To conserve cash, and to maintain a healthy cash flow, is critical to bringing a construction project in on budget.
Our own situation is likely somewhat unique, but other owner builders should be able to get some ideas applicable to their own situation.
We were not able to sell our current house, so we have rented it in order to cover the expenses of ownership. This frees a little more cash for building. Not selling our house has reduced the money available for building, but in our case, not critically. Sometimes it is good to be retired, and have a regular fixed income.
The weather is getting better everyday. It will soon be time to get down to the nitty gritty of construction. There is still a lot of snow on our property, but it should be clear in a week or so. Possession date on our house is the end of next week, so we are packing up.
To conserve cash, we have decided to live in our motor home while we are building. We have electricity and, perhaps we can get water from our neighbors until our own is dug in. We will have to rely on our cell phones for now. We already have mobile internet, so we are well equipped. Living on site will save considerable on travel expenses. We are hoping the weather will warm enough that moving into the RV will not be too uncomfortable. If necessary we can move to a motel for a bit, but that uses up cash.
We are lucky to have a ready built garage on our site. That should give us enough storage, barely. It is already half full with construction supplies. On site storage is very convenient, and I would advise anyone to build your garage or storage shed first. If none is planned, an alternative is to rent a container for a few months. If you do not have your own truck, or utility trailer, you may need to rent a waste container for construction debris. Remember to budget for these incidentals.
Our RV is an older motor home. It had broken down on us a couple of years ago, and because we were just leaving for the winter, we bought another. Our plan was to fix the older one and sell it. Our plan didn’t work, so we sold the newer one instead. The older one is very nice and comfortable. It is just not quite so roomy. We will be setting it up, more or less permanently, for the summer.
The foregoing illustrates that it is always necessary to have back up plans for when things don’t happen exactly as you like. Luckily for us, the backup plans worked. Things could have got a little tight if none of them had.
We have still not received our development permit. It is needed before we can apply for building permits. With a little luck, it will arrive soon, as time is starting to get a little short. Delay, however, often seems to be a normal part of the process, so it is wise not to be too impatient.
Since we are not using any financing, and there are no other critical reasons for hurry, this will not have a negative effect on cash flow. It will give us time to think of other ways to conserve cash.
When we have our development permit, the next step is to dig in the water and sewer services, and to do the excavation. The contractor we chose for this had promised to come and have a look about a week ago. As I said, delay is normal. I guess I will have to call him again.
I have heard it said that patience is a virtue. In this process it is absolutely essential.