Posted By gmun on 18 Dec 2011 05:38 PM
If the prices I am seeing here are true I should be able to get a small mortgage say $80,000 and with a little sweat equity, cash out of pocket, and a few years have a home that doubles in price.
Does that sound reasonable?
Don't count on being able to do it. DIY builders are as welcome to bankers as wasps are to your outdoor BBQ! When I built my house I had a choice, get a builder involved with me, or not get a mortgage and thus not build the house. And then when I did have the builder on board, and the construction loan in hand, every month past the first 6 that I didn't have the house finished the pressure to get it done got greater. After about 9 months the banker threatened to kick me off my own job and tell the builder to get in and get it finished. As it was the builder did start working with me pretty much full time at about 10 months until we finished at 13+ months.
Unless you have a private source of money, or an extremely rare and cooperative mortgage lender, I'm afraid you will need to rethink your plans for taking "a few years" to build your house. I'm going to be so bold as to say there is a 95%+ probability your plan won't fly. It's unfortunate, but bankers have two huge factors that influence them: a poor record by DIYers in general to get a house finished in a reasonable amount of time, and the pressure to get the construction money converted to a salable mortgage as quickly as possible. A salable mortgage is one that finances a marketable house. An unfinished house isn't marketable.