# Entrepreneur of the Week # Post 3 Entrepreneur of the Week - Post Number 3 New Construction It can be said that in general new construction…
Entrepreneur of the Week - Post # 3
New construction
One could say that in general, new construction is quite similar to a typical Pix & Flip deal.
Buying a plot / house in need of renovation> Builders / renovators> Selling at a profit / renting.
Personally, I've done both Peak & Flip deals and new construction deals, and I chose to focus only on new construction.
In this post I will list some processes and concepts related to the new construction world in the United States.
Land / sea location -Priority is given to plots in an existing neighborhood, so that you can get a better estimate of the value of the property in the construction. There are realtors whose specialty is plots and new construction. As with any field, we recommend working with someone we know / have received from addictive recommendations. It is very important to check the plots in front of the municipality, the type of terrain (residential / commercial / single / bi / town house / multifamily, etc.), how much is / can be built on each plot and plot, there are plots that cannot be built for some or other reason for no apparent reason .
Land before / after development - Land before development will cost us very cheap compared to land under development. It is nevertheless important to understand the differences in depth:
Development can take a lot of time, countless glitches, permits and regulations that can delay the process. I personally purchase plots after development, in existing neighborhoods and directly apply for a building permit.
For those who have time and a deep pocket, developing plots can be a good business even without the construction itself. There are companies that are engaged in this field, buying plots before development> development> sale to developers / contractors.
Model Selection for Construction - The property model must be tailored to the neighborhood character we are building, size, number of rooms, exterior / interior specifications, number of floors. Quality contractors and realtors will be able to refer us to architects who can build and customize a sketch for us. I usually do this with the contractor.
Property Specifications - It is important to adjust the specification according to our strategy at the outset, namely: whether the incoming was built for sale or for rent. If for sale, most of the specifications will be of higher quality and tailored to the local market.
If rented, the specification will be simpler both for maintenance and for tenant requirements.
Building permit - Requirements are different in each state / province, but in general it is required to submit the sketch of the building, a sketch of the lot with the building in it (adapted to the municipal rules in terms of building line, front / back area and more), technical specifications, planning map (similar to DB). , Sewer clearance (piping or septic), paid water and sewer fee, proof of ownership, submitter details, contractor details and additional requirements on who applied for the municipality. For accurate instructions, contact your local municipality.
Contractor - One of the more difficult things to find is a quality contractor that will meet prices and times. Recommends building a payout schedule with bonuses based on cost and time savings, or a partnership model.
construction inspector - Required! Required! Required! There are several stages of construction and it is important to make a step-by-step inspection report. The number of steps varies depending on the type of property being built: single / two-family, with / without basement, Town House, etc. Family singles usually have around 4-6 insufficient reports, 5-8 bi-families, and House 6-8. Of course it depends very much on the state / province.
Construction Stages - Plot clearance and infrastructure layout, concrete base casting, property frame construction, exterior / interior cladding + windows and doors + kitchen, finishes. Adjacent buildings such as: Do, Town House and the like, there is another stage related to unit-to-unit fire separator walls and the addition of flame retardants.
Population Form - Just like you know from Israel. And those who do not know, then a contractor who finishes building a house / building, submits a request to the municipality and they come to check that the building does meet the municipality's requirements and according to the building permit given. Once the test has been successfully completed, you receive a Population Form - the property confirming residence.
Rent - We recommend posting the property for rent about a month before the completion date. At the end of the construction, the management company will arrive at a "property receipt" (similar to the process of delivering / receiving a car from a rental) and make sure that the tenant is in good standing.
Sale - The property can be advertised for sale at the start of the road, the so-called Free-Sale. We recommend planning the pre-sale strategy, which means: If we sell the property on paper, we will probably need to give some discount and if the property is ready then a market price or close to it. If you are building multiple properties for sale in the same neighborhood and are selling on Freestyle, it is important to sell at the original price and give the discount in the form of benefits (electrical appliances, mortgage fees, etc.) so as not to hurt the market value of the other assets.
Unfortunately, I can't cover everything in one post, however long.
Believe I covered a relatively wide range of processes and concepts related to new construction.
Believe I covered a relatively wide range of processes and concepts related to new construction.
If I gave you one little tip - I won.
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