Becoming a builder

Does anyone have any advice for learning more about becoming a builder? I am currently an on-site agent for a National Builder of the Year and really love the new home industry. I am very familiar with the sales side, but not the building side, nor the land development/acquisition side. I have also done a few rehab projects myslef that have turned out well, so I am not completely illiterate with regard to construction and remodeling. Is this the type of venture that truly requires tons of capital to get started? If so, what is a ballpark? Where can I learn more?

Any other feedback is greatly appreciated.


Howdy Brian:

You can not syart at the top doing a whole subdivision by yourself without plenty of financial backing. Just getting the earnest money for the contract to buy the land would be $40,000 cash. Then you need to hire appraisers, engineers, surveyers, architects to do prelimary plans etc just to get the financing approved which will demand a committment fee too. I can see several hundred in upfront cash on a large 400 lot development if not more. I hope someone else with a better number can help here too.

If you feel you do not have enough experience I might suggest buying one lot and building one house from the ground up first. Get to know the subs and the ins and outs of the business. From there you may want to do several at a time and then maybe a small development of 20 to 50 homes with all the profits.

I’m a RE broker specializing in land and development approvals. When I started this work about 20 years ago, I couldn’t find any type of training, books, courses, etc. So I had to learn the hard way–trial and error and “cornering” people who knew more than I did and asking lots of questions.

Since you work for a large building organization, chances are they have people in-house who find land and analyze development feasibility and others who are responsible for getting municipal subdivision and other approvals. In addition, there may be other people there whose job is to put together packages on proposed projects to submit for financing. If I were you, I’d start chatting with these people, picking their brains and soaking up as much info as possible.

Keep in mind that building and developing are actually 2 separate things. The primary job of builders is to construct buildings. The primary job of developers is to change property in some way to increase its value, not necessarily by building on it, but rather by subdividing it or otherwise changing the way it can be used. The organization you work for probably does both.