It would be much cheaper to buy something already in exisitance. if land is 15k where you are, it must be a lcol area. have you priced lumber, wiring, fixtures etc… you’d be hard pressed to build under 40k unless you are looking at a true tiny house. why not save up and pay cash for something instead of spending years trying to build.

"I'm confident this can be accomplished for much cheaper."

I'm not, buy the time you factor in lost wages form not working for 6 months. One off by an inexperienced person will never be cheaper. You are way underthinking this. Classic case of you do not know what you do not know.

There's a quick way to check on your figures. First, check local land listings to find out if there is land available for $15,000. With well and septic, I imagine you're looking at at least an acre (I would hope a little more, that always seems tight to me for both). Then check local zoning laws. Our area has a minimum house size. Then do just a few rough calculations. Smallest house size requires x amount of foundation, roofing, drywall, studs. Add in a toilet, kitchen sink, bathroom sink, shower and basic appliances. Honestly, I will be shocked if just very basic materials don't put you over $25,000. Well and septic alone in our area are over that. Don't want to be a downer, my parents built their first house that way. But do a little homework and find out if it's anywhere near possible

This guy lives in a $50K boxable casita. He already owned the land. Needless to say, though I will, his ten children live with his various partners.

So, why not?

I'm open to where I live actually so wherever I can find a good deal on land is where I will do. No, I haven't priced lumber or any of that. I don't even know how I would do that and know if I'm getting a fair deal unless I design the building myself. Perhaps I should take a class on basic home architecture and building? Not trying to become an expert but just the basics to learn about what materials will be needed so I can do the calculation. Otherwise I really have no idea what the true cost is.

Sure, some people can do it -- I'm not one of them. Potential concerns:

- $40,000 isn't much, especially today with our supply chain problems.

- You say you have experience in construction -- do you have friends with whom you might barter for work?

- Don't forget the need for permits and inspections.

- Doing it yourself will take time-time-time. In the meantime you'll have to pay to live somewhere else. Include this cost in your figures.

- Sourcing your materials will take more time than you expect.

- This will cost more than buying an existing property. It's also easier to figure the final cost of an existing property.

- The absolute cheapest-of-the-cheap living option would be buying a used RV.

- Why don't you consider volunteering with Habitat for Humanity to build a couple houses -- they are super-efficient, and you'd pick up some skills. (That comes to mind because my sister works for them.)

This guy lives in a $50K boxable casita. He already owned the land.

That was interesting -- it can't be durable /long-lasting in any way. The tiny house layout looks like a comfortable motel room ... but I notice it has no closet.

I notice it has no closet.

Look again.

****

Note that utility hookup costs are not included. These can easily run into the tens of thousands of dollars.

So such tiny homes are more suited, I expect, to rural areas with fewer bureaucrats per sq. km. (At least, according to Houzz posters.)

Unfortunately, designing and building a house is not simple. Especially for the first time.

I admire your zeal and work ethic, but this is one of those situations where there are a zillion issues to plan, schedule and manage...maybe more!

Do you due diligence. Good luck!

I too, enjoy your attitude about this and your quest for charging forward in life. A goal of homeownership is admirable in my mind, though now it is questioned as being ever necessary by the younger generations.

You have an "equation" to solve. Your input is can't get money, so your output is to build yourself.

However, you don't know how to build, know nothing about building, don't even have the tools (literally and in experience), don't even know where to start.

You could, say, find a farmer willing, buy a prefab shed and port-a-potty, and pay them for electricity and water to live on a corner of their property. But if that cost $15K, in the end, has that met your goal of homeownership and given you a quality of life you want along the way?

So you apparently need a loan to afford any type of house in your region. Otherwise, if your goal of $40K was enough cash to enter the market, you could buy something and skip all this building yourself stuff. I assume you saying "can't get a loan" means you have exhausted all avenues of VA, FHA, and credit union avenues.

With a poor credit rating, I would disagree with the statement "don't have good credit but that doesn't mean I'm bad with money." Your credit is not based on how much money you make. There's a much larger discussion, but basically if you live within your means and take care of your financials, you would have good credit.

So it seems the best solution is to have patience. Take some time to work on your credit. Work towards earning more money - whether it's a different better paying job, a 2nd job, or going to college. Find or picture where you want to be in 5 years (a specific house, a city, single/married, kind of job, etc). Position yourself to make that happen with many increasing goals that you can check off, whether those are learning about construction or an amount of money in the bank.

We were talking to a young neighbor yesterday who bought land on our road. I live in a very rural area (think no building permits). Septic, electricity and water were going to cost him in excess of $20,000. So be sure to research utility cost in the area where the land is BEFORE you buy the land.

"Boxable Casita"

Maybe I should put an "Invest" button on my website?

