hey over here I'm Steve Harbaugh and I am a custom home builder here in Stone Harbor New Jersey and I have built 180 houses here on this island just like this $8 million house I am on top of today but it did not start there I started building houses Inland and before that I started flipping houses I always had a passion for building and I always dreamt about building a home just like this and it starts with building the right team it starts with the architect it starts with the realtor to find you the Lots it starts with a team that can build this house a project manager a selection coordinator and all the vendors in between to make this happen I'm going to show you how to find a lot how to find that architect how to build a home just like this but the most important thing is as a builder what you do with the money that you make off of building so join us I'm going to show you from A to [Music] Z so you want to become a home builder what's that take the first question you need to ask yourself is there are two type of home builders there's home builders that are going to work for somebody as a custom client and there's another home builder that's going to buy buy land build and sell and they're completely different both have pros and both have cons we're going to talk about each one of them let's talk about being a custom home builder that means that you are going to build for someone they are your boss and they have plans and you're going to bid those plans out and you're going to build for them one of the best things about that is you're guaranteed to get paid but you're working for somebody else and clients can be challenging look at all the stuff that they have to pick every single thing you see in this house they're your boss they're going to tell you what they want and how they want it done again it's great it's guaranteed money but what I suggest is becoming a custom home builder to get that cash flow going but also becoming Your Own Boss and being a spec Builder buying a piece of land building a house and then selling it so how does that start what is step one well what I did I kind of fell into it by accident I set sale to be a spec Builder I didn't want to deal with people I wanted to buy a piece of land and I wanted to sell it and make a profit unfortunately the market crashed and then I started to show this house and then folks were like hey you know we don't want this house it's a great sample home but can you build this home on our lot then I became a custom home builder I didn't set sale to do that but what it was it was guaranteed cash flow which is great so I always suggest have a balance I always say hey go out buy a piece of land build it and sell it you're Your Own Boss you're a spec home builder but for every four Custom Homes do one of those you have the best of both worlds you have that guaranteed cash flow coming in but you also have that chunk of money that you don't need and here's what I'm very passionate about when you do a spec house and say you made $50,000 or $100,000 what you do with that is crucial you shouldn't need it because your custom home clients are paying all your bills so look at this as a bonus and put it away try to make that 50 100 200 and now because you are in such a unique position you can take that money and invest in your own real estate and you're going to be your own builder so you're going to build that property income producing property for a lot cheaper than anybody else would do and that's what I did I started flipping houses and I would roll it into self storage facilities medical buildings so being a home builder that is the number one reason why you should want to be a home builder yes to make money with custom home clients but also to have that goal of taking those chunks of money from those spec homes and rolling into some type of passive income where you someday will never have to work again Financial Freedom and that is the key of becoming a home builder whether you decide that you want to be a custom home builder or Be Your Own Boss with Speck houses the next steps are the same you need to find that lot whether you're finding that lot for your client or yourself as the homeb Builder I'm going to show you exactly how to find that lot also the next step would be what are we going to build we need to design that house the best way is to find a local architect where you start to see a sign out there where they're building a lot of homes call them sit down with them they'll have homes which are stock plans plans that they've built before so we need to find that right architect the next part is when you have those plans you're going to need to establish a budget so now you've got a full set of plans you can give it out to concrete guy Foundation guy drywall framer now we have formed a budget so we're going to get familiar what it cost to build that home and the fun part is designing the house work with a local designer I will show you how to pick all the selections and that's the fun part and the last part is selling that house if you're Your Own Boss you're going to have to pick the right team the right sales agent to sell that house but that home if it's a spec home is going to be your sales piece for your custom home client so again I love that balance I'm going to show you exactly every one of those steps are the same for whichever path you take custom home building or specal next step is to find a lot and I'm going to show you exactly how to do it and I have a lot of really good tips on exactly how to find lots that other people are not looking [Music] for before we get into the car and look for the Lots we got to check out the zoning hey if we're going to build a house we want to make sure it's zoned to be able to build a house and it's not zone for like commercial for instance so if we got to get a lot we know we're going to build a house we definitely want to make sure that it's zoned for that but all lots are different and there's