Building Futures
Compare – Buy New House vs Buy Re-Sale vs Build Custom House

Compare – Buy New House vs Buy Re-Sale vs Build Custom House

From the new book release:

Don’t Buy a New House! BUILD IT,

We’ll compare investing in Purchasing a New Construction House from a builder vs Buying a Newer Re-Sale House vs Building Your Own Custom Home.

You can adjust the parameters as you like, but I think you’ll be surprised to see how the numbers will work out for you when you sell your new home a few years down the line.

You can find:

Don’t Buy a New House! BUILD IT

on Amazon:

There’s a special price on the ebook this month. It’s a short read, but will give you a lot of great information and an eye opening perspective on building your own home.

Please post a review on Amazon. Your feedback is really appreciated.

If you have questions or want more info you can also check out:

Save 10-15% on Your New House!

Save 10-15% on Your New House!

My new book was just released, it’s called:

Don’t Buy a New House, BUILD IT.

Yesterday I said that this is the best time I’ve ever seen to build your own custom house and I mentioned that you’ll save 10-15% or more compared to buying a new house that a builder built on spec.

Why? Let’s look at how the numbers work. Suppose you are able to find & buy a new construction house that a builder just built. and let’s say you purchase it for $1.3M.

In order to build that house, the builder had to purchase the lot (probably a tear down) and put up maybe about $300,000 of their own cash to get the construction loan to build it. The builder’s cash has been tied up for at least a year til the house is sold.

At closing, the builder pays commissions and closing costs of about 7% right off the top. That’s about $91,000. And to keep it simple, let’s suppose that the builder makes a profit of 7% on the sale, that’s another $91,000.

Now 7% of sales is not a very big margin considering all the work that goes into it. The builder would certainly be targeting a profit closer to twice that. But let’s just say the builder makes only a 7% profit. By you building that same house yourself, you would save the 7% closing costs and 7% profits that are built into the builder’s selling price.

That’s 14% savings for you right off the top! In this example, that’s $182,000 of instant equity the day you move in.

You might even get the same builder to build it for you. This is a win/win for both of you. They can make money building for you at the same time they can invest their money into building another spec house.

In the book, I explain more about how the whole process works. It pays to understand the numbers! There is a link below to get the book on Amazon.

It’s a quick read, but gives you a lot of insight and all the steps to get started.

If you read the book, I’d appreciate it if you could review it on Amazon. Your feedback would really be helpful.

If you follow or subscribe to this channel, I’ll be going into more or the specifics of how it all works.

Let me know if you have questions.


Don’t Buy a New House!  BUILD IT

Don’t Buy a New House! BUILD IT

Hey, After some last minute revisions, my new book was just released!

It’s called:

Don’t Buy a New House! BUILD IT

You know, the last couple of years, I’ve seen so many people struggling to find a new house , and I wanted to show them how they can build their own custom house. In fact, a couple days ago, i shared a post from Bob Villa talking about why you might want to build your own NEW house right now.

I know a lot of people may have never even considered the possibility of building themselves, but Bob definitely has the right idea!

I built my own first new home about 25 years ago now. and looking back, it was really a life changing experience for me, so that’s what inspired me to write this book.

I’ve never seen a better time for someone to build their own custom house. You get exactly the house you want and if you follow the method I talk about in the book, it’ll be a really great experience for you and you’ll save 10-15% or more compared to what you’d pay for the same house that a builder builds and sells on spec.

So on a million dollar house, that’s $100 – $150 thousand dollars!

Of course it’s going to take some work on your part, but hey, that’s a lot of equity to start out with!

And It’s really not that hard There are a lot of great professionals out there who will be happy to help you do it, That’s what they get paid for!

So If this sounds like something that you might want to learn more about, Grab a copy of the book on Amazon. Because it was just released, the kindle version is starting at only $.99 just for this month.

It’s not a big book, it’s a short read, but there’s a lot of great information.

If you read the book, I’d really appreciate it if you could take a minute to leave a review on Amazon. It will really help me to get your feedback.

In the coming weeks, I’ll be talking about more specifics from the book like lending programs, finding your site and the whole construction process. so please follow or subscribe to this channel so we can keep you in the loop.

And if there is something that you’d like me to talk about in more detail, just let me know.


