Build My Home and Save Big

Can I really build my home as the general contractor and save money?  Don’t professional builders have an edge over the guy that builds just one home?  With the downturn in the real estate market, can owner builders still save?  Here we share with you an insider’s look at what kind of money you can really save.  Don’t forget to watch our new video below…we dive deep into the current financials of an actual home building company.

Build My Home Without Being Handy?

For the sake of this discussion, we are talking about managing the building process, not necessarily doing the work yourself.  Most people don’t have the time, tools or know how to do most of the physical work when building a new home.  If you do, then your savings will increase dramatically.  So for this discussion, we will assume you will subcontract out most of the work on your new home…just like the professional home builders do.

Builder Profit Equals Owner Builder Savings

If I build my home as the general contractor, where does the savings come from?  Professional builders, also called general contractors, make money by marking up the cost of labor, materials and lot.  So in essence, if you can find out what the typical builder gross profit percentage was last year, you would know what your savings would be.  Let’s take a look at gross profit to see what it really means for a builder.

Gross Profit = Sales – Cost of Goods Sold

The cost of goods sold for a home builder is equal to…Lot + Labor + Materials.  Sales is the sales price charged to the new homeowner.  So, if we look at the average gross profit percentage, we will know what the home builder made on average for each home sold.  This will be the starting point for the potential savings for the owner builder.

Additional Owner Builder Savings

So you can save the gross profit as an owner builder if you manage the process yourself.  This can range from 15 to 30 percent.  But the potential savings doesn’t stop there.  If I build my home and do some of the actual work, I can save even more.  Even if you don’t have any real building skills, you can take on the cleanup and painting and save an additional three to four percent.  Another major advantage for owner builders is the ability to shop for bargains.  Looking for closeout products and bank owned lots can add major savings to your new dream home.

Are there any other reasons for me to build my home without a general contractor?  Check out this video for more reasons.  And if you have already committed to becoming an owner builder, stop by our How to Build Your Own Home resources page for some help.  We share with you some professional builder tools that are not available anywhere else.

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