different regions where they're going to be built there's different tax maps and Zoning maps that you can look at but for instance this is a 60x 110 lot there's going to be a setback from the front yard and the side yard and the rear yard and that's going to be your building envelope so even though you have this perfectly Square lot you know they could be different and where you're going to be able to build the home in that lot and the setback so you have to have your knowledge of what your outbound surveys are going to be and then you go to your architect to design it so one of the worst things you could possibly do is find a lot and I did it one time and it was Zed commercial meaning for a commercial building or a shopping center or a little store and you want to build a house there then you got to get into the use variances and all that it's just not worth it so how do we become knowledgeable with the land you simply pick an area go down to the municipality and ask them hey here's my zoning here's the map these are my setbacks yes number one this is what you can build there a house and then number two what are my setbacks what what are my constraints my sidey yard and what you do is you have this little square and then you have this it's called a building envelope and then you know what you can give your architect as to what you can design in that house and Architects can be a great source of that knowledge too if they're familiar in that area so before you go look for Lots we got to know hey are we looking in the right [Music] area so how do you find lots it's a question that I'm asked so many times and when you're in an office or on your own phone and you're looking at Zillow and you're looking at it's so hard and you're calling Realtors the best thing to do is just get out and drive I use tax maps a lot I'll look for brakes in land and if there's a house house house and then there's a piece of parcel that maybe look like it's a it's a big lot for another house that's probably a lot ready to go that somebody could build on now we're in a Beach town here and the way I look for Lots here there are no Lots there's just tear Downs so I do that I get out I start driving I go down a street and it'll jog my memory like oh that house so and so owns it or maybe the realer we'll call the realer so you got to get out and drive as much as it might make sense in your office to be looking at programs and looking at computer screens get out and drive get tax maps take notes call people get out talk to neighbors and that's a great way to find lots that are not listed in the MLS or on Zillow so that's a great way to start stuff that's listed but the way I found some of my best deals have been in areas that the homes weren't even for sale or the Lots weren't even for sale sale so get out there and drive the best way to do it all right here's a great example guys here's a lot there is a tear down just like that house right there it was been sitting here forever tear down house what can we build there you've got to get the dimensions you've got to go to an architect and ironically I built this house right next door this is exactly what you could put on a lot uh of that size that we just looked at and again this this was exactly what I just talked about I got out a year and a half ago I was driving around with the reer it was a little tear down house was not on the market it was on the rental program they called the lady and she's like yeah I've been thinking about selling we made her an offer we closed and we built this house and guess what we had no competition because it was never on the [Music] market after you have picked a lot the next step is to get architectural plans so without spending a ton of money on full sets of plans to get an idea as to what would fit on that lot whether you are building it for someone else as a custom client or whether you're buying that piece of land and building it and selling it for yourself as a spec home builder it all starts with a stock set of plans drive around you'll start to see homes that are being constructed you'll see the Builder sign there and right next to that sign is the architect sign who designed that house call them they all have stock plans either in their office or online what's a stock plan mean well if I designed a house and it was a custom home at one point for someone they will have that in their library and now it becomes a stock plan something that they have done before you can review these a lot of times they will give you floor plans elevations and these are gold you haven't invested a dime you can take these plans and you can get them priced out for instance a framer if I said hey what's the cost of frame a 2,000t home they may give me a number but if they give you a number based upon a custom set of plans that were stock it'll show you the roof lines it'll show you very detailed drawings to where they can hone in on an exact number and that's where a lot of people go over budget is because they just ask general questions without plans I know it's a catch22 you don't want to spend a ton of money on plans but you want to get some accurate information the best way to do it is a stock set of plans now if you have a custom home client coming in they're going to look at this and they're going to be like wow I love this I love the kitchen I love the family room but can we move the dining room over here can we make it a little bit bigger we can start with that stock plan and tweak it rather than starting from the scratch so one of the next best relationships you need to get is with that local architect I did it right in the beginning I started with a stock set of plans and now my custom home plans are someone else's stock PL so get out there and check out that architect he's going to be your best [Music] friend so now that we've got that perfect lot one of the things that I recommend doing is building a spec house what's a speck house it's your sample home it's