had put in at my current home, and I used a pool contractor. I am currently working my way through a complaint with the state board of contractors, the complaint being against the pool general contractor, I can't imagine if I had to do this with each of his subcontractors.
What you first would do is check with your county and city to see if they allow a homeowner build where you are located. Next make sure you are not in a homeowner association area. Then go pull the permit with your name and someone you trust on it, just in case you are are not available when the inspector comes by. But normally you should be the one that schedules the inspector to come by. Go for it! Oh by the way always pay with checks and place on the memo what is was for, and put paid in full on the memo once the amount is agreed, this is to protect you just in case the person claims you didn’t pay the the amount you both agreed to, because once they cash the check it becomes legal and binding, I had someone try to scam me, but I reminded them that they cashed the check and that they got what we agreed and don’t invoice me again and they were shocked that I knew they were up to some scam, pray up and Go Be Special!!!
@@jackieburch6875 @jackieburch6875 Most of this is good info, the county where I would be building does allow for owner builder, I would absolutely not buy a property within an HOA area. Always paying by check or some way that creates a payment trail, like credit card if the Subcontractor accepts credit card. Inspections and such, you are correct that I, as the owner/builder should be scheduling, I had not thought about having a second person in the documentation for those purposes. I was unaware that it had to be the person listed on the permit that needed to be there for inspections, I know that is not the case where I currently live, but it could be where I plan to move and build.
All that said, it doesn't really address my question, as an Owner Builder, is it legal to hire a project manager that can act as an advisor, someone that while not a general contractor,.would have some experience with building a house. Like maybe someone that had worked for a general contractor as a project manager building houses, someone that had a clue what to do, and when to do it, and perhaps contacts with subcontractors, mainly, a person to give guidance.
One piece of info that you gave that is incorrect, I also thought this before I became a bookkeeper, and before I took business law courses, the paid in full on the memo line does not have any legally binding power even if they cash it. If there is a written contract in place, that says you agree to pay 10,000 for X, Y and Z. They have done X, Y and Z, and you give them a check for 5,000 and write "Paid in full" on the memo line, they cash that check. You still owe the other 5,000, they can sue for that 5,000, and unless you can prove you paid the other 5,000 at some point, you would have to pay.
What jobs would you recommend people do with no savings 5k in debt but want to save up for a build your own home in a year or two…. I have 5k in debt but I want a job that would be as Similiar as possible to the day to days task of building your own home every 2 years. Maybe I could gain experience on that job and use it as a discount on a loan for experience …thanks for the feedback
Hopefully something above 1k-2k a week for 1.5 years more or less for proof of income