WIT Construction aka Rich

[Cole]

Rich how is it looking for 2005, are you on track? :D

[Rich]

Looking very good. Just signed the articles of incorporation and sending them off tomorrow. Will do S election with the government after that and get an EIN.
Been crunching the numbers and they're actually better than I was thinking. Should be showing profits by April/May.

[Cole]

Keep us updated.

[Rich]

I'll do that.
As far as work - first home should start around March/April. My father will be running that one for me while I'm finishing this house up in Colorado.
Should be receiving the plans for that one this week or early next week. Then we'll be looking at bidding 2 more homes - hopefully will be only bidder.

[Cole]

Do u have any more pics of that monster you are building?

[grumpydasmurf]

So Rich youa re building homes then selling them off or finding customers who want homes built?

[Rich]

Finding customers and building them homes.
I won't do spec homes until I can pay for at least 2/3 of the house without hurting the company at all - probably not for 5-6 years from now.

[grumpydasmurf]

Personally I wouldn't be able to handle the stress involved with dealing with a customer over the whole length of building a house. I plan to do a few spec houses in my life to padd the bank account.

[Rich]

And see I'm just the opposite - no problem dealing with clients. But when I have a $100,000 invested in a house that I don't know when or if it's going to sell - that stresses me out :)
There are some rewards of building spec homes (don't get me wrong).. but IMO they are overshadowed by the risk. Large expenditures for an undefined length of time. Now if you have the backing and ability to foot the bill for that long and not opposed to exposing yourself to risk - go for it :)

[Cole]

That is the reason I dont build spec homes.

[grumpydasmurf]

I wouldn't build a spec home unelss I could afford it indefinetly. ;) I wouldn't build for a customer primarily just for my own ignorance.

There are a few spec houses around here that are over priced. I bid one right down the street from my house. I lost the roof job because I was trying to get the GC to spend a few extra bucks ( about $200) on some copper work on the front of the house. As it is the first thing you see when you drive up is this god awful ugly almond color step flashing.

If someone is gonna pay a million bucks for a house it shoudl have copper flashing!

[giddonah]

Just talked to my sister today who at one point worked for a guy who decided to build a spec house. It didn't sell as soon/for as much as he was planning. She and two others were laid off immediately and he eventually lost his business. Of course, his spending some of the house loan on photography equipment might have had something to do with it. :roll:

[Cole]

Yeah, it might. But building spec homes is risky.

[Dragon]

location location location.

[rgramjet]

I have a buddy that built a spec home, next to his own residence. About 1/2 way through the project, he found a couple that was interested and they ended up buying it before it was completed. They agreed on a price and agreed on the options.

A couple days before they were to do the front porch in broom finished concrete, the buyers asked my buddy how much it would be to cap the slab in flagstone. As a good will gesture, he didnt charge them a thing.

Next they decided that instead of the monochromatic "realtor white" that was agreed upon, the new woman of the house (notice I didnt say "Lady") decided she wanted 13 different custom mixed colors...for the same price. My friend told her how much extra that will be. She went out and bought the painter 13 new paint brushes thinking that is the only difference in price.

I wont even go into how she played the "my husband is a lawyer, Ill get what I want" card, and the independent inspector that took 7 hours to go through the house with a fine tooth comb. He came up with a 3 page list of totally trumped up deficiencies. I also wont go into how this crazy B. cussed out my friends lawyer and was actually banned from the closing.....

This was my friends first house and he really took pride in his work. I walked through it and was very impressed with his attention to detail and fit and finish. He is also the type of guy that would plow their driveway and sidewalk at the first snowflake. I think the stres from this ordeal took some years off his life...

Can you say "welcome to the neighborhood neighbor"? Ill take a spec home any day of the week!

[Rich]

An agreement isn't much good without a good contract. The first mistake was agreeing to do something for nothing. That pretty much opened the door for other changes. If there's a change in scope the change is documented and a price is given. Owner accepts change - work is done and payment is made.
IMO - there was probably more fault with your buddy doing his first house without enough experience in contracts and the business side of construction.