but…….when do you get some sleep?
ok - so this is the second time I've run into the ":don't build" advice this week
Which is ironic because we're renting here in the new town and looking to buy - or possibly build in about 10 months
This is a fairly strong market with projected growth so I like to think we're dealing with rep's / builders that aren't going to make fundamental mistakes or two to get one over on you,,,,
The company uses a kind of iterative review schedule with the clients (that's probably common though) and guarantee completion in 5 months
I'll check back in tomorrow but would love to hear more "lessons learned" from those who have had homes built...
On this end, after looking at online feedback - the only negative comments I can see is that one of the two companies for that neighborhood was slack with their follow-up schedules once the home was finished.....
oterhwise, I'm not hearing about design / material / build issues
In a strong market is when you really have to watch what is going on. Right now you're dealing with shortages of all the tradesman so a lot of them are hiring anyone who walks in the door. Builders with bad finances can usually keep rolling through a hot market, they fall apart at the end of it. Also everyone is stretched thin because they are building so much, that means attention to detail starts to slip, people start cutting corners, they substitute out materials, etc. A hot housing market in a lot of ways is the very worst time to build a house. You will pay top $ for lower quality and when the tide turns (which it always does) you're equity is going to take a hit and if you're builder turned out to be broke, they won't be there for issues with the home. Those are my 2 cents.
+1. Bought a home about 90% complete. Made a few changes but nothing too demanding to the contractor. However, had some issues with some things they did before we bought the home. Part of me wants to see what all they are doing during the process to make sure it is being done correctly, but the other part of me wants no part of the process of building a home from scratch. It's a major pain in the rear and can be one of the most stressful experiences of your life.It's basically impossible in the OP's scenario, but if you're looking to move into a new home subdivision it makes way more sense to find a mostly constructed spec home from a reputable builder with an acceptable floor plan and then pick out how it's finished. Kind of a semi-custom home.
In a strong market is when you really have to watch what is going on. Right now you're dealing with shortages of all the tradesman so a lot of them are hiring anyone who walks in the door. Builders with bad finances can usually keep rolling through a hot market, they fall apart at the end of it. Also everyone is stretched thin because they are building so much, that means attention to detail starts to slip, people start cutting corners, they substitute out materials, etc. A hot housing market in a lot of ways is the very worst time to build a house. You will pay top $ for lower quality and when the tide turns (which it always does) you're equity is going to take a hit and if you're builder turned out to be broke, they won't be there for issues with the home. Those are my 2 cents.
Sold flooring during the last housing boom. That one claimed people on every point on your scale. The largest home builder by volume in Louisville, McBride and Sons homes was wiped out. Plenty of custome home builders were wiped out. Plenty of remodelers and smaller scale contractors were wiped out. It's not your scale it's your finances. McBride and Son came in from St. Louis and started buying up every piece of land for subdivisions in 2003 or so. They paid top dollar for everything which was fine for a while. Then when the building started to slow there wasn't enough cash from construction and lot sales to service the debt so they went bankrupt. The group that John L Smith was tied up in had the same problem. A lot of custom builders just got extended with too many unsold spec homes that were suddenly only worth what the builder had in them or less so even if they sold one that one wasn't contributing cash to help service the debt from the unsold ones. They went bankrupt too. Smaller contractors just end up with a bunch of liens from subcontractors like their friendly flooring company and get tied up with so many small claims court judgments that they file bankruptcy to start over. One of my favorite Warren Buffett quotes spells this all out in common language "Only when the tide rolls out can you see who is swimming naked"That's damn fine input actually - thank you DU-GATTA-TUU ...
(phonetically that's how I see your screen name in y mind.... when I try to say it....it sounds like some kind of lost Navaho chief or maybe a secret prison in Turkey)
I really like the point about their possibly having bad finances and "rolling through" a hot market ---
Let me ask this though --- I honestly don't know very much about this world and need to get smarter fast......
When we say "builders" --- we could mean totally different things, right?
