This is your first home? ever?

Building is NEVER cheaper than buying something already there.

I personally wouldn't build and I wouldn't look for your "dream" home. Since you're both handy and have DIY skills, I'd find a fixer upper that has good bones that you could make "feel right". Learn on the fixer upper by buying the worst house you can afford (where the problems are mostly cosmetic and/or layout, but where the overall structure is good. Think buying a house that a 90 year lady who loved her house has lived in forever where people reject it because it has 50 year old carpeting and the kitchen is from the early 60's and the furniture looks old, dated and tired and there are frilly curtains on the windows) in the best neighborhood you can find. That usually means a neighborhood with excellent schools and/or near transportation/stores, etc.

Fix the house up over a 3-5 year period and then sell it and buy the land. You'll have learned what does and doesn't work and you'll probably find many of your house priorities have changed too.

That is what my ex and I did and we always came out ahead for DIY

Here's how Houzzers responded before.

I would start with finding a good, creative architect who is interested in exploring the challenge you propose, and who could give you and idea of the feasibility of converting the hanger into living space. Be prepared that converting the hanger may be less cheap and efficient than simply tearing it down and building from scratch, crazy though that may seem.

It is pretty hard to get financing from a bank for a DIY home. We built our last home, but was self financed for 90 % of the build. The other 10 % the home was completed enough that we were able to get a home equity loan from the bank.

Your proposed plan would need to be a 100% cash build. There isn’t a bank that would finance something like that, especially with first time homeowners who aren’t contractors themselves. A pole barn won’t meet residential building codes, and will cost more than building a standard entry level home to bring it up to residential standards. Starting with it will only handicap your efforts to build a real home. It WILL be a great storage building for site materials though!

Cut your teeth flipping a cute little fixer upper. See if you can make that work, and make some money from it. See if you’re cut out to work together for 6 hours after an 8 hour day at an income producing job. If you pick wisely, and do this a couple of times, you’ll have a lot of cash to invest in building that dream home.

The family land isn’t going away. It will take a couple of years just to get the paperwork to happen to separate it from the main portion and to get the soils testing and septic and all the rest of the site prep done. Target that build to be 5 years from now. You ought to be ready by then, have a good amount of experience for bank approval, and have enough funds from flipping wisely to really make it happen nicely.

Let's start with this:

We are going to purchase a portion of the property that has a large pole barn/plane hanger on it.

Our goal is to build inside the existing hanger.

What does that mean?

Build within the existing structure using it as cover then take it down?

Convert the existing structure to living space?

Build a portable house ie a tiny house on a trailer in the existing structure then move it out once complete?

I think perhaps you need to readjust expectations. A first house is almost never a "dream house," it's more a "good enough, roof over our heads" house. Find an existing house that is in a good location, is in reasonable shape, and get the financing you need to buy it. Fix it up over time, build up your cash reserves, and plan for that dream home further down the road.

We are going to purchase a portion of the property that has a large pole barn/plane hanger on it. Our goal is to build inside the existing hanger.

To get a financing you need to be able to

1) Not just Purchase the "section of the property" but also legal survey both and subdivide with the county. Some places this subdivision is not a small matter depending on the zone. My in laws had to deal with 5 acres minimum buildable lot size. That's right: Each buildable lot has to have 5 acres. You can subdivide 10 acre into 7.5 and 2.5 but the 2.5 acres portion will not be buildable.

2) Develop own access road. Your in-laws may be ok with using their access road for now, but you really need to develop your own.

3) I would demo the hanger ... and start fresh with good floor plan and good foundation.

It is difficult [or impossible] to get financing for construction of anything on someone else's property, without access road, using hacked foundation and structure.

thank you all for your help! we understand how risky this is, we truely do! We will not have access to this land forever as his mother is dealing with some health issues and falling farther into debt. we will eventually lose everything his father worked for if she is foreclosed on or we will eventually be inherited all the debt. if we get onto the property now we are hoping to help out or at least get behind the bullet. we are having a contractor come out to take a look to tell us our best bet. it is approx. 3.5 acres so we might have a possibility to build also. I suppose we will just get the contractor out there and go from there.

A pole barn is a temporary structure for animals, hay and farm machinery. It is not designed or built as a long-term permenant building.

Demolish it and built a proper buildin. Otherwise you are simply sinking money, labor and materials into a lost cause.

From your last comment, it sounds like you'd be better off selling off ALL the land and moving his Mom with you to your first home or move her to someplace else where she can be better taken care of.

I’d suggest setting up a meeting with a good financial planner. There are a lot of moving parts. Sentiment doesn’t always ensure that you make the best decision for your future. In fact, it can cloud it pretty badly. —-Says the person who bought her grandparents house without enough money to handle its old house repairs and had to learn to DIY a LOT because of that. I was lucky. It didn’t bankrupt me.

