Build Your Personal Nest Egg in Today’s Financial Climate With Owner Builder Construction

Owner builder construction is a creative way to build instant equity in your primary residence, which will jump start a family’s nest egg even in today’s financial climate. The decline of the housing industry leaves the doors wide open for an owner builder to take advantage of decreased land and labor costs and save tens of thousands of dollars in sweat equity in a new home.

Historically, families in the United States have built wealth through equity in their homes. With the recent mortgage crisis and looming recession, many families have seen a huge hit to their savings, leaving their nest eggs cracked or broken.

However, with these new realities in the housing market, there are opportunities for you to boost the equity you have in your home, thereby building or protecting your family’s nest egg. So, how can you build instant equity into your home without putting a lot of cash into the project our of your own pocket? The short answer is owner builder construction.

What is owner builder construction? This term refers to any construction project in which you manage the process yourself. In other words, you cut out the costs of a general contractor and manage the sub-contractors who will do the specific labor to build the home.

Because an owner builder eliminates the cost of a general contractor, he will typically see anywhere from 15% to 30% savings in the cost to build the home. In some areas around the country, the savings can be even more drastic if the costs of builders are artificially inflated. These large savings translate directly into equity that an owner builder has in his home, because the discounted cost of construction does not mean that the value of the home is any lower.

Whereas your neighbor may have built his home for $ 300,000, you can build the same home for $ 210,000 as an owner builder. If these two homes are exactly the same, their value will be the same. However, the owner builder will have an extra $ 90,000 in equity in his home.

If you are unfamiliar with construction, and the idea of managing your own project terrifies you, then there are ways to still be an owner builder. You might want to consider hiring a project manager or site supervisor to provide advice along the way. You can still cut the costs of a general contractor. Your overall savings may not be quite as high, but it will still be construction at a discounted price, which will still be a nice boost to your nest egg.

So, why would anyone want to be an owner builder in today’s housing market? The answer is simply that today’s housing market is just as good as any to build as long as you can eliminate the general contractor overhead. First, an owner builder will find land at prices much lower than the costs were a couple of years ago. And, maybe even more importantly, the sub-contractor labor costs will be much lower.

Two years ago, an owner builder would have had trouble getting a sub-contractor, such as a plumber or electrician, to give them the time of day, let alone an actual, realistic bid to provide services for a construction project. Often, sub-contractors already had construction jobs lined up for the next twelve months.

But, nowadays, there are far fewer construction projects. These sub-contractors need to work, so they will be much more responsive to any owner builder who has a home to build. If they know you are searching for people to bid on specific labor estimates, you will find much lower labor costs today than you did in the middle of the housing boom.

Therefore, an owner builder can save on land and labor. The cost to build the home has been reduced so that there is still the same amount of sweat equity available for owner builders. In other words, an owner builder will still be able to achieve the same instant nest egg, even in today’s market. There aren’t many other ways to build this kind of equity in a home today without spending a lot of cash out of your own pocket. Owner builder construction is the perfect way for many families to build instant equity in their homes, boost their nest egg savings, and right the ship for their personal finances overall in today’s financial climate.

Chris Esposito specializes in financing owner builder construction loans for individuals who wish to eliminate the costs of a general contractor. If you want more information about owner builder construction and financing, visit Owner Builder 101 or call (877) 876-3688.

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