Owner Builder Savings Potential 

I started as owner builder. As each home got finished I sold it & started again. Never had a client, my family travel the world. I got registered as a builder. Built over 600 homes. I am now retired. I had a great life in Australia. Build your own home. My hammer hand worked with me for over 27 years & his own home is now worth 2 million today. Good luck to all that build.

I can verify that this is roughly the markup %, or higher. There's a reason builders and contractors are ridiculously rich and retire early. You're paying for that. My neighbour built three houses on his own and flipped them. He wiped out his mortgage and put $175K in the bank. Insane. I took on the GC for my build in 2009. I was being gouged by almost every contractor. Some even admitted it and seemed to enjoy bragging about how much money they were making each year. I hired supposed 'expert' framers that had framed a bunch of houses in Calgary and had to make them re-do almost every door and closet in the house. Apparently 3/4" out in the corners is 'acceptable' to the experts!? Note to self...never buy a house in Calgary. I will be doing MOST of my next build on my own with my sons, except some of the finishing stuff that I hate doing. Also, simplify your design, check your ego at the door, and shrink the square footage. Makes the job a lot easier, and reduces a lifetime property tax bill.

We originally were going to build our own home (owner builder) because my dad is a retired contractor and can help us. We picked out our house plan, paid to have cost to build estimate done thru the plan company. It was $255,000 and that included a general contractor for $40k-we found that odd because dad was making $90k per house in 2008. Since it was so cheap we decided to just get it build because all the hassle of building would be eliminated and it would be worth $40k. We then got it priced thru a contractor and it was going to be almost $400k! So now we are back to the original plan of building it ourselves. It's weird the price was so off from the estimate because everyone talks about how it is normally cheaper than estimated. A third party estimated the estimate is within 10% of the actual cost so I'm hoping that just the contractor price was off as we live in north east Tennessee and tons of people from California are coming here and buying up everything. You used to get a new house for $120k, they are now $350k. You also could find a decent used home for $79k but that same house would now be $300k. It's crazy.

I think price/profit is different by the area that your building in and could range for 20-40 %.The cost for an owner builder can vary by the sweat equity of the owner builder, family and friends help in the labor of the build. Also the newbie can blow the budget with constant changes, upgrades,and mistakes. I have built several houses over the years and will build my next home because of the cost savings. I love your videos and I think it is great for owner builder’s!

I am breaking ground next year. I have had quotes from 400 to 600k by builders. I decided to do it all myself except poring the slab. We will see how it goes.

It all depends on where you are building. In our metro area, market is 35%, but near the mountains the markup is 75%. We can build for $200 a sq foot in Charlotte, and the cheapest you can find near Boone, NC is $235/ sq foot. I've priced it out, and it is 30% cheaper to truck in a drywall crew from Charlotte, drive them 2.5 hours to the mountains, get 5 motel rooms, and food for M-Th in two consecutive weeks than it is to have the local contractor do the work.

I’m currently building my own house. I’m saving 30% on my house. That’s without the latest appraisal. However, it’s difficult to manage the trades but I’m getting it done.

As a GC I think your notion is good. I do think Using DR Horton's markup as the model is fairly misleading. Additionally, it is probably prudent to mention that when you act as the GC you are in charge of sub selection and so could end up costing yourself significantly more money too. When you hire a GC they buffer that. And one with integrity, who stands behind their product, will take the mistakes of the subs on the chin and make it right as their "business" model to maintain their reputation and referral base. Additionally, the time and stress it takes to run a home build or large scale renovation is significant, and ultimately what the homeowner is trading their hard earned cash to avoid. It would probably be fair to position it this way in an initial or introductory video on the topic.

Im very interested in becoming an owner builder. I love the Den Outdoors designs.

Thanks so much for the info! I’ve recently bought an acre, hope to build soon. I’m a single parent and I need as much help as possible on a cheaper alternative.

as a homebuilder of 20 years, I've never made a 43% profit. 15-20% gross profit is industry standard, as with many other industries as well. and then a net profit of about 5-10%.

Thanks for sharing it!

There wil always be a markup. How can contractors make a profit after paying overhead expenses? The 43 was eye opening though and actually good to know as we consider a new build in the next few years

This is such great information. Thank you Mike. Keep up the great work.

Thank you for your videos they are the most helpful! I especially like to see the floor plans and houses that are actually affordable and you show the cost for everything. Can never get enough of those!

Unfortunately, if you have to have a contractor do some of the work, and you probably will, you're likely to get price gouged. Contractors are looking to make up for losses of the past couple years. I've been wanting to get started but it's still too expensive and product availability isn't back to normal yet if it ever will be. Buying lumber and other construction supplies here and there. What I don't want is to get the house framed then have another price explosion or product availability dry up leaving a wood structure not dried in for mother nature to do damage for who knows how long. Very frustrating.

