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Build Your Own Dream House!
Ailsa Forshaw

So youre thinking about building your own house, are you? Well, youve come to the right place! Its a lot of fun (hard work and eventually fun!) to build your own home and it will save you thousands of dollars(we saved over a Hundred Grand by doing it ourselves - thats pretty significant cash!). If you happen to live in a Large City, like Los Angeles, or anywhere that Real Estate Values are close-to-insane, you could potentially save millions of dollars. Interested, you say?? Read on, My Friend, Read on...!

Heres a little list of things youll need to know:

How to Get Money: Youll need lots of money! Dont stop reading! There are ways of getting financial support in order to build a house . It certainly helps if you have a swack of cash in the bank. Id say at least $20,000. - $100,000. to have as a back up - there are a surprising number of things that seem to come out of nowhere that require a quick injection of cash. The amount you will need to get in the ground is, of course, dependent on the style and size of your home.

Also, if you already own a home, youll be familiar with the territory and may have a fair bit of equity, which you can use to leverage other cash. Contact your Bank to get an Appraisal of your current home and see how much you can qualify for a Line of Credit.

Well look at Mortgages, Builders Loans, Personal Loans and Line of Credit options. Often, itll be a big ol combination of all of the money you can get your hands on in order to pull this off! Remember, this is not the same as buying a house already built, hiring a builder to build it, or buying a previously enjoyed house. Youll be completely responsible for every aspect of the building process.

To get the money to Build Your House, the Banks send out Appraisers to determine how much of your house has been completed before they will release the Draw Money -- remember the Appraiser Scene in The Sopranos?? Well, thats one of our favorite scenes -- Dwight laughed so hard he nearly fell out of his seat! If youre not a Sopranos fan, the Appraiser gets into some trouble with the Mob, if you know what I mean! ha,ha,ha!

Im sure there are some good Appraisers out there, who actually know that when the Roof is done, the Subfloor is already in place... duh! But even if you have the weeniest appraiser known to mankind, you still have to be really nice and just be prepared with your own cash to continue on with the job. We had to carry the whole project right past the Lock-Up Stage, when the banks usually release the First Draw after the Subfloor is done.

Thank Goodness we had sold our other house first, so that Equity Cash was in the Bank, because that would have been a terrible situation otherwise. So now I would advise having at least $100,000. on hand before you start your own build, just in case. The amount is variant on the size of your house, of course, and we always build big, so do the math and come up with how much you will actually need to get yourself all the way to Lock up, and have that money available before you start.

How Long Will It Take To Build A House? Typically, it can take from 4-5 months if a Big Builder is Building a relatively Small Home, and up to 2 years (I know - that seems craaazy, but it can be true, so be prepared if youre building a mansion! ha,ha!) for a very large Custom Home.

In general, if youre Building Your Own House, add a couple of extra months from any estimate for ease in your life, otherwise, your expected time-frame will be too tight and it wont be pretty!

A Larger Home, especially a Custom Home, will usually take between 6 to 12 months. Sometimes you will run into permitting delays, you cant get any Trades (if you live in an area with extreme growth or NO growth...!). Our house took Seven full months for the actual Build, but then you need to add another 6 weeks for the Permits to come through at the beginning. Also, we bought the Land a good 2 years before we actually started to build on it (when you build it yourself, you usually have to pay for the Land in Full before you can start the Dig...). I took a fair chunk of time to design the right house for this Lot, then had it professionally drawn.

We were in no hurry, because we wanted to be sure our other house was Sold before we Broke Ground, so we would never have to worry about carrying two mortgages (yikes!). Our House Sale went through in February and we broke ground on March 4th. Good timing, no?? We went ahead and got the Permits ready when the other house was Conditionally Sold.

Keep in mind that if youre hiring a Builder (Buying a Home through a Big Builder), and its one of their stock houses (meaning that theve built many, many houses in the same identical style...), that the Building Time will be much shorter than if you built on your own. Once youve built a house, its much easier to build the same thing (or even a slight variation of that same home) again, because now you know the trouble spots, and changes that could be made to simplify the project.

When we are ready to Build again, I think well sell this house first, buy a smaller place thats an easy re-sale in Town, buy a new Lot, then start another Build. Its important to look at every side before you even begin to get started, so you dont create chaos in your life. The further ahead you can plan, the better off youll be.

In case youre wondering, an easy re-sale is a house that is gorgeous but not too big and not too expensive. Big and Expensive happens to be my favorite kind of house, but not for a quick sale... and it needs to be in a really good location, preferably close to Schools and Shopping so it will appeal to young families. Also, I always choose a house with 3 Bedrooms on the same floor (Main Floor of a Bungalow or 2nd Storey of a 2 Storey home), because thats the easiest house to sell to a young mother. And by young, I mean any mother with kids at home that she still needs to wake up in the morning! ha,ha!

