[kermitology]

I just went through this, so heed my advice.

1. Make sure you understand that you need to basically have a float of about $100k. If you don't have that, you're going to have a bad time.

Also, you're likely going to want to buy a house fit for demolition, since if you want to buy land, you have to buy it outright. You can't carry a mortgage on land without a structure for "housing."

Get a contractor you can trust, and keep on him about things like budget. I tried to keep my contractor on a tight line, but he got so swamped with projects all happening at the same time that we ended up about $40k over budget, which is unacceptable, and I'm still fighting with him about it.

It is one of the most stressful things you can go through, especially when things aren't going according to plan. For example, with my project, we ended up having to dedicate a corner of our lot to the city, which meant that everyone on the mortgage had to sign off on the subdivision.. Including the mortgager, which, when they found out we had knocked down the house, demanded payment in full within 30 days, so I had to scramble to find bridge financing of $300k.

If you do a semi, you can probably get away with $350k in construction costs plus $200k or so in land investment, but that's more complicated and expensive if your carrying both sites. In my situation we built with friends, so the burden was halved, but the ability to turn around and sell the other half wasn't there. But again.. Stress city.

PM me if you want to know more. But I strongly caution you that doing this kind of thing where you're in charge is really hard on the body and mind.