I have to agree with CP. You are going to be pouring money into a house (assuming you can get financing) on land that you may well lose. It makes no sense. Separate your finances from his mother's because you do not want to be facing a lifetime of dealing with her debt. Find a house you can live in, and if necessary, move your mother in (she'd probably be better cutting her losses now than going through the stress of potentially losing everything) but do not put your own financial future in a straitjacket.

I'm sorry your fiance's mom is having health and financial issues. But ditto to what the others have said, that this is not a good place to START to learn about home building and tackling DIY projects. Find a fixer upper and learn. Sell this family land, or figure out a way to get it cheap and sit on it for a few years.

My DH and I have been married for 18 years. Our first house together was a 1100 sq. foot cottage purchased when we were engaged from the original owner (built in 1935). In that house, we LEARNED sheetrocking, window glazing, painting, stripping old wood, installing and refinishing hardwood flooring, tiling, plumbing, electrical, patio paving work, concrete driveway, cabinet installation, homemade concrete countertops (don't recommend), exterior siding and landscaping.

Sold it for $60K profit 3 years later.

Next house was a 2000 sq foot 1921 tudor fixer where we learned MORE of the above, PLUS turning an attic into usable/livable space, bathroom addition, insulation, load bearing walls, window replacement/installation, and kitchen cabinet painting. All while mostly pregnant or raising a baby/toddler.

Sold it for $200K profit 3 years later.

Third house was a 2200 sq foot 1940 ranch fixer where we gutted it to the studs, added a second story plus living room addition and learned how to manage and write large checks to sub-contractors to do most of the work while still tackling the DIY stuff we could.

Sold it for $600K profit 11 years later.

Fourth house = new construction dream home. Still DIYing a lot, but have learned from being married 18 years what we work well together on and what we don't (he hates painting, I hate landscaping). And what we're good at and what we're not (sheetrock is the devil).

Moral of the story is don't start at dream home/family land. You'll get there eventually, be patient.

Good luck!

My question, or at least the start of my questions, is how would we go about getting the funding for this kinda project?

As other have said, this is a tough sell. The bank MIGHT go for it only because you'd have the paid-in-full land as collateral. What percentage of the house are you able to "put down"? That'll make a difference.

Funding is going to be difficult to find /a real long shot. IF you can get such a loan, the interest rate will be high, whereas, the "cute little fixer upper" that someone else suggested can be bought for a low interest rate.

This is your first home? ever?

Yeah, building a first house isn't a great idea. You learn SO VERY MUCH about what you really like /what really matters by being a home owner.

A first house is almost never a "dream house," it's more a "good enough, roof over our heads" house. Find an existing house that is in a good location, is in reasonable shape, and get the financing you need to buy it.

Yes, this -- but take away "almost" in the first line. I totally understand wanting a nice, stylish place that looks like it could be on HGTV, but that's really not the way the world works. You start out in a little inexpensive place with one bathroom, no pantry and linoleum in the living room, and you "move up".

You say you figure something that costs so much should be something you really love. No. This is HGTV whispering in your ear. It's not the real world. You cannot expect to get everything you desire in your first house. A house that's a good long-term financial choice is so much more important than the details of your first house.

That you couldn't find a house AND you couldn't find property makes me suspect you're suffering from a classic case of "champagne taste and beer budget".

You're not going to like what I'm going to suggest: Have you considered purchasing the land and putting a used mobile home on it? I know, I know, a mobile home is no one's dream home, but a used one can be had literally for "take up payments", and it's exponentially cheaper than anything you can build (especially cheaper than refurbishing an existing building). Or how about buying a used RV? You can go ahead and pay for the land, the road, and the utilities now ... and plan for a real dream home down the road. It's a long-term proposition.

1) Not just Purchase the "section of the property" but also legal survey both and subdivide with the county. Some places this subdivision is not a small matter depending on the zone. My in laws had to deal with 5 acres minimum buildable lot size. That's right: Each buildable lot has to have 5 acres. You can subdivide 10 acre into 7.5 and 2.5 but the 2.5 acres portion will not be buildable.

We own property, and -- yes -- our county has similar laws. Not easy to get around.

We will not have access to this land forever as his mother is dealing with some health issues and falling farther into debt. we will eventually lose everything his father worked for if she is foreclosed on or we will eventually be inherited all the debt.

Okay, that's a different (and unfortunate) story. Perhaps selling you the land now would be a way to insulate it from loss? With this in mind, definitely talk to a tax attorney -- a one hour visit to such a person really saved me and my brother from making a BIG mistake about a decade ago.

How attached is your husband to this land?

Could you help by moving in with her /buying the whole property (not just the part with the barn)? You'd be available to help with her health issues, and perhaps she could pay you a bit of rent /be able to pay more towards her debt.

I’d suggest setting up a meeting with a good financial planner. There are a lot of moving parts.

Excellent advice. I think you are indeed "flailing in the dark", and an expert who can look at your specifics /who knows your area can save you from many mistakes.