It could be some old geezer in a pickup truck who hires strangers and his Schlitz-Drinkin-Buddies
OR
It could be a more organized business entity with business professionals up front, project managers and engineers and a very large work force that's more ..... "official"
However I would assume that both instances could present unique risks / rewards?
Also - I think there are different levels of "Building" a house, right?
((I know -- I'm using way too many words but bear with me -- I need to start with a foundation and work through this from the ground up..........see what I dix there?))
Example A - you aren't building ANY thing -- you are picking a fine home in scenic Middlesboro, KY and buying what's already there....
Example B - you are working with a team that offers customization and modular options for 3 or 4 basic design layouts -- they provide an iterative design /build process so you are checking in periodically and ensuring that you get what you want --- lead time on materials and construction has been solidified into a very predictable and repeatable process (mature organization)
Example C - there's NOTHING there and you are handling all the coordination with multiple contractors etc .... you are the program manager AND the financial analyst (and probably the bartender)
-- I THINK the serious heartburn comes from "Example C" - right??
-- We're about to go through is "Example B"
I have questions I can think of from a contracts/project manager POV -- but my industry is Aerospace/Defense --- and I'm not handy at anything (expect guitars and the Sex)....so I"m struggling to come up wth good intervention questions
Thank you again for helping with this -- I think I already have some ideas on how to approach this
Good thread
PS: Your University of Kentucky football team is going to see 8 wins this year .... I feel it in my bones, loins and deep within my 4th eye ......the world will NOT see it coming......AHHHHHHH BUT WE DO!!!!! I HAVENT BRRN THIS EXCITED ABOUT A FOOTBALL SEASON SINCE I ACCIDENTUIALLYS ET MY YARD ON FIRE WHEN STEVIE GOT LOOSE~!@@!!!!!
Sold flooring during the last housing boom. That one claimed people on every point on your scale. The largest home builder by volume in Louisville, McBride and Sons homes was wiped out. Plenty of custome home builders were wiped out. Plenty of remodelers and smaller scale contractors were wiped out. It's not your scale it's your finances. McBride and Son came in from St. Louis and started buying up every piece of land for subdivisions in 2003 or so. They paid top dollar for everything which was fine for a while. Then when the building started to slow there wasn't enough cash from construction and lot sales to service the debt so they went bankrupt. The group that John L Smith was tied up in had the same problem. A lot of custom builders just got extended with too many unsold spec homes that were suddenly only worth what the builder had in them or less so even if they sold one that one wasn't contributing cash to help service the debt from the unsold ones. They went bankrupt too. Smaller contractors just end up with a bunch of liens from subcontractors like their friendly flooring company and get tied up with so many small claims court judgments that they file bankruptcy to start over. One of my favorite Warren Buffett quotes spells this all out in common language "Only when the tide rolls out can you see who is swimming naked"
understand and agree on the "scale" vs "finances" -- kind of a quality vs quantity thing
I remember seeing new neighborhoods popping up like under-timed toast all around Atlanta......eventually there were derelict neighborhoods in the suburbs where the pace of building exceeded demand and the unfinished areas were just left vacant (that's when I got into urban exploration with another Northrop Guy and learned how creepy it could be)
what about projecting demand out 10 or more years?
are the builders and firms typically honest about city wide data on where growth is occurring and where the infrastructure limitations are etc?
they're probably less willing to give out information on their own quality data right?
is it kosher to ask about any quality issues or trends they're seeing with their recent builds in a given area?
I'm thinking "Good question" but
"Good luck" getting an honest response
right?
We're headed out in about an hour to look at more homes/neighborhoods actually - this is good timing
3. Nobody ever said you had to question everything the contractor says....nor did I say you have to know everything about the job.....I said to be around.
Have fun with this one, contracted a builder, gave him first draw for foundation and framing. He quit building and filed bankruptcy. Never did anything.
There are twelve others that homes are half built and not much paid that have liens on. They are in worse shape