that house that's going to build you credibility as a build when I first started I didn't set sale to do that I just was in a market we built this house to sell it was a bad Market it didn't sell so I was forced to rent it out and I was also forced to show it to try to sell it and what happened was people came to me and they said hey I don't want this home but can you build this model on my lot and then I became a custom home builder so one of the things and I still do it the house behind me I still take those lots and I build my own spec houses because they are now my resume they can walk through them they've got the new trends so starting out I recommend getting that lot getting that investor or getting that bank loan and going and getting that sample home that is yours because that builds an incredible amount of credibility let's take a look inside this house we purchased this land and this is going to have a lot of the new features and this is going to be an an incredible sales tool for me for future people coming in because they can walk through this as it's for sale and it becomes my sample [Music] home now think about this you're able to walk somebody through a home that is yours it's not another client you have control of it and one of the greatest things too is floor plan people will be able to walk through here it gets them excited now compare this to just looking through a catalog if you had plans hey I want to build your home and this is what I could build you this Builds an enormous amount of credibility I still do it I do it for a couple reasons I do it one to keep the designs fresh and from an investment standpoint I suggest and you know I preach this it's yes should we be building homes for other people absolutely but every fifth or sixth house buy a piece of land build a house you'll be able to make a chunk of money that you're not going to need because that money you should set aside because your clients will be paying your active income right the money that you're going to be making so when you do do that fifth or sixth project like I'm doing here I don't particularly need this money but I'm going to take this money and then throw it into some type of investment in real estate later on I've built that house I've built that house and I've built that house and ironically I'm building the house right behind all three of those and to my point that house right over there was a spec house folks walked through that I was able to sell that house and make a profit but what it did I was able to sell this custom home right here because they walk through that sample home right over there and then I went one step further I sold that custom home because they walked through that sample home so to my point there's a perfect example I've never built three houses in a row pretty proud of it I just went to this house I'm like hey I built that one that one and that one and I start to look at the history again sample home spec house custom home custom home I would have probably never been able to build a credibility to sell these two beautiful homes if I hadn't had that salesperson right over there my spec house all right so cap guys get that lot find that lot and to build credibility and to jumpstart your building career find that piece of land build that house build your salesperson build that Speck house where people can go through I can't stress how easy it is people say to me oh you've built 180 houses here okay if I didn't have these spec houses I'd be nothing I'd be trying to sell off a piece of paper which I could probably do but it's a heck of a lot harder than going in and having this salesperson here all right guys case in point I'm going to a house 87 Street I built it it's done it's furnished it's a sample home uh I've got people that are interested in that house not that particular land and that house that spec house but they want to build their own they want me to find them a piece of land and they want me to build the exact house spec house that I'm going to show you on their piece of land that they're going to find so again they have no interest in buying this house it's a spec house I have it up it's for sale but it's a great tool exactly what I just talked about is going to happen in this [Music] meeting we just left 89 Street a spec house that we're working on now but here's what it looks like when it's all done and this is where it all comes together it's such a powerful tool to have something where folks can come in they can look at it they can feel it they can touch they can sit on the couch they can Envision themselves in a [Music] home so you're 6,000 so it's yeah 1500 so it's three you could build a 3,000 square foot on something 400 more square feet so this is five bedrooms you could do a six bedroom on that that is a lot I'll probably do the same bedroom just do the Le yes now this is becomes linear like you have a hallway right and everything's stacked when you get to that 60 I'll send you a plan on that it's just wider you come in you've got bedrooms to your left bedrooms to your right let's go in here so we can see this is what I I need I need something like that you need a 60 like I need a bigger okay look this is 65 so so let's go look at it it's 65 it would be 5 foot less in width which you won't even notice but just to give you a feel you should we should look at that excellent meeting they were able to go in they could picture themselves in the home home is a little bit too small we've got a 60ft lot that we're going to show them um then we're going to go back to nuns Beach and check out some contractors doing work on some more custom homes we have our land we've got our lot we have our plans next step is picking contractors this is the most crucial part of any construction project because this could be a potential nightmare what I go and try to do is this street is perfect look at all the construction going on and looking at all the vehicles you've got sound guys here