Thanks for the information. I used to have a subscription to the self-storage mag, but let it expire when I sold my last project.
In our area, there is still room for more self-storage facilities, but it is definitely becoming more and more of a business, rather than just a straight rental facility.
Because the cost of entry into this business is so low, I have my doubts about any project that isn’t developed entirely on it’s merits, rather than the wishes (dreams) of it’s owners.
In any case, I want to develop a medium to large set of units somewhere in the Central Texas area. Primarily, this would be used as a first excursion into a new location for me. My plans are to build a facility large enough to sell out to the majors should I wish to do so.
In the case of the last set of these, I held them for slightly longer than ten years. They were one of the best investments I ever made.
Thanks again for your help and insights. I’m sure that I’ll post you again.
I have come across the opportunity to buy two lots in an excellent location of my home town. I have done quite a few small rehabs and am just finishing a major rehab which was basically like starting from ground zero. My question is is SHOULD I take the PLUNGE! What kind of profits can I expect. I do have my general contractor’s license. I have no idea what to expect. Homes like the one’s in this tract are running about 90 cents a square foot. What is the best way to figure my cost of building this and does anyone have any suggestions on where to go to educate myself more on how to be the general on these jobs. I realize just diving in will be my best teacher but I was hoping I could get a few tips from the experts.
DO IT DON’T DO IT!!! Mark and Ben have given you good advice. As far as the Profit in Building it is around 10%-15%…Not Good. I currently build and Invest. I will build a home with the Idea that I will BUILD, SELL, FINANCE. That way I can make it worth my while. If you are in a good new home market your home will sell. I would reccomend that you do talk to a realtor that specializies in NEW HOME SALES. I work with one that sells all of my properties. I also work ith several Realtors working other deals. The point is if you find a realtor that specialize in NEW HOME SALES they will work with other builders. Its GREAT to get the feed back on Monday for the weekends events. Well If I can answer any questions please give me a call and I will be gladly to help if I can.
Happy Investing!!
Jonathan Rexford
Licensed General Contractor
Licensed Mortgage Brokerage Business
Rexford Incorporated
P. O. Box 650099
Vero Beach, Florida 32965
Office (561) 569-4087
Fax (561) 569-0279
Cell (561) 532-0029
Pager (561)458-5658
Re: New Construction??? Should I??? Need some serious advice! - Posted by Ben in Ohio
Posted by Ben in Ohio on May 10, 2000 at 07:37:06:
Do it! Call a few Realtors in the area, get a feel for what size house. If you’ve never built it may be tricky to get a loan, but there are lenders. I would suggest buying the one lot and ask for an option on the other. That way when you sell the one house, which may happen before you’re done building, you may have a buyer for the other lot.
You cannot get into building simply to make a profit. Certainly that is one of the goals, but it is a heck of a lot more. Building homes successfuly takes time. Know what you’re goals are before jumping in. BTW, where are you located? If you’re in my neck of the woods I would partner. Either way, take a partner that knows the industry. So you split profits, if you screw up somewhere you could lose your shirt.
RC,
I was a builder for 20 years before I went full time in real estate investing. And as far as I am concerned you are better off on this side of the fence. Once I realized how easy it was to make money without going through all the hassels of building a home I shut my home buiding business down and haven’t looked back.
Most of the builders out there making money are doing so on a volume basis. So If you are talking one or two homes a year it is really not worth the effort for what you have to put into it with the little return you get. Most builders are working on a 10 to 20 percent profit at most and I would say that many of them are working closer to 10% after they pay all their costs. So if you look at it, it seems like a lot of work for that little return for the amount of time it takes to build a home.
Also if you do not have the experiance building homes you could be setting yourself up for some major headaches.
I don’t mean to be negative and I suggest you dig into it deeper before you make your final decision,
this is just my opinion.
Your advice is solid. I only build now with the intent to keep the property long term, or to create my own paper by financing the product.
Are you still building self-storage facilities? I’ve a project that I need to complete before the end of the year, and preferably by September.
I’ve owned a couple of these and I built one back in the mid-eighties, but nothing recently. Any feedback or experience that you could pass my way would be much appreciated.
I just finished four steel buildings that I have sold. I would reccommend to try to get a hold of a magizine called Mini Storage or try to get some information from the SSA Self Storage Association. I used to have there web address but I cannot seem to find it. In my area for Mini Storage is a no-no to many vacancys. Most are owned by majore Corp or held by Mom and Pop Types. I am concentrating on building Contractor Trade type buildings. The cost and rental income is pretty good. In this area we are getting $6.00 per foot. The costs are running about $25.00 PF.
Hope This Helps
Jonathan Rexford
Licensed General Contractor
Licensed Mortgage Brokerage Business
Rexford Incorporated
P. O. Box 650099
Vero Beach, Florida 32965
Office (561) 569-4087
Fax (561) 569-0279
Cell (561) 532-0029
Pager (561)458-5658