Add some zeros to the price and the months spent doing this, and sure. Better start by building you moms a shed for the garden tractor first. Build a nice one. That may be where you need to live, if its zoned for that. It will use up all of your budget and then some. And then some more.

"I don't have good credit but that doesn't mean I'm bad with money...I'd like to do this for ....$40,000 cash (including like $15,000 for land)"

If you have $40,000 cash to spend, and you aren't "bad with money", then you would know to take that $40,000 and use it to pay down your debt. That would improve your credit rating, and ease what must be an enormous interest rate burden for your debt. Since you evidently would rather spend the $40,000 cash on building a house yourself though you have no skills or knowledge to do so, then you are indeed bad with money.

There is a law in physics, "For every action, there is an equal and opposite reaction". I think in construction it is, "Whatever you win today, you will lose tomorrow". A related axiom is, "A penny wise and a pound foolish".

You can certainly 𝐂𝐎𝐒𝐓 yourself significant money by going that route.

Cheapest approach is a damaged or rundown house somewhere in the midwest or rust belt states. You can get a property with utilities and building cheaper than installing utilities. Or, look into small town free lot if you build a house programs as then you could get ready to build land.

"Can you save money by designing and building your own home?"

Can you spend (waste) a lot money by designing and building your own home?

I agree with trying to find a preexisting property for $40,000 that you can fix up, just a quick example in OH:

https://www.zillow.com/columbus-oh/under-50000/

Another option - look around for a house that needs to be moved, eg, where a highway or such is going in. A friend of ours moved one - one story ranch - cost $25K for the move. That was about 10 years ago though. He already owned the land and also his lot was right off the main roads, so the moving folks could easily maneuver. He has said that was a big factor in the move pricing. (Raleigh NC)

This might be a better option if you're willing to relocate:

https://www.cheapoldhouses.com

Maybe find a house that will get moved? We've seen several small brick ranchers move as the last holdouts on a commercial stretch of road.

I wonder if a fixer-upper or foreclosure might be a better place to learn about homebuilding?

The good thing about building your own house is- everything is brand new with a long useful life. There are a lot of steps and learning time involved. Lucky for you, you've got the internet and YouTube. You also don't have to finish off the interior to move in and keep working on it. Another lucky thing is open concept. That makes design simpler. Stick to single floor.

Cheap old houses...in rural areas and small towns.

Remote working makes this a very viable route.

Here is another one, "He knows enough to be dangerous".

There are many levels of involvement in building a house. If you put the research time in you can save money. You can also end up with a better finished product. A builder has his profit as his primary goal. Not the quality of your home. Not much is required to get better quality than a trac house. Paying a builder for that gets you 'builder' grade. Mostly, minimum quality to get by at closing. Just going beyond minimum insulation and sealing will pay you back forever into the future. You have to decide your goals.

I notice it has no closet.

Look again.

I'm honestly not sure if that counts as a closet. I mean, I own a dress coat, a light jacket and a raincoat -- and I don't think that's excessive; yet, I don't think they could all fit in that space.

We were talking to a young neighbor yesterday who bought land on our road. I live in a very rural area (think no building permits). Septic, electricity and water were going to cost him in excess of $20,000. So be sure to research utility cost in the area where the land is BEFORE you buy the land.

Yes, a rural lot will cost more because your utilities have to "be brought in" from a longer distance. Longer driveways will cost more. Having wood, etc. delivered a longer distance will cost more. Driving into town to buy this-or-that will cost more. I've lived about half my life in a rural area ... the land is cheap, but the living isn't.

"I don't have good credit but that doesn't mean I'm bad with money...I'd like to do this for ....$40,000 cash (including like $15,000 for land)"If you have $40,000 cash to spend, and you aren't "bad with money", then you would know to take that $40,000 and use it to pay down your debt.

I don't believe in credit scores. Or, said differently, I don't believe credit scores are a good indication of whether you're good with money.

Case in point: When we were younger and were financing a car, the guy at the dealership called his buddy over and they said to us, "We don't see this often. You literally have a perfect credit score." We felt pretty good about ourselves, but -- note the irony -- at that point in our lives, we were still forced to finance a car. Fast-forward a decade: we were debt-free, our house was paid off, we were able to pay cash for our cars, and we had our kids' college accounts ready, and our retirement accounts were starting to look healthy. And our credit score went DOWN! Why? Because we were no longer utilizing credit as we were before!

I just retired last month, and I haven't actively thought about my credit score in years -- decades. Sometimes I see it at the bottom of my credit card statement, and I think, "I am more financially secure than that number indicates".

Cheapest approach is a damaged or rundown house somewhere in the midwest or rust belt states. You can get a property with utilities and building cheaper than installing utilities. Or, look into small town free lot if you build a house programs as then you could get ready to build land.