you've got Foundation guys Pool Guys landscapers siding guys look around look what other builders are using write the names down stop and talk to these guys because this is gold right here if you see a lot of construction we happen to be in a very very nice area so obviously these guys are held to a very high standard they're probably a very good contractor which they are because I use them but I don't want you to get intimidated by looking at these beautiful homes this concept will work anywhere if you're flipping houses again if you're starting to build that house the concept is the same drive around if you see that van that plumber that's on that van again in a beautiful home home he's obviously a reputable contractor so get out talk to people you're going to have a list of 20 subcontractors and to be honest with you you're probably going to get 12 to 14 of them right six of them are going to stink they're going to suck you're going to have to weed them out but the more you do it like right now every one of my subcontractors I've had for 10 years I don't deviate they're perfect they know our process and you will get there but it's a little bit of a trial on err in the beginning but this street is gold something like this drive around talk to contractors and compile that [Music] list so here's another one of my projects this happens to be a speck house for an investor that we're getting ready to sell I love how the decor turned out in here the designer did a great job in designing this not only did she design it but she also furnish it let's take a look around [Music] after we have gone through the exercise of the stock plans the ultimate goal is to hone in on a full set of plans that we're going to use now this is going to be either way if we're going for our Speck house or if we're going for our custom home client these next steps are going to be a little bit different let's just go with the spec house you're going to build your own home you're going to design it and you're going to need a designer a decorator to come in she or he is going to help you with the light fixtures with the colors the floor all of the ship lap or any type of moldings that you do and all of that is great but what I like to do is go to the extra mile I'm here in a Beach Tow that's very customed to sell a house that's furnished and that's why you see this house it's all done and beautiful but if you're in a home that you're just flipping and you want to sell stage it you can there's cies that will come out they'll stage it like this for a couple months they'll charge a small fee just to rent that furniture but it looks like it's done and I always you take all this furniture out of this house this house is going to look completely different if it was just four walls yes you'll have nice light fixtures but to have this people can really picture themselves living here so I always say hey stage the house we just happen to be in the area that we end up Furnishing these and all these homes get sold now the importance of a designer if you are selling a custom home she or he is your best friend in with that CL you're the Builder you're designing it you've got a great architect you're sitting down you're sketching everything but now this designer is going to help with that potential custom home client to pick things like you know hey is this all going to be shipl or are we going to what kind of light fixtures are we going to put in here because it can be overwhelming for a custom home client to a go through all the design process of a house and then have to go and pick everything so to have that Designer there to assist them is incredible it's great for you where you don't have to get involved as the Builder and it's a great service that you can show to them hey I have my in-house designer we've got our lot we've got our plans we've got our designer and now we're ready to build this is the most important part is assembling a team to successfully build this house whether it's for you as the Builder or if it's for that custom home client what I like to do is it starts with a project manager somebody that can be out there there because face it if you're a home builder you're going to be the business owner you can't be out there every day on the job site if you are something else is going to be missed accounting selections sales your job should be to keep the projects going and keep that pipeline going of work coming in especially if you're going to start to venture out into spec CS that's going to have a lot of time so you are a builder but you're also going to be the business owner so you have to have a project manager one of the things that I did was I had a project manager and to get them I would give them a piece of every Bill say you're building a house hey I'm going to give you $5,000 for every house that you built if we're doing a spec house I'm going to give you a $10,000 bonus what's that do now but you have to link it with a timeline if we get done one of the biggest things in construction timing some that the timing is we always below time and budget we talk about budget trying to pull that back and control it but how can you control timing the project matter is in the driver's seat of r bringing all the tasks and all the subcontractors in so if we say hey we need to build this house within 6 months and if you do there's a $10,000 bonus waiting for you at the end so get them involved give them a piece of the profits that is going to attract an excellent project manager and I guarantee you no other Builder is doing that and I used to do that I've done it from the beginning and I do it now so that's number one number two once you get to a point I have a selection manager in the office she go goes through every selection and keeps track of what door knobs what you know what we're going to be using for paint colors what we're going to be using for window style and I use a software program called Builder Trend where everything