Thinking about doing a "custom" home build.

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falconkidding

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Falcon Kidding
Just thinking out loud and looking for feasibility/ideas.
Background i work at an airline on year one pay about 100k per year, in january goes to 140k or so depending on how lazy i am(very lazy). Currently renting a 2br apt for 2 grand a month in the east tn area.
I've been looking at houses however everything is a 1600sq ft rancher for 350-400k or something thats 2400+sq ft but 5 bedrooms 3 baths and kinda cheap looking for 400-550k. Or the lot will be super tiny.

I don't want to do "custom" like picking all the details I just want a floorplan that isn't dumb I don't need a giant eat in kitchen or stand alone dining room or 5 12x10 bedrooms jammed into the 2nd floor. Just 2000sqft 3 bed 2.5 bath with a rec room/room over garage and 3 car garage (or basement)

My issue is savings is low since covid furlough and switching to 3 different flying jobs. 20k currently probably can get to 50k by next year. Is it remotely feasible to get a lot for 100k and do a semi custom build for 400k? Or will the banks laugh me out of the room due to down payment requirements? Zero debt and 790 fica score.

Any tips/tricks/advice? I'm 35 and kids are likely in the future so renting another apartment for much longer is getting increasingly unsustainable. I've moved 6 times in the past 10 years i'm over it so whatever I buy i'm gonna keep.
 
With where everything is with building materials and interest rates, especially construction loans...I'd continue building savings. It really depends on location.

In 2012 at the ripe age of 22 I bought a 5 acre lot with 2 homes on it in the Chicago suburbs for 176k. One house, the tenants(raccoons) were evicted and house was torn down. The other I remodeled. Built a new house in the tear downs place. Had to be accessory dwelling (1000sq ft or less, under 35' tall, no basement. With the other house on the property being larger than 1000 SQ feet. Back then and doing all of the labor except for the foundation it was right around 75k just in building materials for a small house. But I didn't skimp on the roof or insulation. Standing seam metal roof(which again I installed),materials alone were about double what shingles and installation would have been. Fiber cement siding is a premium over vinyl or aluminum. All hickory floors, made from 2 trees that died or blew down during early construction. cost more, but it think the cool factor made up for it.
 
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I to am looking into drawing my own home plans, as nothing I see is what I want to build.
Then will take my sketches to a drafts person and engineer, to be made into plans. Waiting for the bubble to burst before actually starting construction though, materials are way overpriced currently.
 
I wouldn't mind building (designing that is) my own home. If I did, it would be all poured concrete and CMU construction.
 
Where in East TN are you?
We're in East TN also. We're building another cabin in Gatlinburg currently but paying cash to do it. Materials are crazy expensive now. Metal is relatively cheaper.
I don't think the banks would balk at your financing. I would ask about a fixed plus HELOC if needed when switching to permanent financing. I would be concerned about interest rates increasing before you can lock the permanent financing.
 
Whitney said:
What is CMU?
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Racerx said:
Concrete masonry unit...cinder block.
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That. I -do- design buildings in my day job, meaning utility buildings housing water treatment plants and pumping stations. Sort of. I don't play structural, even though I could. But I do the layouts and elevations.

Well, okay, these days I just make sure other people doing the layouts and elevations are doing it right. I just like my buildings to be bulletproof. And termite proof. And rot proof.
 
FORANE said:
Where in East TN are you?
We're in East TN also. We're building another cabin in Gatlinburg currently but paying cash to do it. Materials are crazy expensive now. Metal is relatively cheaper.
I don't think the banks would balk at your financing. I would ask about a fixed plus HELOC if needed when switching to permanent financing. I would be concerned about interest rates increasing before you can lock the permanent financing.
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West side of knoxville blount county area. I guess I should probably talk to a credit union or something and see what products they have I was just skeptical cause it seemed like construction loans all require 20% down.
 
FWIW, the house I'm in was built from scratch, in the 50's, based on mail order plans. From what I understand they hired the excavation and basement pour to secure a loan, and build the rest by hand. The house is really well built, and I think their plan was solid. Excavation and concrete work seems simple, but it's not. I'd hire that done for sure.

The other two bits of advice I'd have are first that it's critical to match the construction type to your local area. Here, I think you'd be nuts to not have a full basement. Slabs or crawl spaces in an area that has a >36" frost line is kinda silly. But a full basement isn't going to work in an area where the water table is just below the surface. Gable roof with a big overhang is great where there's a lot of snow...not so great where you want to handle a heavy wind load. Stucco where it's a wet as here? I'd think a bad plan. So be really careful if you go from outside the tried and true for the location.

Second bit of advice is to pay attention to the details, especially around flashing and water management, if you live anywhere where it rains. Maybe not a big deal in the southwest, but water and rot kills houses here. The details of how windows, doors, siding, trim, are critical. The same with ventilation. Trapped air is usually a bad plan. Multiple waterproof barriers are almost always a bad plan.
 
Ask the lender if it's workable.
If he says no ask him if it's workable if the lot seller is willing to subordinate.
 
falconkidding said:
West side of knoxville blount county area. I guess I should probably talk to a credit union or something and see what products they have I was just skeptical cause it seemed like construction loans all require 20% down.
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In my experience credit unions and smaller banks, especially if you have a history with them are much more flexible on what they can do. The bigger banks are pretty rigid and don't like to cater
 
We just built last year in suburban Atlanta and my parents are currently building in suburban Chattanooga; timing right now is a bear. We picked from the floorplan menu of a tract builder in a planned development and it still took 50 weeks contract to closing (pre-Covid, they said it would have been 4 months tops). My parents are in month 10 of a true custom on their land and haven’t even gotten a foundation poured (not for lack of trying).

Their lender (Regions) set them up with a construction to permanent loan that locked in an interest rate now - it draws during construction then automatically converts to a traditional mortgage once the CO is issued; maybe that’s an option worth exploring, too, since I believe Regions has branches in Knoxville (or did when I lived there when I was at UT 20 years ago).

We were in the same boat you are - mid-ish 30s, kids in the future and done with city life after NY and midtown Atlanta for a decade between the two of them. Existing home stock was terrible when we started looking, so we hit the timing bullet and built.

Good luck and Godspeed with building right now! Be prepared for many delays and out of stock materials - it’ll be great once done though! DM me if you want - Glad to share our experience and what we would have done differently if we could get a mulligan.
 
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My wife and I bought a few acre lot several years ago to build, but before we could get started on the house itself COVID, supply disruptions, etc., got in the way. Still planning to build and just sitting back and building savings. Not sure extra cash has outpaced the extra cost yet.
 
$2K in Tennessee? My neighbors are going to be renting an entire house for that in the middle of an urban market!
 
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