Building New Home With Cash, NO DEBT - Advice Appreciated

[walker450]

I am kicking around ideas on how to build our new home debt-free. The best one I can come up with is to build the garage part of our new house first and finish it out inside like a house. We would live in it while we save for the house. When we have enough money to get the house "in the dry" I would start on the construction of the house. It would be much easier to do more of the work myself when I simply open the door and there's the house! With our income and house construction costs, the drying-in stage could be started two years after moving into the "garage". Once dry-in is complete, I think I could have the house complete within a year. I have to keep a realistic time schedule since I do work full-time and have a family.

The "easy" way to build this house (and the way most people suggest) is to simply take out a loan and hire a builder. However, I do not want to go into debt and I also want to do a lot of the building myself.

I should be able to have our house complete and still be totally debt-free in 3.5 to 4 years. Once we move into the actual house, I'll remove the interior walls in the garage, pull up the flooring, and install overhead doors. I will install a mini-split unit to heat and cool while we live in there, so that will stay and I will have heat and air in my garage, if needed.

The garage as planned is 25'x32' (outside to outside of stud walls). The way it connects to the house makes it a good candidate to build first and connect to the house later. You can see my crude 3D model below:





I have some ideas to keep it "temporary". As long as it will pass inspection, I can use screws to attach the interior walls to the trusses and concrete floor. I won't mud and tape the joints to the ceiling and just cover them with cheap wood trim. For the overhead doors, I will frame them and put the proper herder in place, but then build a stud wall that fits in the opening and screw it into place. Would drywall over and just cut the drywall when it's time to disassemble.

For the outside, I could use an affordable siding material until the house is complete, then we can have the garage bricked when the house is. For the roof, I would install cheap shingles and then have it re-shingled with the same we put on the house. This is a maybe, I'm not sure how different the shingle will look two years down the road. There may not be enough of a difference to worry about.

One problem I'm not too sure about it using siding now and bricking later. The eaves would have to be re-done to accept brick. I believe it doesn't matter on the windows...

As far as my experience goes... I have had a hand in every part of the construction process and have a very good understanding of building science and techniques. My future neighbor is a retired home builder and we have talked extensively about this and I have his full support. I'm sure he will prove to be an invaluable resource to have close by.

As far as help goes... my wife and I each have a large family. I have architects, engineers, and HVAC guys on my side. She has plumbers, concrete workers, electricians, and general contractors on her side. We could build the house from the ground up just with family. Now getting everyone's schedule to work out would be the main problem... But I do have people with expertise to consult with.

Any advice or suggestions are welcome. If you are just going to tell me to take out a loan and hire a builder, you have missed the point.

 

[bandaidmd]

Here in the peoples republic of Maryland they won't let you do it that way, at least if your honest about your intentions. You have to complete the project before they will issue a occupancy permit. A mobile home on a temp permit while your building is usually allowed and it's way more pleasant then living inside the middle of a construction project.

 

[kevincook]

If you have the space I would consider building a barn with an apartment. You can then rent the apartment when you move into the house.

 

[cartod]

Do you also plan on working a full time job?

 

[Gary Fowler]

I have seen couples do similar but not with kids. It will get a bit cramped with the whole family under foot in a garage and then you need a place for tools and supplies (what the garage usually holds after getting a house dried in.
I would suggest rather than do the garage and rework it later, save enough money to get the plumbing, foundation, walls, roof and insulation completed, in other words the whole house dried in. Then start working on what you can do to put in wiring, dry wall, trim, etc. Painting is a big money saver if you can do that yourself also. One of the major cost of a house is the kitchen cabinets and counters and I don't know how handy you are with that, but good cabinets really make a house look nice as opposed to shoddy work.
I did my house using a contractor but I paid cash as he went. I think the payment for dry in was about $50K but folks say I got my work for almost free compared to other parts of the country. The bid was for $189K for 2308 sq feet of heated space and about 4400 under roof. We went a bit over that as each part of the house had allowances in the bid for windows, doors, cabinets, kitchen appliances, lighting etc. We splurged on the kitchen cabinets and appliances and more than doubled the allowance, put in more insulation than allowed basically did everything we could to make it more energy efficient. We saved money on windows, doors, lighting, ceiling fans and flooring because we bought everything ourselves and shopped for bargains.
I know a lot of folks that have done as you plan and after finishing it up, say they almost ended up divorced. It is a lot of stress on a family when doing what you plan.