Chicago Residential Zoning for Single Family Homes

Chicago Residential Zoning for Single Family Homes

Chicago Residential Zoning

One of the first questions that people often ask me is what can I build on my lot or if they’re looking to purchase a lot, what what type of zoning do I need in order to build what I’d like to build. So, in order to understand this, we have to take a look at the Chicago zoning code

The Zoning code designates R Districts for residential, B districts for business, C districts for Commercial, D districts “downtown” (that allow taller buildings), PMD for planned manufacturing and PD for planned developments where a developer brings a plan in front of the plan commission for approval of a specific plan outside of normal zoning designations.

Each of these R, B, C and D districts are divided into a number of different sub designations, like RM 3, RT 4, B 1-3, B 3-2, etc. and each of these has a different set of allowances (or limitations, depending how you want to look at it).

R districts are divided into: RS for single family,
RT for Single family, Two flats, three flats or small multi family and
RM for bigger multi family
let’s take a quick look at the zoning map;

if I pull up our Chicago zoning map here I’ll just put in an address let’s say 1600 N. Wolcott. This is a busy commercial stretch on North Avenue so you can see mainly B and C zoning in these type of zoning districts don’t allow Residential on the ground floor, so you have to store fronts and businesses.

If we look at the side streets we can see a bunch of different zoning here but mainly we see a lot of RS three and RT for zoning and teaser a couple of residential Carmen Residential districts no. Now looking at all the different types of zoning in this neighborhood it probably seems quite random but keep in mind this is a very old neighborhood which has undergone several changes in demographics over the years. The zoning code has also been changed a number of times over the years.

So what we see now is taking into account what’s already existing and also taking into account the city’s plan for continued development in this area.

So let’s just look at RS 3 zoning as an example. In RS 3 districts the code in effect limits you to single-family homes in effect by designating a minimum lot area per dwelling unit of 2500 ft.². So, on a standard lot which is 25 x 1 25 or 3125SF, you’d only be allowed one dwelling unit.

Probably the most important concept that you need to understand is the idea of floor area ratio or what’s called FAR. This is is an allowance for how much area can be built on the site as a ratio to the land area.

RS 3 designates an FAR of .9 so if you multiply our 3125sf times .9 , we get about 2800sf. This is the floor area you’d be allowed to build on a standard lot in RS 3 zoning. (keep in mind basement space below grade does not count against your FAR). So, another words on that standard lot, you could bill 2800 ft.² above grade plus your basement

Now RS 3 also designates a height  limitation of 30 feet so assuming you have a basement that brings your first floor level up to 5 or 6 feet above grade you’re effectively limited to a two-story house plus basement there’s really no way to get a three-story house in here unless you built three stories on grade, but then each level could be a maximum of 2800÷3 = 930 sf . That’s too small of a footprint, so it wouldn’t make sense for anyone to do that.

So if you divide your 2800 by 2 your max is two floors of 1400 ft.² and you also can have a 1400 square-foot basement so your total square footage can be up to 4200 ft.². Pretty good sized house, right? But it’s only 2 stories.

Now there are also limitations for your setbacks on your side yards and your front and rear yard which can affect the footprint of the property allowed. So it varies by the building type.

RT 4 zoning has a minimum lot area of 1000SF per dwelling unit, so our standard lot can accommodate up to 3 units.
in RT 4 for example, your FAR is 1.2. So a standard lot would allow 3125 x1.2 = 3,750 SF. In 38 ft, you can build 3 floors plus a basement,
so for example, if you just divide that 3750 by 3 floors, you could build 1250SF per floor plus 1250 basement.

You could divide it up different ways, for example you might make the lower floors a bit bigger and the top floor a bit smaller, Maybe doing an owners unit with  roof deck.

RM zoning expands your FAR and you height limit goes up to 45 feet or more which can allow another floor. Minimum lot areas required per unit drop to 700SF or less, but the number of units you can build is practically limited by how many parking spots you can get on the site.

As you get into bigger and bigger projects the considerations with zoning and building codes get more and more complex.

This is but one of the reasons that architects need to be licensed. They are ultimately responsible for interpreting the codes and designing your new building to be in conformance.

Bigger projects, often require an experienced zoning attorney to apply for zoning variances or to apply for zoning changes, neighborhood approvals or apply for a Planned Development, but sometimes we might need a zoning attorney even for a small project.