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#457133 - 03/30/17 10:07 AM Spec Home selling
drfeno Offline
Junior Member

Registered: 03/30/17
Posts: 2
Loc: Connecticut
Hello, I'm new to the forum. I have dabbled in real estate for about the last 15 years. I've flipped one house, basically doing everything myself. I've owned 2 multifamily properties with a partner. I've got pretty extensive experience with construction having worked for a home improvement contractor during HS and college. I would like to build a spec home, as I prefer building to renovation. I'd like to do something a little different than I see out there, and I wonder if its worth doing. I would like to build a net zero home. a large solar array, well insulated, geothermal heat, drain heat recovery, home automation, etc (I'm an engineer by trade, so this would interest me). My question is, does this add value to the house? I know it adds a little, but are buyers willing to pay more for a high tech home, enough to make it worthwhile? I live in northern CT, and that's where I would build. my target home would be about 2500 - 2900 sqf, High end kitchen and baths, 3 car garage, probable craftsman ranch. looking for 550,000. is that feasable?

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#457135 - 03/30/17 10:59 AM Re: Spec Home selling [Re: drfeno]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7950
Loc: Vermont's North-East Kingdom
I have personally owned a couple, and also sold MANY, off-the-grid alternative energy (wood, solar, wind, hydro and methane) homes as a Broker.

One thing I can say is that Alternative Energy usually equates to Alternative Financing . . . . like CASH, Land Contracts, or Owner Financing. And that doesn't mesh too well with building on the basis of speculation that the market will be there when you're ready to sell. Holding Costs for a completed home can eat you alive while you await the appearance of a Qualified Buyer.

The point is that while there may be people out there who appreciate the energy efficiency nature of the dwelling you wish to create, and have a willingness to pay a premium price for it (especially if it has some avant-garde "visibility" to the public) . . . . they still may not have the financial capacity to buy it with cash and the typical lending institutions are more geared to accommodate conventionally energized homes, and so is the Secondary Market for Mortgages, so your marketplace is quite reduced, And that makes it a mite more difficult to divest when the time comes.

Look around and speak with some local lenders who may be willing to offer a special mortgage program to encourage such loans and keep them in their own portfolio if necessary, just for the PR value in the community.

Also, consult a Broker in your area to do a quick search of "alternative energy" home sales in your area over the past few years and see if their market performance matches your expectations. The current low price of oil doesn't help in your financial analysis . . . . but that is likely to change (but when ?).

Good luck.

_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#457137 - 03/30/17 12:48 PM Re: Spec Home selling [Re: drfeno]
drfeno Offline
Junior Member

Registered: 03/30/17
Posts: 2
Loc: Connecticut
Thanks for the reply, I'm trying to get my ducks in a row and research if I want to dive into spec building in general. I just thought that making an "off-grid" home would appeal to the affluent younger people around here. Northern CT can have some high property values depending on the town (I would try to build in a more affluent area). Also, the home would not actually be "off grid". it would be connected to the utility company, using power at night, and possibly selling some back during the day. So it would perform just like any other conventional home, just with the solar array, it would use much less electricity. I have no issue building and selling a normal conventional home, I just thought that these features would set it apart a little from all the other homes out there. and possibly add value.

Thanks again,

Dave

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