Published on 14, Nov 2022

Are You Ready to Be an Owner Builder? Eduard Gubarik of Builder Loans Helps You to Decide

In your mind, you can see it - your perfect dream home, one that sits along a lake or has a mountain view. You are at the right time in your life to build it and are ready to get started. One of the first decisions you face, however, is a big one: who will be in charge of its construction? While plenty of people choose to hire a contractor, you may be considering becoming an Owner Builder, which comes with undeniable advantages as well as a few potential negatives. Which one is right for you? As I have seen many times over my years at Builder Loans, the time you take to make your decision can mean the difference between relatively smooth sailing and very costly storms.

Everyone’s home build, experiences, and goals are different.

First, before I start, let me say how important it is that you don’t compare yourself to other people who have been Owner Builders. Your friend down the street, for example, may have managed the building of his home, but that doesn’t mean you have to. Instead, ask him a few questions to see how his experience went. What would he do differently? What worked for him? How much of his time did it occupy? How easy was it for him to get a builder loan? Try to get his honest opinion on what being an Owner Builder is really like and factor that into your decision.

Now, let’s get into the pros (and a few of the cons of each one).

You can save money by being an Owner Builder.

It is true that by cutting out the contractor, you can shave off 15-20% of your construction budget and Owner Builder loan, which is significant. Let’s delve into what that really means. If you eliminate the contractor, you will be going forward without his padding for profit, overhead, and supervision fees. That equates to thousands of dollars that you can easily use elsewhere, be it a new pool or payments on your mortgage or insurance. So far so good.

Before you decide, though, remember something else you will be losing: the contractor’s expertise and supervision. The reality for many people is that they need a contractor’s ability to manage the building of a home. They don’t realize that by being an Owner Builder, they will likely encounter issues that can quickly make costs go right back up, including:

• Poor planning
• Subcontractors
• On-site accidents
• Structural defects
• Expensive delays

Some of those issues can be anticipated with proper planning, of course. I only suggest that before you decide, you contrast the potential savings of going without a contractor vs. your own ability to manage a project that will throw a lot of surprises at you.

As an Owner Builder, you can more easily verify progress.

Without a contractor, information will come directly to you. This ultimately means three things: more transparency; more control over the details of the build, including the materials used and the quality of the work; and an ability to make changes more quickly.

Remember, though, that in order for the above to happen, you will need superior organization skills and a detailed understanding of how work will be directed from day to day. Without it, you may find yourself trying to sort out issues instead of enjoying the benefits of self-managing.

If you are an Owner Builder, you will be able to directly manage payments.

By controlling when and how payments are distributed to vendors, subcontractors, and manufacturers, you will hold people accountable for the work they do and give yourself a higher place from which you can negotiate terms and contracts. You can also avoid the material and labor markups that are charged by the middleman, a considerable advantage.

So long as you remain organized and have a solid accounting system, there are no potential cons to consider here.

You can build a network that will benefit your construction project and possible work in the future.

Labor is a big expense when a home is built, and tapping into any friends or family who have proven construction experience can help bring down costs. It’s also an excellent way to create a network to rely on when you need maintenance work or upgrades done down the road.

The potential con here is obvious: how much money you can save will be directly tied to how professional and reliable your friends or family members are. So, be careful to weigh your desire to save on costs vs. how much your network really can help you. Sometimes it’s better to pay more for verified experience so that expensive problems are less likely to arise from substandard work.

Now it’s time to talk about a few negatives that should be factored into your decision to be an Owner Builder.

Owner Builder construction loans, including in California, are not easy to find.

It is true that if you seek out an Owner Builder construction loan, you’re likely to have difficulty. Lenders are wary of cost overruns, poor construction planning, and delays in construction.

It is not impossible, however, to find an Owner Builder loan. At Builder Loans, we specialize in helping individuals to find financing for Owner Builder projects, and our terms and rates are very reasonable.

Being an Owner Builder is a significant time investment.

Remember your friend down the street who managed his own home build? He would tell you that in order to manage the construction of his home, he had to visit the site every day for hours. In fact, it was really like a second job, one that cut into how much time he spent at his real job. It’s something you never really realize until you’re knee-deep in blueprints, payments, and issues to resolve.

Only you can decide if being an Owner Builder is right for you.

Being an Owner Builder is incredibly fulfilling. You are directly involved in constructing the home that you may live in for years to come. It is very satisfying to manage the project from day to day, watching as your house takes shape and matches the vision in your mind. 

To know whether personally directing the build is the best decision, remember to consider your own experience, time, and budget. An honest assessment of all three will help you make the right choice for you and your home. 

Eduard Gubarik is the Founder/CEO of BuilderLoans.net, one of the best construction loan lenders in the industry. Eduard and his team know that the journey to a successful project isn’t always a straight line, so they are committed to being the financial partner their clients need. For more information about Owner Builder loans, please visit www.builderloans.net.