Questions on Building a Home

[btq96r]

51 minutes ago, quietguy said:

The Joelton area is a hidden gem.  I have seen several properties that were great values in the last few months.  

My #1 reason for liking Joelton is that it seems to be the one large area that isn't being pegged for major development as the Nashville Metro expands to handle the influx of people coming to the area.  Still affordable land out there, which is why I want to act sooner instead of waiting a few years.

[eRay]

30 minutes ago, btq96r said:

My #1 reason for liking Joelton is that it seems to be the one large area that isn't being pegged for major development as the Nashville Metro expands to handle the influx of people coming to the area.  Still affordable land out there, which is why I want to act sooner instead of waiting a few years.

I agree, this is the time. Interest rates are going to go up and housing prices are rising. Land around Nashville is going to become harder to find.

[Sam1]

You need to have a general idea of where you want.  Williamson county, you have to have 5 acres of land for the house, or the house is required to be in a subdivision.  That's just a single aspect of thousands that need to be considered.  Then you have the concerns for HOA if in one, county/city taxes wherever you go to (property taxes in Davidson Co. are literally 200% of what they are in Williamson Co.) etc.  Make sure you're willing to go through the headache of building, there's no possible way I would do it unless I had the expendable cash to pay for everything without getting a mortgage.  I'm in between Fairview and I-40, right at 30 minutes from the garage to West End (used to work there).  Was only $212ish for 2500 sq/ft on +/-1.5 acres.  Fairview is an investment right now, as many people are leaving Franklin and moving out here because taxes/property costs are getting ridiculous.  Heck, I bought this in 2013 at $212, had it reappraised for the divorce last October and it came back in at $270 and it's up to $285 now.  If it hits $300 in the next two years I'm ejecting and moving further out in the country to get more land.  That is with no renovations or upgrades at all.  So, the location is extremely important... You don't want to move in somewhere that has already reached its peak value.

[peejman]

56 minutes ago, Sam1 said:

You need to have a general idea of where you want.  Williamson county, you have to have 5 acres of land for the house, or the house is required to be in a subdivision.  That's just a single aspect of thousands that need to be considered.  Then you have the concerns for HOA if in one, county/city taxes wherever you go to (property taxes in Davidson Co. are literally 200% of what they are in Williamson Co.) etc.  Make sure you're willing to go through the headache of building, there's no possible way I would do it unless I had the expendable cash to pay for everything without getting a mortgage.  I'm in between Fairview and I-40, right at 30 minutes from the garage to West End (used to work there).  Was only $212ish for 2500 sq/ft on +/-1.5 acres.  Fairview is an investment right now, as many people are leaving Franklin and moving out here because taxes/property costs are getting ridiculous.  Heck, I bought this in 2013 at $212, had it reappraised for the divorce last October and it came back in at $270 and it's up to $285 now.  If it hits $300 in the next two years I'm ejecting and moving further out in the country to get more land.  That is with no renovations or upgrades at all.  So, the location is extremely important... You don't want to move in somewhere that has already reached its peak value.

Be very happy you're in a market like that. I bought my house 9 years ago and I'm not sure I could get my money back if I had to sell it. 

Which is certainly another point to consider.... Its long been said that a house is your best investment. For me, it's been the opposite.  I made 0.7% return on the purchase price after 7 years in my first house, not including the thousands we spent on upgrades.  As I said above, I'd be happy with 0% on the current house. The market here is improving, but it's really slow. 

[bersaguy]

1 hour ago, peejman said:

Be very happy you're in a market like that. I bought my house 9 years ago and I'm not sure I could get my money back if I had to sell it. 

Which is certainly another point to consider.... Its long been said that a house is your best investment. For me, it's been the opposite.  I made 0.7% return on the purchase price after 7 years in my first house, not including the thousands we spent on upgrades.  As I said above, I'd be happy with 0% on the current house. The market here is improving, but it's really slow. 

I have had a few folks in the real-estate business tell me that there are many houses that actually are worth more if they were torn down and the person sold bare land because the house brings down the value of the land it is built on. Don't know how true it is but I can see in certain instances that could be a fact.

[ReeferMac]

On 4/30/2017 at 1:13 PM, peejman said:

Have you already investigated financing?  If not, do that first. I strongly recommmend no less than 20% down, and be certain the payment is comfortable. Don't plan on future income increases, its no fun all feeling financially stretched month after month.  

You also can't really compare rent payments to mortgage payments.  Houses are expensive, there's always something that needs done and it's rarely inexpensive.

 

It's a HUGE PIA!!!! We are also looking to build very soon, so I find this thread quite interesting!

We purchased  a plot of land about a year ago, still working on the financing aspect(s) to getting a house built (that, and the missus' thinks we can afford about $100k more than I think we can afford, so there's not a lot of forward motion yet!)

That being said, you are going to need AT LEAST 20% down, probably more, constructing a home is one of the most risky ventures for a bank to lend money on. We are being quoted 85% loan-to-value on our property as downpayment (where we have +30% equity), so we're not able to get the full amount down. On top of that there was $12-15k in fee's and other crap I didn't quite understand, that's on top of those numbers (e.g. banker's profit paid up-front!), and this was all from a goobermint subsidized lender (who currently holds the land mortgage and knows all our numbers), FarmCredit. The banker I talked with suggested that commercial/private banks would have even higher collateral requirements, even as high as 50%!

You will have to use a builder that they approve, insured and bonded out the wazoo.

From what I can tell (having only taken tentative steps thus far), for the average schmuck, it's best to find a builder familiar w/ all the ins-and-outs, and work with them (let them bring the banker, architect, plans, etc.)

Prepare to bleed massive amounts of cash.

If this is your first home-owning experience, might want to just buy someplace already built, unless you've got your heart set on a plot of land (as in our case, the location was primary importance, dwelling secondary).

 

- K

[E4 No More]

If you are a veteran there ARE companies that do 100% VA Construction loans. They have different income-to-debt ratios than if you were buying an existing home, but it's doable. Nations Lending is one such company. Call Ryan Workman at 615-349-4052 if you're interested.

I know this because I looked into it but I found a new construction home that suits our needs.

[Sam1]

See Refer's message above about the hassle.  I considered building a new home for about 30 minutes and after researching online, that idea went right out the window.  Even getting a VA loan like SW said above, it would have still been a nightmare for my situation.  The only way I would honestly do it is if I had cash on hand and didn't even have to finance the mailbox.

But it could be different for you if you are looking to buy your final home and never move, you may just want things a certain way and in a specific place.  However, whatever you have thought of has already been done somewhere, you just have to do some looking and be a little flexible.

Edited May 2, 2017 by Sam1

[peejman]

Once you pick a contractor, watch them like a hawk. Go to the site every day to go over plans, and inspect the work. Don't hesitate to make them fix or redo things you don't like, it's much faster/easier/less expensive to address it now than later. Remind them that you are both the customer and the boss if necessary. 

[raildog]

If you are not married and plan on getting married don't build a house till after the proposal you will end up selling it and moving built the house of my dreams now it is a rental property the single guy who is my tenant loves it and says it's the best bachelor pad ever