is uploaded into this Builder Trend program so selection coordinator now you can't get all this in the beginning right but you do have to start with that project manager eventually what I would suggest that you get to is to have a uh project manager a selection coordinator and someone I have called her a Financial Coordinator where she's going to bring all those draws in and she's going to work with the insurance companies and the banks and the inspections this is when you're doing 10 12 homes a year you can afford to add these people and one thing that I'm super proud of that I invented this role about 8 years ago is a delivery home coordinator and what this guy does for me is he goes the last two months of a home he'll go through it he does all the punch list he brings all the subs back all the painters back all the trimmers back and goes out and does all the punch list so the client doesn't have to and that is a huge selling feature so a lot of people say to me hey you have a lot of houses going on yes but look how my team is set up I have a project manager a selection coordinator a Financial Coordinator and a delivery coordinator no Building Company does that unless they're you know a worldwide or a big National home builder so get those four positions they're super crucial you can't have them all in the beginning uh but work your way up that the number one person that you need to get is that project manager a lot of times number one mistake people make as Builders they try to wear all those hats that I just talked about and if you do that something's going to suffer and the number one thing that's going to suffer is that pipeline of work you need to be a business owner you need to be a builder but you need to be a business owner looking for more Lots looking for more clients and that is the way that you will eventually lead yourself into a successful team and you will be successful one final bonus tip and I've been doing this for years and no business owner does this everybody that's been working for me for the last 10 15 years they call it a family it's a culture it's a family and how do you build that family every single person whether it's my project manager my Financial Coordinator my delivery coordinator every single one of them gets a piece of every deal they get a bonus and it's all structured based on their position I go one step further I've had subcontractors and I've had vendors that don't particularly like their boss b or their business owner but they love working for us and some of them have said hey I want to quit I want to move on don't quit here's what I'm going to do and I've talked to the business owners I want to give that particular employee of theirs a bonus cuz they're so instrumental on my team now this guy who wanted a bonus and a increase in salary he didn't necessarily get it from his boss who's in the vendor he got it from us he's happy he's now been with us for eight years and I've done it with some other trades too so I think that every everybody is very you got to think about that when you sell a house or you sell a client a house how did I get here who helped me who was very instrumental in the process and reward them you know it could be a $500 the bonus it could be a $750 bonus it could be a $1,000 bonus these things add up and they are so powerful for these folks to be motivated and again it's that big team it's that family you know going after and that that common goal of getting this house built so I use that I use bonuses not just for my employees with also vendors employees as well okay so that was a lot of information I want to recap the number one thing that I think everybody should remember if they're getting into the building business is why they should be doing it and yes if you have a passion for building which I did if you love building go ahead get into building but you should really get in it for the purpose of being a custom home builder for that client but also working for yourself and doing that those spec homs and making that money and rolling that money into some type of passive income we're going to get to that in some other videos here but that should you really need to be thinking about that why you're even in the business number one two I'm going to show you in depth we touched about a little bit of today about how to find that lot there were some Secrets I showed you but I'm going to dive into exactly we're going to drive and we're going to really look and find those lots that may not be on the market we're going to go to my architect's office I'm going to show you exactly what it's like to see a stock plan to see what it's like to you know pick this plan that might fit that lot call the zoning office and see if this lot is going to fit and see how instrumental that architect is going to be with you in guiding you across that process the next thing the design process we're going to sit down with my designer I'm going to show you how she does it I show her setup plans and how we can stay on budget the next thing we're going to dive into Builder Trend we're going to show you exactly how to list all these subcontractors how to bid that project out we're getting into square footage prices we'll show you how to send bids out and how to get those exact accurate figures where you don't go over budget and the third thing how do we build this I'm going to bring you on job sites you're going to meet my people you're going to meet my project managers you're going to meet my selection coordinators my delivery coordinators and my home selection coordinators as well so that whole team that you're going to see exactly from the beginning to the end and how that house is built and hopefully you guys pick that path of doing your own spec house I'm going to show you how to make a profit and what to do with that profit so join me on the journey here of how to become a successful home builder as for me I'm on my next project I got to find my next lot [Music]
