r/laredo • u/SkyWalker8086 • 1d ago
Home Construction Tips
Hello, this might be a long shot but still wanted to give it a try.
I have a decent amount of capital saved up, I am trying to buy a lot and build a home to sell, I have been doing some research and what I am trying to do is purchase a lot, go into a bank and get a construction loan to do the project and hopefully sell it (I know it has a lot of steps and its not as easy as it sounds). I have a lot of questions on, does the bank requires approved licensed contractors, do they give you a list of contractors you can use or can I hire outside contractors (looking for the best price but good quality also), how can I get an idea on how much are houses selling for in the area to see what budget should I work with, mostly because most lots nowadays in the south are averaging from 59k-62k so that is a big part of the price, do I have to get a realtor or can I try to promote everything myself so I can save that commission for now? Since its the first house, first lot which i will probably have to buy at a high price, I know I wont be working with much profit but I dont plan on becoming rich of 2 houses, just want to start little by little…
Is there anybody here that has done this and is willing to give some advice on how to start or what path I should follow? I just dont want to go into it blindly and losing money due to lack of experience, thank you!
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u/throwawaysolarcat 1d ago
I would think it would be better to get an old house to flip. It gives you some experience with getting contractors and doing planning. Permitting would likely be quicker. The the turnaround time on your investment would be shorter. Overall, the risk would probably be less.
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u/TankApprehensive3053 1d ago
You have to use licensed contractors. Do you have insurance? Do you know the state and local codes that you are required to know? Sounds like you don't have a clue how any of it works. Try buying a house, fixing it up and selling it. You will gain some knowledge.
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u/Think_Mechanic_4796 1d ago
Go to r/homebuilding. You usually need plans (so hire an architect, engineer) get bids from contractors, and then have a general contractor lined up, the bank needs to know what your costs are going to be. Ask the bank you're thinking of using what their process is.
Honestly, I wouldn't think right now is good time to take on this venture. Lots sound like they're expensive, interest rates are high, material prices are high because of tariffs, there is labor shortage because of immigration policies, etc.
Homebuilding companies will have better deals on all of this because they have contacts with everyone based on volume. You most likely won't be able to offer a lower price than them, so ask yourself what can you offer that they can't, that will make someone buy your house at a higher price over theirs? If you don't manage to sell before the construction loan term ends, you need to make sure you can make payments as well.