 

[Fi-Q]

What I've done is that build the house weather tight the first year, and i finish the basement ( stained the concrete slab, dry wall , basic cheap bathroom and i build kitchen cabinet out of plywood. The next year i finished 90% of the exterior, done a lot of landscaping and build a baby barn. I have been working on the road away from home cut in time off cause we had 2 other kids since... Anywya been living in the basement apartment for 5 years with 3 kids. It have done a decent job, and it is home. i saved a lot on interest because of the smaller mortage. I should complete the contract I am working on since 1 year in about 1 month or so, and planning on taking a few months off the finish off the house. I won't be debt free but I figure I will have 150 000$ less ont the mortage than If i would have contract the whole thing 1 shot with a 95% mortage. The good thing about the finish basement is you are not livin into a construction on going project where tools and saw dust are all over. And once we move upstair, there is the possibility to rent the basement apartement .

 

[9973720wb19]

you should understand that the plans and a detailed budget go hand in hand, its easy to get caught up with the plans. whether you at as the GC or build and get subs for the mechanicals, you should have actual written proposals and agreements for each and every part that goes into the house. where people get into trouble is that don't add 10 to 15 % contingency allocation to the total budget. don't think you will not have overruns or change orders as you build. also there might be county and government fees. when i built my house, while digging the basement, we hit a natural spring...that cost 8 grand to correct. there will be things you will not think of that will come up. and i can't stress enough that the better and more detailed your plans and the associated notes will help. subs love to point out what you missed on the plans when they did their bidding. I would have a bidding process getting 3-5 bids for each aspect. take a close look at the lower bids to make sure they included everything. if you're going to do - let's say the framing, make sure whatever material you leave on the job site is secure.

 

[WM75Guy]

Being involved in the construction can be very rewarding but also very frustrating on a marriage and family. When I retired the first time I was a fire inspector and often filled in as the Building Official. When we built our last house out in the county there were no codes to follow and the only inspections were the septic by the County and 3 inspections, a slab, rough and a final, mainly for the mortgage company, by a private inspection company. I designed it, contracted a GC to build it, and I inspected it almost every day. We have been very happy with the house and have not had any problems in the five years we have been here.

Since you referenced it having to pass inspection talk to the Authority Having Jurisdiction (AHJ) about the permit requirements and limits. If you are required a building permit they have a time limit to complete construction, usually 1 year but can be renewed for additional cost. The AHJ may have minimum zoning requirements such as exterior material, square footage, and having to have a two car garage just to get the permit. If you have to permit it all up front you probably will not be able to occupy the structure prior to final inspection. If you have to follow code every sleeping area has to have an escape window, smoke detectors, minimum HVAC, and proper plumbing for the bath and kitchen areas.

If your plan is for five years these costs up front may be more than the interest on a construction loan. I would talk to the bank about that option. It may get you in the house faster and with less overall cost. I got a construction loan at low interest and you only pay interest on the amount you draw. We ended up taking out a mortgage to cover the balance after we finished the house but we also built stables at the same time. Also the cost of materials almost always goes up, never down. Over five years your cost increases could be significant. One hurricane can drive the price of lumber through the roof just when you want to do framing.

Good luck, it looks like a really nice house, similar floorplan to ours. Here we were almost complete with construction. Let us know what you find out and keep us informed on progress.

 

[SPIKER]

Like others said already it is a lot of work, having family to help is good but sounds like that is going to be rather unreliable at best. I am on the side of get the construction loan to get the basic structure dried in ASAP. Hire the family members that are qualified to do as much of it as you can and if possible act as the GC yourself (if codes aloud it in your area) otherwise maybe the family member as the GC.

Going back and RE-DOING everything is going to cost a lot more in long run and cost in time and stress on family as well... This coming from a Been there STILL Doing it guy...

Mark

 

[Stimw]

You used to be able to buy a house kit from Sears and Roebuck and put it together yourself!
But now we is all educated and too stupid to do it ourselves cheaply and efficiently.
Besides there are mortgage bankers starving in this country.
I removed a 35 year old mobile home and replaced it with a new Manufactured Home size for size.
It took my county 5 weeks to approve my permits after having to jump through a bunch of hoops including a "Tree Survey". (I had to have enough of the "right" trees including the right size)
So good luck with your dream but I think the odds are against you.