Wow… i have plans to build 6 micro cabins as rentals. Have half the money already for the supply list really should look into building/managing myself. Each are estimated to cost $45K built with prevailing costs. Could cut that to maybe 30K

Looking to build rural. What’s your thought on steel building homes? 30x40 steel building with lean-to’s for a carport and porch. In my area one comes delivered and installed in the 30-40k range.

Yes, I am trying to save money as an Owner Builder but my biggest reason is to get good workmanship instead of all the terrible work done by so many Contractors. Contractor workmanship is at an all time low - of course, not all Contractors. And, NO, they do not deserve what they charge when they create so many future problems.

Gross profits minus overhead costs, sales commissions, bank loan charges and lot holding fees means that gross profit equals about ten to fifteen percent real profit. The average custom home builder, which of been for forty years makes twenty percent profit before overhead which is about five percent. Building a quality home is a full time job. Prefer builders usually don’t have the time to manage a job and their every day job. Believe me when I say being a general contractor builder is the lowest paid job out there except flipping burgers. And the liability is crazy. The majority of small to medium custom builders will go bankrupt at some point in their career. Wanna build your own home, good for it. It’ll be a valuable lesson.

The iPhone makeup is actually 300%. The 75% figure is for the gross margin, which is (gross profit / total sale price).

Have you done any builds in Southern Cali, specifically San Diego County? Do you think your material is relevant to the San Diego area? We are in escrow on a parcel and are venturing down that road! Looking for as much wisdom and guidance along the way as I definitely like the idea of being able to save up to 43% 😂

Do builders have other “unusual” costs which they need to cover with that markup? Like liability insurance, for example.

Builders try to charge more if they think you are wealthy. I saved about 50% when I owner built my house in 1988.

With ur info and other channels im more than ready to take on this GC myself thanks

I think there's room to potentially look at portions of the job. I'm a builder/GC. I have some clients that wanted to save money and manage the finish process - this is everything after the drywall - they were happy to hire kitchen folks, hire flooring directly, paint, etc. I don't think it's wise for a homeowner to take on the structural and MEP portion of the build even if it's licensed trades that they're going to hire.

I don’t know any builder making that kind of profit. NHBA looks at all the builders and the top profit was 19%.

Just completed my build, appraisal just came in at a little over 45% over my costs.

Well in fairness, I do avoid Apple products in large part because of the high cost. And it's not so much that I care about their markup -- if they could make a laptop with 75% margin and it was cheaper than an equivalent HP laptop with a margin of 35% -- I buy the lower cost laptop regardless how much profit Apple makes. But I understand the point you're trying to make.

How are owner builders getting construction loans nowadays? All the banks I have called want a licensed contractor involved.

The cost saving tips were essentially “ask friends and relatives to do work for you for free” lol Please don’t be that person. Most people I know that ask for help are the same ones that never offer any help.

A couple thousand homes? How many homes do you build each year?

So. Can you be an owner builder and receive a construction loan to permanent mortgage?

Hi I am a truss designer, in my service I provide truss layout and design. also provide quantity takeoff for construction jobs i/c; MEP. Thank you Y

Steve Jobs had end to end control till the end & beyond. I don’t complain about the older Apple products I get for pennies on the dollar because Nobody has a gun to my head to upgrade twice a year. That’s wasteful in my opinion. There is a workaround on everything. Owner builder,out. Thx.

I am a Veteran and technical Project Manager. Are you aware of a Mortgage company that will allow "Owner - Builder" for a combined Construction Loan with migration to a 30 year VA Mortgage?

Yeah I’m all for making a profit and shit but when you make 2x what you’re employees yearly wages are on one house you spend about 2 months on…. That’s fuckin bullshit. Builders are definitely a big problem rn

Wait to you see the markup after the mortgage is paid. lol.

wtf are you talking about the apple phone price is fkn insane now. also 43% of 300,000 is way more than 75% on 1000 dollars. Who would have guessed a builder is pro builders charging large sums of money.

who is building in Jasper, GA

I will build my own house. No need for any subs.

So sickening to think human do this to each other. One man's riches cost another family 15 to 30 years of payments.

Contractors in expensive housing markets are not trying to make a profit, they are trying to retire off the profit from building your house! Never ever ever willl i give a contractor to build my home ever. Id rather stop working for 1 year and i will still be ahead at least 5 years of work by doing it myself! Lying is like air to contractors. NO THANK U. Also most home owners will 100 percent do a better job, seen so many contractors who know nothing but yap yap yap toot their own horn and talk crap about others and their work, same crap over and over again. No thanks..Bye bye

Where do you find the subs, trades people, brick layer, concrete pour, framers, drywall installer?

Im very interested in becoming an owner builder. I love the Den Outdoors designs.