Building in a Boom Town


Recent discussions with prospective clients have got me thinking about a problem we face here in Central Texas: a shortage of lots for custom homes. I’ve heard from clients who want to be within walking distance of a certain school. Others want to be located in a certain Austin neighborhood that was built 60 years ago. Others want to build a “tiny house” in a subdivision of McMansions. I get it. These are all nice ideas. We’re still seeing impressive growth in Austin. They tell us 100 to 110 people move to the Austin area every day. Due to this explosive growth, any larger tracts of land are quickly snatched up by developers with deep pockets as soon as the land comes on the market. And do we really need another high-rise condo building?

So what do you do, if you’re looking for a lot where you can build a custom, energy-efficient home?

My first suggestion: Don’t move here. Okay, before I get the Chamber of Commerce all over me for being no-growth, let me explain.

Seriously, really think about it before you pack your bags and unpack in Austin. Sure, you fell in love with Austin after you attended ACL, SXSW, Old Settlers, Formula 1, etc. Who wouldn’t? But keep in mind we haven’t significantly increased our infrastructure in over thirty years, and we have a long way to go to solve our traffic problems. Welcome to Austin.

If you do decide to relocate, start your homework way before you get here.

As a custom builder, a big issue we often face is clients who come to Austin with unrealistic expectations.

Let me tell you straight up: Your money won’t go nearly as far in Austin as it did in wherever you’re moving from. Increase your budget. We’re in one of the hottest real estate markets in the country. We see houses with “Coming Soon” signs get multiple offers over the asking price. Be prepared. Get you money house in order first.

Your homework should start at home, with you. What are you looking for? A fixer-upper? A lot to build on? A tear-down? Are you looking in the city of Austin or in one of the suburb cities? Do you want to deal with a home-owners association? Do you want to be in a certain school district? Do you want to be near your work? Do you want to be near your church, grandchildren, shopping? Do you want an older established neighborhood with smaller homes, or a newer, modern subdivision with larger homes? Do you want to live in the county or rural area? Do you want solar panels, geo-thermal, and a rainwater harvesting system? Do you want a true zero-energy home? Once you have answered these questions, and many more, you can start looking.

Use a Realtor. Don’t worry about the cost, as the seller is paying the commission. A Realtor has access to the MLS (multi-listing service). Find a Realtor who’s knowledgeable about the area you are seeking. Many times they will know about lots or houses that are coming on the market. They can also give you more information about the schools, shopping, churches, et cetera in that area.

But don’t only use a Realtor.

Okay, here is where you have to get creative. I’m about to give you trade secrets that come from years of experience. So lean in and listen well. I’m not going to repeat myself. Get creative (ok just this once).

If you’re looking to be within a certain school district, go talk to people at the school. Everyone. Talk to the teachers, janitors, principal, bus drivers, everyone. Tell them what you’re looking for and ask for their help. You can do the same thing at churches, your new place of work, where you shop and eat. Ask everyone you know and everyone you don’t know. Be specific and be open minded. If you’re looking for a lot and someone tells you about an old house that needs to be turn down, go look at it. You never know how it might turn out.

Use the Internet. Spend some time on Google Maps and Google Earth to search the area you’re interested in. One of our clients found a lot this way. Then, you’re going to need to spend some time behind a windshield looking at property and houses. Yes, it’s easier to look at places on the weekend with less traffic, but before you slap down your hard-earned money, you need to make that same drive during the week. What would it be like for you to take the kids to school, then to work, and back? What’s the traffic really like? You might change your mind.

What could result from all this searching around? First, you might stumble upon FSBO’s – For Sale By Owner. Although a rare breed, FSBO’s are still out there. Second, you might find an interesting empty lot. Write down the address. Third, keep an eye out for For-Sale signs on telephone poles, which are usually located on the property lines. (If there’s an address on the sign, use the GPS on your phone to track it down.)

Now here’s what you do with that address when you get back home. Find the web site for the county appraisal district and do a property search by address. This will give you the owner’s name and address. It’s public record. Write them a letter and see if they’re interested in selling. Maybe you’ll get lucky and find a distant relative who inherited the property and is tired of paying the taxes on it. Be prepared to write lots of these letters and get very few responses, but all you need is one bite. Also, keep in mind a creative Realtor is likely doing the same thing to find lots, so make a fair offer.

As a motorcyclist, I always like to hear about the “barn find.” A barn find is that old motorcycle locked away in a shed somewhere under an old tarp with low mileage, little rust, starts only after ten tries, and the new owner found about it from the postal carrier. What, the postal carrier? Yep. I’ve heard about prospective house hunters spending time early in the mornings at the post office talking to the postal carriers to find out about empty houses, people moving, available lots, and so forth. Now that is getting creative.

My final piece of advice. I’ve said it before and I’ll say it again: Put your builder/designer/finance team together early in the process.

Before you ever make an offer on a piece of property -- whether it’s a lot, a house, or a tear-down -- have your builder look at it first. One of the biggest mistakes I’ve seen is clients who fell in love with the view on a property with no regard to the cost of building on it. Before you fall in love, call a builder. He can do quick research on the Internet and take a look at the property on Google Earth before he ever has to make a trip out to see it. If you don’t have a builder who’s willing look at a lot before you buy it, call me. I will.

Wishing you good luck!

-- Wayne

(See part 2 -- Working with the Environment)