 

[blueriver]

I did not read all that was posted .. It just happen to catch my eye ... In 1989 .. I know things are different today ... I bought an old live able single wide set it up for my family and started building a home as cash provided ... 2 yrs later we moved in and the home was paid for .. Then sold the mobile home for more than I paid for it ... If your mind set is to do it .. You can and will

 

[dave1949]

Houses with your general design often have a laundry room and 3/4 bath in the portion connecting the garage to the main house. It's not a bad permanent layout.

If your plan is like that, or you could use one that is, then building the garage plus that connector--with laundry and bath with a shower--would make a lot more sense. The plumbing you pay for is permanent. It leaves more space available in the garage which I think would be nice with kids.

 

[wolftree]

Consider making the garage upstairs/loft into an apartment rather than the creating, then tearing out the lower level. Having the lower level garage free for work and storage. If you can, enlarge the garage to 36' or even 40' by 25'.

 

[oosik]

We timed our move down from Alaska at just the most opportune time. We got max value for the house and were able to plow all the profit into a new house here on our 80 acres. In those days the gov gave you the opportunity to avoid tax on home sale profit by using this profit to build another home of equal or greater value.

Anyhow, I built this house and did everything except the foundation. We started in May and finished in mid October. Our first shower was by candlelight because I didn't have the electrical back to the bathroom yet. We lived in a log cabin on the property along with all the mice, chip monks, pack rats - took baths by swimming in the lake and started work at sunrise every day and quit at sunset. It was a wonderful time.

 

[PastTense]

Tell us more about the area where you will build your house. This country ranges from "nanny state" to places where people have the right to do pretty much what they want with their property and it's not clear where your area fits.

 

[TnAndy]

I did not read all that was posted .. It just happen to catch my eye ... In 1989 .. I know things are different today ... I bought an old live able single wide set it up for my family and started building a home as cash provided ... 2 yrs later we moved in and the home was paid for .. Then sold the mobile home for more than I paid for it ... If your mind set is to do it .. You can and will

We did the same. Bought a reasonable cheap mobile home, moved it to the site and lived in it while building the house. I would either do that, or build a separate, small quarters for living, and later turn it into a rental or in-law quarters or guest house.

However you decide to go, CONGRATS on the gumption to avoid the mortgage trap ! We've been mortgage free for 30 years, and you'd be amazed at the other stuff you can do when you aren't weighted down by debt. MORE people should go this route. In our 43 years of marriage, we've owned two personal homes, and built both of them ourselves.

 

[300UGUY]

You need to see what the zoning calls for. I bought my house cheap, it needed a lot of work, that was very stressful, living in the middle of a construction project for years. It makes it hard to get things done. I'd look into a mobile home for starts or get a mortgage. You can always pay off the mortgage early.

 

[jel1988]

I've built a number of garages with living quarters upstairs. Build the garage one year for the customer, come back in the second and third year to take care of jobs beyond the customers capabilities. In fact, I would like to do the same thing for my winter home but the HOA has a different agenda.

 

[s219]

I wish you luck, but having just built a house ourselves, I'd say you sound way too optimistic and a little naive!

The only way I'd consider doing something like this was with a detached garage that had an apartment up above. Build that first, then move into the apartment while you chip away at the house. The main reason I say detached is that you will be able to get it done and satisfy all building codes and get an occupancy permit. The work on the house can be completely independent and not impact your living quarters (or your marriage). And you can make use of the garage below to store tools, materials, etc. Connect up with a breezeway later on if needed, or leave it detached.

 

[westcliffe01]

I assume, looking at the plan, that you do not live where it snows ? Those intersecting roof lines would be a killer for holding snow and ice dams...

Many have commented and I have spent a long time investigating locations with little in the way of restrictions on building timeline and permitting process. There are still places where you have relative freedom, but fewer and fewer all the time and definite actions being taken at local government level to introduce code and the "cash cow" inspections and permitting that goes along with it. Last but not least, local government are simply addicted to having their nose in your business and you having to ask permission for everything - which means the opportunity to say NO every time ! If you read the minutes from council meetings, many of the conversations are highly stress inducing (stress being when you have to exercise the full force of your willpower to NOT strangle some stupid bureaucrat who is having a great time denying something that is of no consequence whatsoever to anyone - like a property line setback of 50 feet that is on a precipice which the owner is asking for a 10 foot variance on for building a garage)

There are a very few places where you can live year round in a tipi if you desire, but we are talking about places that require a tracked atv or similar to get into and out of for more than 6 months of the year and everything has to be hauled in down steep trails...