And, if youre really intuitive,this is already a plan I want to put into action, so I just have to convince Dwight that its time to put this house on the market, since it can easily take a year to sell a really big house...sometimes they just fly off the market, but I want to be prepared! Let me know if youre interested in our gorgeous home! Well miss it terribly, but I can always build another, right??

Hire a Builder: If the thought of having a few hundred Grand just sitting in a bank somewhere makes you feel faint, you should definitely consider Hiring a Builder. Quite often they will carry you through to the end of the Build with $20,000. down. Some really big builders will let you get in with waaaay less -- sometimes as little as $500. down. Good to really check around to see what you can get thats in your price range.

Always keep in mind that the more Custom your house is, the more you will have to pay up-front and again at the end. Makes sense, but sometimes thats forgotten.

Hire a Project Manager: I dont know how you would Build a house on your own if you were both working in a Nine-to-Five job -- Im thinking it would be next to impossible. I dont know how many times Dwight had to leave what he was working on to come out to the house to deal with one problem or another. And if he wasnt available, or it was one of my areas, I would come out. Since Dwight is a General Contractor (as well as a Heating & Air Conditioning Specialist), he was able to correct any problems to prevent delays rather than having to bring in all sorts of other people.

Hiring a Project Manager for your Build is less expensive in the long run (as opposed to a regular Builder), but you will have to have your money in order first, as you would if you were building all by yourself. You can always start out on your own, and bring in someone when and if you need them, too. Find a General Contractor before you get started who would agree to those terms so you dont find yourself stuck at a crucial stage (and, yes, theyre all crucial stages!).

How to Find Land This is key, since it can often be difficult to find land in the city that does not belong exclusively to a Developer or Builder, which means that if you buy their land, you have to hire their Builders to build your house. What you want to look out for is a B.Y.O.B. Lot (this does not mean Bring Your Own Booze to the work site!). This means Bring Your Own Builder. Thats you! It also means that you could contract the building out to an Independent Builder, who might build for significantly less than a big name builder.

Check the Internet, your local real estate papers, bargain papers (theres usually one in every city -- the one in Calgary is the Bargain Finder ), newspapers, etc., to see if you can find a B.Y.O.B. (Bring Your Own Builder) Lot or a good Builder. Its always a good idea to check out local Builders, first, in case they can build what you want for basically the same a what it would cost you to build on your own. If the difference is less than $50,000, its probably better to buy through a Builder, whether Independent or a Big Name company. You may be able to do part of the work, provided your skill level is adequate, which will knock the price back even further. Everything is food for thought when youre looking at an investment in your time and money of this magnitude. Youre less likely to get in too deep cash-wise, too.

You can always hire someone else this time around, then really watch to see how it works and try it yourself on the next house! Youll make a pile of money, either way, especially if you buy in an area with some positive growth potential! Remember, Real Estate rarely goes down in value, so its a good investment. Youll have a nice place to live and when you sell it down the road, youll make a bigger profit than most people make in the Stock Market. Plus, if the tax laws permit it, you wont have to pay taxes on the money you make from the spread (how much you paid for your house and how much it sells for). Theres generally a time frame involved in this, so check with your accountant to get the low down for your area.

How to Design Your Home: The land you buy will determine what you can build, for the most part. If youre in the city, the neighbourhood will be pre-planned, and the Developer you bought the lot from will let you know whats allowed. Many new neighbourhoods are Front-car Garage houses. Some will allow for a detached garage, or a garage attached at the back. Make sure youre comfortable with the restrictions that come with the lot before you buy it. If your lot is smaller (as most in-town lots are!), youll probably have a basic shape that you can start with (say, a long rectangle, or a square box) - check out show homes for ideas (of course, you can not copy someone elses house, but you can gather ideas for features you like to see what you want to incorporate into your own house.

Once youve got the basic shape in mind, sit down with some graph paper and start playing around with what you want in the house. Three bedrooms on the main floor, four bathrooms (because you really love prunes!), large island in kitchen - you get the idea. The other thing that I highly recommend is the Internet (surprise, surprise!). Theres a ton of information out there, and there is an incredible selection of house plans on the Net. Theyre waaay cheaper than having an Architect draw your own designs, and they will often accommodate them to suit your needs (small fee involved, but worth it if you really, really need a sauna off the Master!). The general cost of having your own House Plans drawn up is anywhere from $2,500.00 and up, depending on the house and the Architect. Perhaps youd even like to build a Walk-Out Bungalow like ours!

