Alright, so this video is all about buying land here in the city of Temecula, California. If you're thinking about buying vacant land and building a custom home or anything close to that, I think this is going to be a really helpful video for you. We're going to talk about is it a good idea, is it a bad idea? Is it something I recommend? Is it something I don't recommend? Go over some pros and cons. So let's go ahead and get into it. Hey guys. Hey again, my name is Justin Short. I'm a realtor and team leader with a short real estate team here in Temecula, California, in Murrieta California here at Keller Williams. And this video is all about buying land here in the city of Temecula. So is it a good idea? Is it a bad idea? Is it something I recommend? Some pros and cons, things like that.

So if this is something you are considering, I think this is going to be really helpful. It may hopefully help give you some perspective on what it's like to actually buy and build here in the city of Temecula. But before we get into all the information, do me a favor, please hit like please hit subscribe here on the channel. Obviously it helps me, it helps my channel as we're trying to continue to grow it. And then we have new videos that we put out each and every week. And then if you guys have any real estate questions, of course you can feel free to reach out anytime. I'd love to hear from you so you can feel free, you can call, you can text, or you can email me. You're going to see my information either down below this video or there at the end.

So of course I would love to have you reach out and be happy to do anything we can to help you and your family with your search here. But we're going to start, so we'll talk about land. And so really just to give some perspective, what we are talking about is if you as an individual are thinking about going out and buying a plot of vacant land and you want to build a custom home on that plot of vacant land. So this does not apply to buying a new construction from a mass builder. So for example, my wife and I, we bought a home a couple of years ago now that was new construction from a builder. Our home was being built by Woodside. So they have their sales center and they're building 500 different houses. And we went and picked out our lot and they built it.

We moved in after it closed. That's not what we're talking about. That's buying new construction. That is not buying vacant land. So we're talking about buying vacant land, you're buying a piece of property and you're building your own custom home, your own contractor dealing with that whole thing to yourself. So this is a question that I get from a lot of people when they are thinking about relocating here. And really the reason for it is because if you build your own custom home, you get to build exactly what you're looking for and you get to come up with the floor plan or find a floor plan that you like, get all the right specs, the right ceiling height, the right room sizes, the right number of bedrooms and bathrooms, layout, single story versus two story, get a position where you want on the lot, ect.

There's a lot of advantages to building something yourself for sure, and that's kind of the draw. That's why people always ask about it or like I mentioned, when people are looking to upgrade, they're thinking they've selling their home and they, well, hey, I'm going to go, might as well just build this 4,000 square foot home if I'm going to upgrade and get exactly what I want. Overall, this is something that I do not recommend to people. I have had clients do this in the past, I have helped clients do this in the past, but for most people it's not going to be the right fit. And the reason being, there's a few things. So one is going to be the timeline. So if you say today, if you found a lot, which can be difficult to find the right lot, but if you found the right lot that you're looking for and you want to build your dream home there on that property, awesome.

But you have to keep in mind the timeline that it's going to take in order to do that. So if you buy that vacant land, you buy it today, you write an offer you in two or three weeks, maybe you can own that property and then that property is yours and then you got to start this whole construction process. It's going to take a lot of time to, you're dealing, you're dealing with architects, drawing up plans for the house, all your blueprints, all that type of stuff you're doing with contractors. You're probably getting bids from multiple contractors. You are going to be working on the contractor's timeline depending on how available they are. Are they going to be able to start in 60 days? Are they going to be able to start in 120 days? Are they going to be able to start on 180 days on your project?

And then once your construction project starts, then you are also dealing with your normal construction, all the subcontractors, all the different vendors, all the different people that you got to deal with along with the city and the county dealing with all your permits and dealing all that and going back and forth, et cetera. So it's just a very long drawn out process. If you were going to build your own custom home, your quickest timeline is probably going to be right around that eight to nine months ballpark from the time of, Hey, I want to do this to the time your home is ready. And that would be blazing, blazing fast. It is much more reasonable. That could be a two year process by the time you've searched to find the right lot to deal with contractors and bids and all these different types of things.

So it's going to be quite a long drawn out process. So depending on your situation, if you can wait nine months to two years in order to move into your dream home, then maybe building is a decent option for you. But a lot of people don't have that flexibility. They're selling a house, they don't have temporary housing in between or they're moving from another state, they're starting their job, they're coming. So they don't have that type of flexibility. So that is a big one here. Just the timeline can be really difficult in California in general. Number two and specific to the city of Temecula is bottom line. There's just not a lot of vacant land that is out there. So there are few and far between vacant lots that pop up that are available for residential building because the city of Temecula, most of the city started being built kind of the late eighties, early nineties through 2000, 2003. That's when these big builders came up, bought a bottle of land, built all this construction in all this infrastructure. Since then, there's not a ton of options left for housing. So there are still new construction projects going on today. Yes. So they are out there, they do exist. There's just not going to be a lot of 'em.

The farther you get away from the center of town, the more options are going to have. So the more remote, a little bit further out you go, you're going to see more vacant land options. And actually you'll see some areas that are, they show the city of Temecula, but they're actually technically part of the county. You'll see some more options out there, but there's not a ton of options out there to find on vacant land. So that'd be another point. And the third point I wanted to mention is the average cost to build, it's really, really high right now. So as is everything, gas is expensive, groceries are expensive, going out to eat is expensive, everything is expensive. And so when you're hiring contractors and all these subcontractors, things are a lot more expensive to buy. So your price per square foot that you're going to pay is significant.

