This unusual new book, “Building Real Estate Riches,” by Chris Condon is about building new houses as investments, selling tax-free, and then doing it all over again. That’s a quick summary of this unique book.
The basic idea is to find a buildable lot, construct a new house on it, move in, live there for 24 months, and then sell for a tax-free principal residence sale profit up to $250,000 (up to $500,000 for a married couple filing jointly).
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The basic premise sounds simple, but it isn’t. As the author explains, there are lots of mistakes to avoid and many techniques to use to enhance profits on the new house you either construct or have built for you.
The key to success, Condon emphasizes, is to keep lot-purchase and construction costs low. He explains his cost-cutting ideas, based on working for two of the nation’s top 10 builders, for many years.
Frankly, I wouldn’t want to be the buyer of the author’s houses. He explains how to slash costs while making the new home acceptable to future buyers. Purchasing the lot at a bargain price, Condon explains, is the beginning of profiting from building new houses.
He explains how to choose a potentially profitable lot. But sometimes the wording becomes confusing. For example, in the chapter about buying a lot, the author says, “When you’ve decided on a lot, take the time to write out all offers in a contract that includes all conditions of the sale.” What the heck does that mean?
The book contains Condon’s sound advice based on many years of home construction experience. “Don’t be different,” he cautions. In other words, build houses most people want in the local area.
Then he explains some costly mistakes he made, such as building basements in areas where home buyers don’t want basements.
The author advises visiting the new developments of the big builders. He says they usually anticipate trends, such as the direction of growth for a city, and the “hot selling parts of town.” Then he proceeds to explain how to “borrow” their ideas shown in their model homes.
This new book is very profitable reading until Chapter 15, which is titled “Value Engineering.” A better chapter title would have been “How to be a cheapskate builder.” In this confusing chapter, Condon reveals his most severe cost-cutting methods.
For example, he says, “use shed dormers in lieu of gable dormers.” But he doesn’t explain the difference.
Then, he suggests, “Use dead dormers in lieu of live dormers.” He reveals, “Live dormers are those you can see from inside the home. Dead dormers are strictly for show. You only see them from the outside, and they only add to the exterior appeal of the home. Dead dormers cost less than live ones.”
Too bad Condon didn’t explain a dormer window is on the second floor of a home, adding light to upstairs bedrooms. Until I read this book, I never knew “dead dormers” existed.
Even if you have no thought of profiting from your new-home construction, this is a great book to study for its suggestions of profitable and unprofitable house features. As a construction expert, Condon explains how to cut expenses. Frankly, I don’t agree with all his ideas, such as not fully dry walling an attached garage.
At the beginning of this book about how to profit from building new houses, living in each one for at least 24 months, then selling and doing it all over again, I was very favorably impressed. But after reading Chapter 15 about how to severely cut construction costs and build a “minimal house,” I was turned-off.
To illustrate, Condon recommends not including any roof overhangs at the side eaves. He also suggests deleting gutters. “Use a rain diverter over all exterior doors,” the author recommends. Another cost cutter: “Only use shutters on the front of the home.” I could go on, but you get the idea.
Chapter topics include “The Equity Strategy”; “Location, Location, Location”; “Cheap Dirt, Dirt Cheap”; “A Good Foundation”; “Choosing a Style”; “Size Matters”; “Pick a Plan”; “How Nice is Too Nice?” “Will It Appraise?” “A Borrowed Idea is a Good Idea”; “Do It Yourself”; “Decorate for Resale”; “Rental Properties”; “Who’s Doing the Building”; “Contracting”; and “Financing.”
This new book is valuable for anyone who wants to profitably construct a house where they will live at least 24 months before selling. It explains the cost-cutting techniques of a professional home builder.
But readers should consider how some of those cheapskate cost-cutting methods will be accepted or rejected in your local market. On my scale of one to 10, this unique book rates an eight.
“Building Real Estate Riches,” by Chris Condon (McGraw-Hill, New York), 2004, $16.95, 158 pages; Available in stock or by special order at local bookstores, public libraries and www.amazon.com.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
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