A pole barn is a temporary structure for animals, hay and farm
machinery. It is not designed or built as a long-term permenant
building.

Actually, around here (midwest), people have finished homes inside pole barn walls. They are built as permanent structures.

You said you've been looking for a year and now it's "crunch time." What does that mean? Building takes a time. Longer than finding a decent first house in most markets, I'd be willing to bet.

Building a pole barn as a permanent structure, and retrofitting an existing pole barn are two different things.

And as for permanent pole barns, they are simply redundant with a standard stick-framed house construction, since the poles are really unnecessary in a permanent building. Often, wall and roof construction in these structures are much lower quality than a stick-framed house.

cp.....You ALWAYS save thousands if you are an O/B, IF you get GC prices. ALLOT cheaper than an existing house.

gth.....you must be in CA where houses go thru the roof in short time spams? $600k profit in 'just' 11yrs!!!!! That's 'unheard' of. You must be in CA or the NE.

Robin once again your ignorance regarding building is showing. Yes you can save as an O/B IF you have the prior skills to GC it yourself, have been in the building industry with a tax ID and have bought building supplies wholesale for years, know how to schedule any subs and have the time to be on site full time to catch any mistakes.

I think you need a lawyer and financial advice more than a bank An estate lawyer probably

You cant inherit debt. However the land, if it belongs to your husbands mother, could be sold to cover debts. Before you buold anything you would want to legally purchase the land from your in laws. your mil may also be legally allowed to gift you part of the value, but maybe not if she’s in a nursing home etc., as Medicaid may have a claim. Not a lawyer but this is my understanding. Also you need to be certain of existing liens on the property

You dont want to build and then get evicted because the land is taken to cover debts. Or because the land belongs to the government. An estate planner could help.

what is your main goal here? To keep the land? To get your first house? Or help your mother in law? There may be better options.

This is such an interesting question. We are also DIYers and bought property to build our own house on. We even talked about doing it a decade ago and it didn’t work out.

Can I say I’m SO GLAD it didn’t work out when we were younger and less experienced homeowners? We did what @cpartist said - bought a fixer upper (two, actually) and lived in them for the last decade, fixing them as we go and learning technical skills, space planning, where to splurge and where to cut costs, etc.

If we had built right away a decade ago we would have had a MUCH INFERIOR house over what we can build now. From a living standpoint and fit and finish, both. Currently we are in the second fixer upper as our temporary/investment property that we are fixing and living in during the build we will start next year. This gives us a staging ground so he time pressure is off us to get it done faster than we can afford. It’s also let us test out everything from cabinetry join methods to drywall finish, tile setting, pulling new wire and redoing an electrical panel, multiple types of plumbing and HVAC repairs and installs, even furniture building and cut/install of molding and trim.

This is our low stakes test house. And we can rent or sell it once we move, so sweat equity will pay dividends that will help cover our mortgage costs for the new place. I highly recommend doing it this way. Life and priorities change over the years, as do skills and finances. There is a reason even most of us diehard DIYers don’t start out with the ‘dream house build’ :)

We built our 2nd house and saved quite a bit of money DIYing. I don't know the amount since it was built in 1990. We did go to a couple builders and walked away after talking to them. We built a much better quality and bigger home than they were offering for the price. What we didn't know how to do we had friends and family in various trades that did. We had no problem getting builders prices on supplies since we were ordering such large quantities. They just listed us in their system as builders.

cp.....You ALWAYS save thousands if you are an O/B, IF you get GC prices. ALLOT cheaper than an existing house.

This statement is as false as the grammar is poor.

You cant inherit debt. However the land, if it belongs to your husbands mother, could be sold to cover debts.

Excellent advice. If you were to build on land that's in your MIL's name and she were to lose the land, you could lose your house. The real kicker: the bank wouldn't care if the house became unavailable to you -- they'd still want their money every month. The likely end game would be a ruined credit score. Beware!

You SHOULD be terrified, as your post title indicates. A young first time low asset home buyer embroiled in major financial family drama, plus never having owned a house, plus a misguided plan to use an agricultural building, plus ridiculous HGTV expectations? That’s a great recipe for bankruptcy and a very hard lesson on dreams vs reality within a short period of time.

You’re obviously very young, so you’ll recover from the bankruptcy and drama within 10 years. But that’s going to be 10 years that could be put towards building assets and paying off a sensible small first home, or even second home, investment. This is far from anything sensible for a young couple to think about.

Get someone older snd wiser involved in this snd get the moms situation figured out first. That solution may or may not involve you and her land.

This is disaster in the making.

Find expert advice and reassess.

@robin0919 - Nope, Dallas, TX where our property values have skyrocketed over the last decade. There are other high growth areas outside of CA or NE. I'm not in a suburb, but in the city in a desirable area. Bought house + investments into it for $300K in 2006. Sold for $900K in 2017. So not unheard of outside of CA.