Agree with all, but I'm sticking with my previous answer: a used RV is the cheapest home you can have. Buy that today, then buy your land and start with your utilities ... and live in the RV while you work on the house.

There are many levels of involvement in building a house. If you put the research time in you can save money. You can also end up with a better finished product.

So true, so true.

@Mrs Pete - while I understand your point about the validity of credit scores, the OP has said they have bad credit to such a degree that they cannot get a loan. People with lower credit scores can still get a loan, but to be unable to get a loan at all means the person indeed has significant debt. And as pointed out in a comment above, it appears they are even closed out of VA, FHA, and credit union funds. But the OP also said they have $40,000 cash and that "$40,000 is not a hard limit". That contradiction says to me there is a problem with their ability to manage money.

"People with lower credit scores can still get a loan, but to be unable to get a loan at all means the person indeed has significant debt."

Your credit score doesn't really have anything to do with the amount of debt you have. It is entirely possible that the OP also has a bad debt to income ratio, but they mentioned bad credit and not a DTI problem.

Credit utilization, age of credit, credit mix, and credit inquiries all have some impact on your score. Payment history and non-medical judgments have a significant impact on your score.

It is entirely possible to have a credit score too low to finance a home and no debt.

Agree with all, but I'm sticking with my previous answer: a used RV is the cheapest home you can have. Buy that today, then buy your land and start with your utilities ... and live in the RV while you work on the house.

A used newer model with cosmetic not water damage off Copart can be a super deal. $60 membership plus $250 broker on a salvage lot and you're in.

Some jurisdictions require 1 week movement off your property every 6 months. Check that.

If it helps any, from what I found on the internet, a five-year Bachelor of Architecture (B.Arch) degree is likely to cost between $100,000 and $180,000. But that still may not make you good at designing houses.

Deciding to build your own house because your bad credit is preventing a loan is likely to be problematic. It is treating the symptom and not the problem and likely going to create more problems, one of which is the Boots theory. Getting your credit repaired enough to purchase a home is not typically a difficult or long process and will take much less knowledge, education, and time than DIYing a decent home build.

The economics of building a home are not a mystery. The various trades all exchange their knowledge and time for your money, which was presumably gained from your knowledge and time. You can likely save money by sacrificing a fantastic amount of your time. The real question is whether or not you have some other activity you could do more efficiently in order to pay the various trades.

Can a lot be purchased and a house built for $40,000? Probably. Can you do it? Probably not. The biggest problem is the lot, the most likely way to accomplish this is to buy a lot in a small town that (probably in a depressed area). These are typically lots that have previously had a structure that was removed or currently have a structure that has been condemned. A quick search on Zillow finds many of these lots well under $10,000.

Then almost all your money is going to have to go into systems and the exterior construction of the home. Fixtures, appliances, flooring, paint, etc. would likely all have to come from factory seconds or second hand stores. Even with that it is a big ask.

If you are trying to build a tiny house, there just isn't a lot to design. Go on Etsy and buy one of the "granny house" plans and pay a draftsman to produce buildable plans. Something like this.

Note: I am not saying the OP can do it and I am certainly not saying the OP should attempt it, but I suspect this is the easiest way to get close.

@Zeek Willington, Don't let that 40,000 burn a hole in your pockets.

Chill! Increase your credit score and then go after your dream.

I sent this to my 19 year old nephew and his score increased by 19% in no time.

To help increase your credit score:

Get a store credit card or a visa or master card and then, charge small items(undies, socks, toiletries, etc), and then pay it off in full every month.

This builds credit in no time.

You can find offers for these at creditcards.com and similar sites, with many offering cards with a $300 limit or so.

Make it a point to charge $50-$100 per month on it, never maxing out the limit. Then, pay the balance in full. Your credit rating will increase rapidly within just a few months.

$40K *might* get you an acre of land and a used single-wide mobile home. Add in septic and utility hookups, some modest repairs and/or cosmetic remodeling and you'll reach (and likely surpass) $40K rather quickly. We bought one about 6 years ago to put on our farm while we were living in another state. Trailer was $7500, moving it was $3K, septic was $3500, and a new A/C unit was $3500. Add in another $5K for new cabinets, vinyl flooring, and paint. Appliances were either included with it or we had on hand already. We already owned the land so that cost isn't factored in.

My point is that building is extremely expensive and not a DIY project unless you have experience and the time (think: years). You'll be much better off going the route I laid out above or finding a foreclosure. However, you'll need cash in hand, most likely, to buy any foreclosure at auction.

If you are just starting out and have no established credit history, your credit score can be garbage.

OP, have you considered a land contract as an option to purchase an existing home?