I started my family homebuilding business back up in 2018 under a new name. My grandfather built homes since 1956, built the home I grew up in and took pride in his work. I had a home built for my family by a corrupt, abusive, unprofessional builder in 2018. It failed 18 pages of a 20 page home inspection and he put a lien on it to preven me from selling it. The way he treats his customers and the bad home he built inspired me to go into business, do things right, and charge for it. I sold the bad home as is 2 years later and it was a contributing factor in the breakup of my marriage and family along with a serious illness.
Homeowners regularly build $400-$500K in the local market. The best homebuilder in the area is in his late 60s. He does at least $1M in revenue a year without advertising or having a website and is known on reputation alone. I have a tremendous respect for him but I don’t expect him to be building much longer, when he retires I’d like to take over his market niche.
I am incorporated, insured, own land for development listed with a realtor contingent on building with me, assembled team of quality trade professionals, put some signs out, and am ready to build. 90% of my leads are coming from Google. Homeowners seem to want a brand of homes and that is what I am trying to establish.
I have a family wanting to build, they own 12 acres, bought plans, cleared the home site, staked out their home, have a down payment and a bank loan. Their plan is a simple 1400SF ranch with no garage. It looks relatively low risk to build. Small kitchen, not many windows and doors, simple foundation. My price for a ranch with a garage is $175/SF which is pretty well spec’ed. I quoted $160/SF or $226K without a garage but am concerned with lumber prices. I knew all along business would take off and I’d like to get their home done and off the books this year in anticipation of bigger homes next year. I am willing to sign the contract in anticipation of lumber prices falling by fall and a market correction next year. I am willing to go down to $220K if they paint their own interior. They are hands on and want to contribute some sort of sweat equity. If I come in at $190K I will be happy. The builder who built my home charged $185K for 1450SF with a 24×30 3 car garage. He claims he didn’t make a profit but he’s a documented liar. He probably had $170K in it.
My intuition is that things are going to take off and I’m going to be surprised how cheap it actually is to build a home. Customer is ready to sign. Any advice you can offer will be appreciated. Serious illness is almost behind me and I am counting on making up to my 6 year old son having to sell his new home 2 years after I built it. Living in a model home is one of my immediate goals. Things are looking up.
Replies
I don’t want to discourage you nor do I know you, but.....
No one thought material costs (not just lumber, but most of what goes into a build) would reach the quick level they did this spring. To “guess” that they will go back to last yrs $’s is wishful thinking. Here in NW Ohio many long term bldrs are quoting T&M on new builds.
And be wary of just filling the niche that probably took that old guy yrs to acquire.
Best of luck
You really need an in depth estimate detailing each and every aspect of the home. Throwing out Square Foot numbers may work, it may even work for a long time but it doesn't tell the whole story.
Good luck with your business it sounds like you have passion. I hope you have the experience to match.
I'm not builder, but I build / remodel for myself (family has a construction business). I work in technology: I'm on a team of 5 people that run a growing business (currently 1200 people, ~500M revenue).
Here is my advice: Cut the history and emotion out of your thinking right away. Its doesn't matter to your customers if you got screwed over a dozen times in the past. If you are telling your customers about some other bad guy, you are already heading for trouble. Focus on their needs and what you can provide, not some weird baggage. I have found that those who keep talking about the baggage are the ones most likely to repeat what they say is evil.
Focus on your integrity, ability and drive to give the customers what they need and also make a profit. Make sure EVERYTHING you are committing to and negotiating is written down and signed. Set a schedule to communicate with your customers in a formal way. Be a pro. You can't build a business reputation on another guy's failures, or your past problems - you can only build it on your successes.
Best of luck to you. I hope you do really well and enjoy the process.
"I am going to be surprised at how cheap it actually is to build a home"
My guess is you may be surprised at how expensive it is to build a home. In my experience most everybody thinks they can build cheaper than average, but almost nobody can. Best of luck!
The fact that 90% of your leads are coming from Google is a promising sign of the brand you're establishing. Kudos to you for assembling a quality team of trade professionals and being fully prepared to take on projects.
The fact that 90% of your leads are coming from Google is a promising sign of the brand you're establishing. Kudos to you for assembling a quality team of trade professionals and being fully prepared to take on projects!
The fact that 90% of your leads are coming from Google is a promising sign of the brand you're establishing. Kudos to you for assembling a quality team of trade professionals and being fully prepared to take on project!
The fact that 90% of your leads are coming from Google is a promising sign of the brand you're establishing. Kudos to you for assembling a quality team of trade professionals and being fully prepared to take on projects.
You make it sound so simple. What qualifications do you bring to the table?
It's understandable that you're concerned about lumber prices, given the current market situation. It might be a good idea to discuss the possibility of signing the contract with the family, while keeping in mind the potential for a fall in lumber prices and a market correction next year.
There’s been a rash of copy/paste replies to old posts.
Where do we sign up to get a buck for every inane post?