Hello everyone first post here I'm looking for some help. I currently have 114k saved up in a JP Morgan account avg 8% per year. I recently purchased 3.5 acres in Colorado. The property is in a HOA neighborhood that burned down in 2012. They have slowly been rebuilding and a bunch of the houses around me are worth over half a million and are not anything special. As of this time my girlfriend and I live in a custom built military truck that serves as our house. We love this live style but are always trying to make more money. My question is what would you do in this situation? I am thinking of building a simple 1000sqft house with a 4 car garage and then selling for 500k+ that would mean I would need to pull about 70k for materials. I can do 90% of the work myself as I am a contractor. Is it worth the loss of 70k for a year to then maybe make 500k?
The property I bought is in the mountains 12min from red feather lakes. (Very popular mountain escape) as well as being 35min from fort Collins (college town) most the people who live up there or own property up there have small 1000-1500sqft homes with a 4 car garage and a barn. Lots of off road toys or trailers and stuff. For the property's that are valued over 1 million those are the larger 3+bed with 2000+sqft. As for the HOA I looked into the bi laws and there only concern is that the house can't be smaller then 800sqft and the material needs to be natural looking. Also the garage is allowed to be attach and needs to only have 2 garage doors. I did clarify with them that the size of the door doesn't matter. So I could have one garage door be a normal 2 car door and the second door be a massive 14ft door for pulling campers into.
You know the area, my only point was to build something easy to sell. It does surprise me that people would be happy with 1,000 sqft. But if that’s the market go for it. I like your 4 car garage I just couldn’t live in something that small.
I believe it's because people are using these properties as summer properties. So come winter they head out to somewhere warm and then come back the next summer. I currently live in a custom built military truck that has totally 200sqft of space haha. I do travel a lot tho for work and pleasure so it made sense to just vanlife instead of paying rent when I'm only there for 5 days a month.
I dont think you're considering all the factors. The 70k also wouldn't be a "loss" but a risk investment.
70k is for the materials, but how are you accounting for all the time you're going to spend building the place? How are you going to account for issues you may run into with the HOA?
Youre not just investing 70k to potentially get a profit upward of 430k. Youre investing your time which is imo far more valuable.
Assuming you keep your normal job. Is your plan to do work every day after your job or to work every off day essentially working 7 days a week for a year. Just things to consider.
Currently we are running summer hard but I coach high-school soccer in the spring in and fall which gives me most of everyday to work on the property I'm pretty confident I could get the house built in a year. The one we are planning is a simple 2 bed 1.5 bath with a larger family room. My thought process is if I pull in another 20-40k by the end of summer I can then work on stuff during the winter and spring so by mid summer the property is ready for sale.
Random question, how are you getting 8% with a JPM account?
Vanguard has been killing it for me this year.
From their post I assumed jt was a HYSA but if it’s invested money 8% sounds low this year, no?
I think this year I'm at 11-12 but on avg I get 8 so I just count on 8% and anything over is a bonus :)
Got it, so it’s invested money not HYSA. 👍
You have an HOA, somehow I don’t think they’d let you build a house that small with a garage that big. $ car garages belong with bigger houses. If you’re building to sell you need 2-3 full baths, 3-4 bedrooms and 2,000+ square feet. As a contractor you could probably do a nice flip. Remember you want the cheapest house in the neighborhood not the most expensive. I live in a golf course development right on the golf cart. The house 100 yards away on the same green I am sells for $20 per square foot more then my house because that house is in a gated area and mine isn’t. If you’re building to sell all that needed to be looked at.