From Owner Builder to Licensed Builder

We have been looking at buying our first investment property recently and then we thought of house and land package which has eventually trigged an idea of building ourselves (Owner Builder).
I have always had passion for building something. My first home (which was built when I was single) was a custom built and I was heavily involved in it and learned a lot. Now, my wife too has a passion towards building.
We are thinking of building our first investment property solely for learning reasons.

Regarding savings:
1) We are aware that we won’t be saving as much as a builder but we think we should at least be able to save 20k.
2) This 20K should just be enough to cover our loss of wages hence bringing savings to $0.
Having said that, saving is not our primary goal, learning is. We want to carry this learning forward and eventually become licensed residential builder.
My wife is only on 33k/annum at the moment and we have been looking at a career change for her. I am full time rostered employee and get lot of time off, sometimes as much as 1 week in between shifts. When I am unable to be on site, my wife will be.
Along with sorting owner builder process legalities, my wife will enrol into licensed residential builder course. By the time she finishes her course she will also have some practical experience and be able to subcontract a licensed builder for 2 years’ experience which is requirement for a building license. Once she has got her license and business pickups, I will quit my job and jump into it.

In regards to our owner build, to keep it least stressful and to avoid a shonky build:
1) I am thinking subcontracting the work to different reputable companies, backed up by warranties and liabilities (arising from poor workmanship) rather than tradies on gumtree.
2) Since for some of the trades we are unable to access the quality ourselves, I am thinking of hiring a reputable building surveyor to inspect our build throughout. Payments will be made to subcontracting companies after getting OK from the building surveyor and after fixes has been done, if required.
3) This might in fact cost us much than going through a big builder, but we would be able to get better quality.
In regards to construction loan, if bank does not lend us much (say 60%) or denies lending us, we can afford the build on our own.

What do you think of this idea? Any things we are missing? Any other concerns we should be aware of?

Another thing that we have in our mind is to build a couple of more houses as an owner builder and sell these? Any legal issues which can arise from that, I believe if do that we are effectively building to sell which law may frown upon, but Mrs has a different opinion.
Also if someone can please shed some light on the process of, How to become a licensed builder?
Thanks

 

Look into exhausting the owner builder avenue first, apply for you, your wife, kids, pets etc etc

Sounds like a well thought out plan but the licencing isnt as easy as they make it sound! You cannot just subby out you wife, she will need to be an employee on the books but also have a trade certificate of some kind. Also need to provide evidence of experience across a number of areas within building game eg tiling, kitchens, roofing, estimating

@Scott No Mates is a guru and @Brian84 has gone (going) through the process recently i believe

 

@webJockey - How many years have you got up your sleeve to get the requisite experience and qualifications?

 

Also it may be worth chatting to a few builders and let them know your intentions and get them to work in with you, under your owner/builder licence and your assisted supervision.
Find an older guy that may be nearing retirement or wont see you as a threat

I came across an older gent once who was up to house number 5 (kids were ownerbuilder at that stage) who would chip away over 12 months doing as much himself as he could and then subby out as he went. great retirement initiative

 

If every thing goes right she should be able able to start earning after completing the course and working under a licensed buider and should have her license after 3 to 3.5 years and be

 

In what capacity do you envisage a builder taking on your wife?

Tools

 

In a boxing ring?

 

Webjet, I admire your vision.

But, sooner or later (probably sooner) reality will hit like a tonne of bricks from a wall in a gale with insufficient brick ties and only sand and water for mortar.

I don't know what you do for a quid but go and try the building game for a while and then decide.

I once had aspirations of being a copper and approached the local constabulary for an application form. They immediately locked me up and I didn't see daylight for a week. Needless to say my enthusiasm for the job quickly diminished.

 

Was this because of all them murders that you'd done?

 

They were allegations only. Besides the CCTV image was too dark and grainy to nail anyone.

 

I think your ready now, what could go wrong with a well thought out plan and the desire.

This is not advice ***

 

It's not as easy as you will think to get your licence. I have been a carpenter for 16 years with my own company since 2005. I have cert iii in carpentry and cert iv in building and it still is t enough for fair trading. The want to see 2 years "experience" supervising hi sites from all aspects of the build.

For your wife to get the builders licence then she will have to get cert iii in carpentry or bricklaying or diploma in building or degree in building or Batchelor of housing through a university. Aswell as cert iv in building and construction. Good luck it's not easy and it definitely won't happen over night.

 

Believe it or not a builder is just a glorified project manager and in most cases they add little value.

Just about every trade workmanship can be inspected before and after by an expert so having a builder in most cases is more to coordinate trades than anything else. But just like the user above mentioned you are not gonna get a builders license just like that, there is a lot you need to do including tafe courses, work experience and having been on the payroll of another builder.

 

A good builder with trades that turn up when supposed to etc will save you a packet....owner builder or new person, good luck with it all......is a right pain.

 

What's plan B?

 

Craftsman builders have been around a long time before project managers came into existence. So they're irrelevant today?

PMs brought professionalism to commercial projects over 30 yrs ago. Nowadays every industry has project managers and many couldn't organise a **** up in a brewery.

 

Not sure I completely agree with that. Builders can add some value in some areas and are a PITA in other areas. A major point you overlooked was the builders warranty. That said, I have heard some people need to get assertive with their builder to get faults rectified.

 

Reading the comments and after listening to friends there is little modification to original plan....


First Year....

1) Skip Owner Builder idea because of warranty, insurance and loan issues.

2) Enrol in builder course myself. Evening classes.

3) Work part time with a builder simultaneously if possible.

4) Get some trade certs. Will pick easy trades like painting, carpet laying, installing laminate flooring etc.


At the end of the year...

5) Sit for License Exam/Interview****

6) Build and sell 3-4 houses.

7) Launch ourselves in the building market.

***Not sure how true it is, just heard that in Vic you don’t have to wait for 2 years (i.e. work under a big builder) to sit for license test. I have been told its tough but I can pass. Yes, they do take into consideration experience in other trades.


I do have master’s degree in business/marketing/project management which will help in setting up and market our business correctly. Hopefully it will also help in getting builder license because a builder is effectively a project manager (mainly).

I hope this plan will work... I hate bad building practices, and in all honesty, I have a vision to change this industry towards a positive and more trustworthy direction. I want to setup much higher standards in regards to customer satisfaction. I hate to see people, especially first home owners, being ripped off. And the whole reason behind building first few homes for ourselves is to learn at our own expense rather than wasting a customer's money. I would rather not do it at all than doing it wrong.

 

Best trade would be as a carpenter.

You need to understand how buildings are constructed. In Vic, you need to document this - with examples of buildings you have been involved in constructing.

You will need to be able to answer random questions from an interviewer about the buildings in your document folder. They can be about things like correct fall away from buildings, structure etc.

 

love the idea!.... BUT... you just priced yourself out of the industry!

... but if you can start building up a portfolio of jobs and then target the higher end clients or smaller sized quality builds you could be onto something

best to find someone who has done the Vic application recently to find out how strict it is. Being Vic you'll likely need a union logo tattooed to your forehead