Isn't That Rich Podcast

Embarking on the adventure of building your first home is not one to take lightly. At 25 years old, I decided to take the plunge and build my very first home! I hope you enjoy this read as it captures the beginning of my home building journey, from the initial decision to build rather than rent, to securing property, drafting house plans, and navigating the intricacies of permits and loans. Whether you’re in the thick of building a home right now or just needing some step-by-step instruction on where to start, I’ve got you covered in Part One of Building a Home from the Ground Up!

The Decision to Build

After moving back from college and starting my job, I initially thought renting was the way to go. However, the rental market where I live didn’t offer options that suited my needs or my budget honestly. After much deliberation and support from my parents, I decided to pull the trigger and build my own home. The decision wasn't made lightly. I spent countless hours contemplating whether to buy a fixer-upper or build from scratch. Ultimately, building a new home made the most sense for me.

Weighing the Costs and Benefits

One of the most significant factors in my decision was the cost analysis between renting, buying, and building. Renting, while convenient, often feels like throwing money out the window without gaining equity. On the other hand, buying a home involves dealing with potential renovations, especially given the limited inventory of modern homes in our area. Building a home, though initially more expensive, allows you to create a space that perfectly fits your needs and preferences.

Preliminary Steps: Property and Plans

The first step in home building is of course securing property. I was fortunate to have my parents parcel off a piece of their land for me. This involved getting a survey from an engineering firm. After the survey was completed and paid for (buckle up, there are literally fees for everything), it got recorded at the county courthouse. After the survey was recorded, I had to get a deed created with an abstract company. The deed specifies that I am now the official owner of the surveyed parcel.

• ^{Survey: $1,300.00}
• ^{Courthouse Recording: $90.00}
• ^{Deed Creation: $150.00}

The process of getting the property parceled and recorded was more complex than I anticipated. It required several trips to the courthouse, multiple signatures, and a significant amount of paperwork. I had to ensure that the property had no liens and that everything was properly documented and notarized. It was a learning experience, to say the least.

House Plans and Permits

Okay, here comes the fun part…creating a house plan! I cannot tell you how many hours I spent on Pinterest and other websites trying to fund the perfect house plan that fit my property and budget. After I found a plan that I could see myself living in, I worked with a local architect who provided an official and comprehensive house plan. This plan included all necessary details for the builders, such as plumbing, roof lines, and wall heights. At this time, I also had to obtain a building permit from the city hall – more fees ?

• _{House Plan: $750.00}
• _{Building Permit: $25.00}

The Importance of Detailed House Plans

When designing your house, consider future resale value but also focus on what you truly want. My initial plan was a simple, two-bedroom, two-bath house. I included every possible feature in the house plan, knowing I could scale back during construction if needed, i.e., I could chop off a porch if I need to save money. It’s essential to have a house plan that is flexible, allowing for adjustments based on budget constraints or changing needs.

Learning the Intricacies of Home Design

Working with an architect, I learned about the many factors that go into designing a home. We discussed everything from the placement of windows and doors to the layout of rooms and the type of materials to be used. Each decision had to be made carefully, considering both aesthetics, functionality, and budget. Speaking of budget, did you know windows were so expensive?!

Securing a Construction Loan

Switching from design to securing some cha-ching for this project, I didn’t realize how much I needed to know about my future home for the bank to consider giving me a loan. Makes perfect sense though! Obtaining a construction loan involves gathering bids from contractors to estimate the total cost of the build. These bids help determine the amount the bank will lend. I chose to get both individual bids and a turnkey bid from a general contractor to compare costs and ensure all expenses were covered. Even after I had all my bids in my spreadsheet, there will still many, many, unexpected and random costs throughout this job.

A construction loan differs from a traditional mortgage. It is short-term, typically lasting for one year, and covers the costs of building the home. Once construction is complete, the loan can be converted into a permanent mortgage. To secure the loan, I had to provide detailed house plans, contractor bids, two years of pay stubs, and the deed to the property as collateral.

Getting the Bids

You may be thinking “Why is this girl getting all these bids? Isn’t that the general contractors job?” You are correct in thinking that. Funny thing is, I am the general contractor, which means I am responsible for this entire project, including gather all those bids I mentioned earlier. The process of obtaining bids from contractors was interesting and stressful. Each contractor provided an estimate based on the house plans, and these estimates varied. It’s important to compare these bids carefully, considering not only the cost but also the quality of materials and the reputation of the contractors. For example, my concrete bid had an expiration date, highlighting the volatility of material prices.

As for now, this is where I am at in this home building process. At this point, I’ve spent $2,315.00 and a shovel hasn’t even been put to the dirt. This is just the beginning of my "Building a Home from the Ground Up" series. In Part Two, we’ll jump into the beginning of the construction process and share more lessons learned about this undertaking!