So that's something you got to keep in mind is just your cost to build is so high right now. You are going to pay a premium to build your custom home as opposed to buying something else as opposed to what a resell value would be. That'd be one. The next thing I might mention is just the way you can pay for your property. So when you are going to buy a piece of vacant land, then this is the number one question, number one conversation I have with people. It's people think, okay, well hey, I'm going to go ahead, I'm going to go buy that piece of land. I saw one that I like, it's only like $400,000. I'm going to go ahead and I'll get a loan for that $400,000. And really the truth is it is very, very difficult to get a loan on a piece of vacant land.

So a traditional bank, a traditional lender will not loan on vacant land. They only want a loan on a property that has a house on there. So structure, they do not loan on vacant land. So because of that, I would say 90% of the time buying vacant land must be a cash transaction. There are one or two banks that are out there that I'm aware of that will loan on vacant land. They're not great terms, it's kind of a difficult process. It can be done. They have some credit score requirements, they have some major down payment requirements, usually about 30%. The loan terms aren't super great. Usually it's more of a 20 year loan as opposed to 30 year and it's a higher rate. So we might be paying 8%, 9%, 10% interest on that vacant land loan. So there's not a ton of great options there.

Or what is more common if you're financing is like an owner carry situation. So basically the owner owns a piece of vacant land, you give them a down payment. Let's say it's worth $400,000, you're going to give them $200,000 down and you finance the other 200, but the previous owner is the bank, so he finances it back to you. So that is relatively common. Usually have some short period of payback, two year note, three year note, five year note, something like that. Those terms can be negotiable, but that's more common than a true bank loan on a piece of vacant land at least. So because of those reasons, building new construction or building your dream home, your dream custom home on a piece of vacant land, it can be super difficult. It's not the most attainable thing for people to do because of those different challenges.

The big one is the financing. Not a lot to choose from. I really recommend to most people to look for a resale home that is close to what you want. So you can go in, you can buy it, and then you can make some edits. So you can go in, you can maybe change the floor plan a little bit. You can knock down a wall, you can remodel the kitchen and take that old crummy kitchen, make it nice and new and shiny. Get the color combos that you want, maybe add some extra cabinets, that type of thing. Remodel the bathrooms, redo flooring, that type of stuff is very, very doable and much easier to do than building a new home on a piece of vacant land. The other things that I wanted to mention is there are some hidden costs that people don't think about when they are looking to build.

So number one is grading. So when you say you're going to buy a property, let's say it's an acre and you need to have a nice spot to put your house and so you can flatten everything out so flat when you flatten that out and get your area to build, it's called grading, getting it all leveled and getting the right area to build that can be super, super expensive, especially if you don't either don't have dirt or you have too much dirt. So anytime you have to move dirt around, it can be super expensive. I've had clients spend tens of thousands to hundreds of thousands of dollars to bring dirt in, to send dirt out because you got to take it somewhere, right? There's only so many places you could take it, so you got to find the right places to send it. So that can be a really difficult process.

The grading and the other big one is the utilities. So your cost to connect to utilities can definitely be high on your cost to bring utilities out. So it's really, really easy when you buy a piece of vacant land to connect to utilities, you're going to spend an easy 20 grand per utility. So 20 grand for electricity. If you have city water, it's going to be probably 20 grand to connect to water. If you're going to be connected to sewer, it's going to be 20 grand for sewer, maybe close to that if you're going to be doing a septic system with all your permits and le lines and all that type of stuff. And then if you have natural gas, you're going to pay to connect to that as well. So that's an easy 20 k just to connect. Just all the utilities are right out in the street and if you have to bring them out at all, if you have to bring the electricity out a half mile from the other neighbor's house, it's going to be a pretty penny.

It's going to cost quite a bit. So there's definitely some big hidden costs there as well. Alright, so I wanted to give the flip side and kind of talk about what situations it could be a good thing for you to build and to build your custom home. So the ideal situation and probably where it can pencil a lot and make the most amount of sense is if you are looking to buy something on a large lot and build a large home with going to have a lot of space and you want to be very remote, then building something could be somewhat feasible for you. Again, I mentioned, I think for most people it's going to make more sense to buy something resale, but you can have your own priorities and you might have your own goals as far as what you want to do. So the reason I say it's better to have more space right now is because of the lack of availability, because there's not a ton of vacant land in Temecula, you're going to find more options when you go to more remote areas.

So a little bit farther out, away from the freeway, away from the center of town. So when you get out to those areas, those tend to be more rural, bigger lots, usually closer to that minimum of one acre, A lot of times closer to four to five acres plus so bigger lots. So if you are looking for that type of space, you're going to have more options for sure. And then also when you're looking at those remote areas, if you value privacy, if you value being in a remote area and not being able to see your neighbors, then maybe you'll see some advantages to those locations that are a little bit farther out as well. But usually you're going to want to build a big home, something that's going to be 3,500 square feet plus maybe closer to 5,000 or 6,000, something that's a little bit further out and you're going to value that privacy.

And so if you have to drive say 20 minutes out to your house, you're not going to mind it so much. Hey, that to you that's going to be worth that privacy that's going to be out there. So hopefully that's some good information for you guys. I guess I feel like I talked pretty negative about building, but it can be really difficult for most people. It's not feasible for most, it's going to be more expensive than what most people think. If you have the means to pull it off and it is something you're interested in, I think it's always awesome to be able to end up with your dream home for sure. But there's just going to be some challenges. You got to be realistic about it and hopefully that's good information for you guys. So feel free to reach out and call, text, email, hopefully. Talk to you soon. Thanks.