Hello all! I’m mulling over the idea of building some low cost 1 story 3 br 2 bath spec. houses here in New Orleans. I can get lots for infill cheap($5000 or less) and was shooting for a final price in the mid 70’s. Do you guys think it’s possible to make money on these? I’d be doing most of the work, subing out plunbing and elec. I haven’t got the exact floor plan figured out yet but I want to keep it on multiples of 8 (ie 24’x48′ foundations). I’d like to speed up construction using roof trusses and metal roofing. Any advice? Am I crazy? I don’t need to make alot of money and I love working for myself.
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run the numbers and let's see..
. it's your plan ... put the numbers together, including a labor rate for yourself.. which of course has to mean paying your total income while you're working on them
Lots for $5000 are you joking?
Well, look at it this way-
If you want to sell them for $75,000, you'll probably spend at least $15k in closing costs, loan fees, interest, title transfers, commissions, etc. - that leaves $60,000. Take out the lot at $5,000 and you're at $55,000. If you made the house 24'x48', that's about 1150 SF, so that's about $48.00/SF to build them and make a profit. Depends on how much money you want to make a year, how many you can build in a year if you're doing all the work yourself, etc. You've gotta look at it a couple different ways- if you sub more work out, you'll pay more that if you did it yourself, but you may be able to build more houses per year.
I don't know about LA, but in NJ, you can't build much (if anything) for $48/SF. But then again, you also can't buy lots for $5,000- more like $75-100,000, and you can't buy a house for $75,000. So not really much to compare to. Only you can decide what'll work for you. Personally, I'd love to do just what you're talking about for a living. Unfortunately, I don't have $100k in the bank to buy a lot though.
Maybe I need to move to New Orleans and buy a couple of them $5k lots. Nah....too humid...lol.
Bob
Spoon I think I know what neighborhoods you're talking about and if I'm right you will get about $50 per sf finished. I live in Destrehan and most of my work is in Metairie and New Orleans and I can tell you that you will have a real hard time finding skilled workers to help you.
I do remodeling and complete most of the work myself because of the labor problems in this town. All of the good trades men are either working for themselfs or have moved out of town. I don't blame them as the going rate for a good carpenter here is $8 to $10 per hour. You can make a lot mork working for yourself as a remodeling contractor so why work for others at that price.
If you're not a contractor you will have a hard time getting permits in Orleans parish and if you sub the job out to a general contcactor you can expect to pay around $89 per sf for a spec home that size.
One other thing, I have a friend who tried to purchase lots in Orleans parish for around what you're paying but after she found out she would have to pay the back taxs on them she backed out because the price was more then double. Do your homework and don't trust the seller check to make sure you can get them free and clear of any tax that may be owed on them.
busta :0)
Edited 2/18/2003 12:44:06 AM ET by busta
I hear what you're saying about the labor problems, I'd probably import labor from Ky where I used to work in January (next yr). I'd build the foundations and have the plumbing/gas/hvac roughed in when they arrive. Toying with the idea of building the walls off site and siting them up with a crane. I could have them mostly complete with siding,insul.,windows,drs,and even most the drywall. My crew would just tie everything together, add the roof trusses/decking/roofing, and help out with finishing the drywall and other misc. Maybe three houses in a month. I'd do most else alone or with day labor hold- this-here types. The weather up north idles alot of hands, and timing the end of their stay to coincide with mardi gras won't hurt either.
As proven by the Leviton communities built in the late 40s, I think, a small profit per unit can lead to large incomes if you can make the building an assembly line process. The builder came up with a very few variations, many were just mirror images of the one next door, on a single house and built it over and over. They could complete one, from what I understand, in well under a week.
Crews would work down one side of the street and then up the other. One carpenter who worked on them claimed he, after building the same basic design for months, could build one in his sleep. Familiarity creates efficiency. Derided as cheap cookie cutter houses they were financed to war vets.
Despite being made quickly many of them have survived to this day and are still occupied. I'm not sure most of what is being built today will last as long.