Extra Costs of the Land: This applies primarily to buying an acreage, since you?ll need to add about $25,000 into your budget to get the services in, but it?s good to make sure that there are no hidden costs or amenities that you?re required to pay for your lot. We really scored and found an acreage in an Estate Area that already has the services to the lot line ?- WooHoo! That?s a huge savings! (I?ll put that money towards the development of the Garden Room!)

Every so often you may come across a Beautiful Piece of Land and the Developer will carry the price of the Land with a small Down-payment until youre finished the entire Build and your Mortgage Money has actually come through, then you pay the Developer for the Land at the end. This is very, very rare. More often than not, you may be able to hold the Lot with a Down-payment until you are ready to Build, but you will have to Pay for the Land in its entirety before you can go and even get the Permits to Build. I know, I know ... its a Big Money Game, but it can be done if youre really determined. All money-related info is much better to know in advance than to discover it later and lose your shirt... you want to make money on a build, not lose it, right?!

After Thought: Well, were done the house, now, and Money was the most difficult part of the job. When you are building on your own, you actually seem to need a 3:1 ratio of Cash to Home. What that basically means is that if you want to borrow $100,000., your new home should be worth $300,000.

We were amazed at how little the Appraiser actually knew about the Building Process. We were also shocked at the tiny increments of cash that we got from the Bank. It was not done the way that youre generally told it will happen -- in three main sections -- Subfloor, Lock-Up and Completion.

We were given 10% here, and 5% there... it was a long and arduous process, and one we will try our best to avoid in any future Build. Well set up a large Line of Credit based on the Equity of our House and go as far as we can before we attempt to get another Builders Loan.

This is not to say that Builders Loans are never good -- not by a long shot. They can be the difference between being able to Build the House or Not, so definitely pursue that avenue if you need to... you might get lucky and find a really great Appraiser who does know the building process.... they must be out there!

The other very difficult part of the Build was with the First Finishing Carpenter. We found him through a reliable source and followed through the regular way. Everything looked like it was going to go smoothly until he started fighting with me about how the Kitchen Island was to be built. He did his best to pit Dwight and I against one another -- I would give him the Drawing of how the Island was to be built and he would go to Dwight to say it had to be changed. (Little women dont know nothin about buildin... ugh! What a yuck!)

Everytime I drove up to the new house and saw his truck I would feel physicaly ill -- not a good sign!

I cant tell you how many fights this caused... Finally, I said to Dwight that we needed to band together against this guy and stop letting him waste time (hours and hours at $45.00/hour...) by pitting us against one another. Dwight agreed and we went back in with a united stand. Much better.

Even after that, this guy couldnt stay on track with the work that had to be done before we could move in, so after I found another carpenter (no matter how annoying or slow someone can be, always wait til you have a replacement before you make any serious changes...I think that might go for some marriages, too! ha,ha!), I came into the house, nothing had been done, and I fired him. He stayed to finish out the day, and Dwight said he had never seen this carpenter work so hard! Now, thats funny!

Its incredible, really, how something in a relatively short time period of your life can cause so much upset -- this part was very difficult to get through, but we got through it and now it makes for a good story!

Our new Carpenter, Trevor Campbell, came in and saved the day... he fixed all of the other guys many mistakes and finished everything that needed to be done before we could move into the house. AND, he never fights with us! Its a miracle! Trevor is a breeze to work with, so we can get the work done quickly and easily -- perfect! We would recommend Trevor to anyone planning any type of Carpentry Work for their home.

As an aside, this is generally good advice for any building project -- or anything else that is a huge thing in your lives -- stick together as a unit to get the job done. Any item can be compromised on -- there is never any one item that should cause so much grief that the whole job comes to a halt. Better to resolve to like it (or not look at it!) than to waste time and money (and potentially your relationship...) fighting over any aspect of the job.

This is not to say that you shouldnt try to persuade your partner in the right direction if you know they are headed down the wrong path, but do it gently like youre steering a car around a tight bend -- go slowly and carefully so you dont run the whole thing off into the ditch!

The most important thing is to Keep the Job Going and Get the Job Done. Then Hire a Mover and Move on in -- and hopefully, Up!

Ailsa Forshaw is a Writer, Builder, Website Owner & Manager, Teacher, Mother... all in Alberta, Canada. She is Married with Two Lovely Children, and one gorgeous wee dog. Her Website, http://www.buildyourownhouse.ca, is chock full of all sorts of useful & fun information to help anyone become Financially Successful, Slim, Trim, and Happy... what more could you want?? Pop in for a wee visit! http://www.buildyourownhouse.ca, http://www.theScottishDiet.com