Srs thread is srs

Like most things, buying/building houses in bulk is cheaper

I would say if you’re building like 4+ homes with a builder on a single build contract you might be able to get 25% off the price compared to building them separately

Probably more if you take into account any benefits from acquiring larger blocks and subdividing

Now, of course most people don’t have the capital to finance 4 houses even if they are cheaper per unit

But why don’t people just get together with a group of other like minded people and finance a joint construction project?

You get a new build and can have input into the design and inclusions and if circumstances change you can just sell for a profit

Because you still need to hire a general contractor to build them.

There are plenty of general contractors building hundreds of houses at a time that don't need your money for capital.

Isn't this called a REIT lol?

Better if it's a private REIT tho

Not sure what you're talking about. Over here, they DO build in bulk. They don't even start the project unless they have a minimum number of people signed on.

And there’s plenty that do need money for capital

Particularly when costs of money are high or demand is low

Obviously those are the ones you’d be approaching

No I’m not talking about professional developers

You would just end up paying the market price for house with the profit going to the developer

I’m talking about people who just want to buy/build a house to live in

Why not just get 3-4 friends or family members, subdivide a lot and engage a contractor to build the houses for a much lower cost per house?

Seems like this would be common practice

If you build the houses identically you also save time and money on design

We've been talking about misc island for how many years now?

I've brought up a very similar idea with just buying land cash by pooling together money and then fund builds.

The problem is that the hardest part is getting people to sign on. Say you need 5 people to pool money. It's extremely easy to get the 5th person because there are 4 other's already committed. Getting the first 4 though? Nearly impossible. People can't commit to coming to a party 6 weeks in advance let alone making a major financial decision.

My company's owners are palestinian and they did this with their business. They all pool their money. They used funds to buy work vans, a semi for the cousin to go off on his own for trucking (and helps us transfer), all their houses are in a small block, rental properties, etc. The entire family, even the one's not in the business, all help each other out. Genius.

Probably a few reasons reasons.

don’t have the money to finance their share of the project.

Don’t trust other the people in the group. What happens if someone can’t come up with money once the project starts, or wants to drop out etc .

Don’t have any experience with building/ planning a build. Would rather buy something already made that they can see the finished project

The money one doesn’t make sense because this approach would save money over the alternative of buying an already built house and paying developers margins

Take the point about trust though - but that could be overcome with joint venture agreements, contracts and usual due diligence

It's not a matter of being able to find a GC to build them, it's trying to find a builder that will custom build them for you for cheaper than you can buy a spec house from a large volume builder.

You're not saving any money vs a large scale builder as far as materials and sub contractors go, in fact you'll be paying more for subs since your project is a one off (no loyalty discount).

Also...people that can organize sh*t do it for themselves. I've built houses to sell along with all of the houses I've lived in, so I COULD build a bunch for some people for cheap, but why would I?

You're basically setting up a temporary construction company thinking you're going to magically be able to be more efficient than an established company.

You act like you just discovered the wheel.

Maybe it’s not common there, but here, you have professional builders who have their own employees or contractors (usually a mix of both) who just take on building contracts, add a margin and then deliver the completed product with certifications etc ready to move into (project builders)

Depending on how well capitalised they are they will also do their own projects, and also depends on what class building license they have (most are just classed to do basic residential)

Yes they have agreements with contractors, trades, technical and material suppliers so they’re not paying the “one off” price

Obviously you need to do your homework to find a reliable one but that’s the same as with building a single house

Cost per house is always significantly less

The builders need a flow of projects to keep their subcontractors in work

Idk.. my bro is in real estate development and I know his previous job was land acquisition and he told me a story about how some area was undeveloped. And some big azz company threatened he and his higher up not to come near that area cause it was theirs

There are only a few huge azz developers and they take up most of the land. Then it's hard to outbeat them with all their resources

Didn't Brad Pitt and a bunch of other celebrities try to do that for poor people after Katrina, then after like 5 years all the houses were delapitated and falling apart

Another idea is to move to the sticks. Cheap land and house because no one wants to be alone.

Jeebus that sounds pretty extreme

Wonder if there’s a high involvement of organised crime

Another issue is liability, people lose their job, loss their asses in the stock market or on bitcoin, or are just flat out irresponsible. If you go in on buying these houses with 4 other guys and one loses his chit financially, can the other 3 of you cover his share?