Happy Tuesday, Reader!
If you have a family member who served in the armed forces and is no longer with us - my thanks to them for their ultimate sacrifice on this Memorial Day Week!
And - if you or a family member served and still with us (or is currently serving) - thank you!!
SPEC Homes That Sit Are No Fun!
There! I said it! If you're a Home Builder who sells SPEC Homes (either exclusively OR as part of your product mix), you know that the key to these being successful is to actually SELL them, right?
If you're newer to the industry, and you're not quite sure what a SPEC Home is, fear not! I got your back. Here's an article I wrote that explains what one is.
The problem with a SPEC that doesn't sell is primarily a financial one.
Most Home Builders don't self-fund the building of these homes. Instead, they take out a loan (the old "use other people's money" mantra that you probably have heard at one point in your career).
And those that lend money to Home Builders don't do it for the love of building or just because they're nice. Those Lenders want to make a buck or two, too. And they do this by charging interest on the amount they loaned.
The longer a SPEC Home sits, the longer the balance of that loan is out - the more interest accrues. And that means you'll be paying more to the Lender each month.
So - if you have SPEC Homes in your mix - you'll want to properly plan to build a floorplan that will sell quickly (and give you a nice return for that speculating that you're doing!
Want some more tips on what to do when a SPEC Home DOESN'T Sell? I just so happen to be inviting a guest onto my Homebuilding Hot Seat this afternoon at 3:00 pm Eastern who, literally, wrote the book on what you should be doing with those unsold SPEC Homes.
Brook Jennings with Cannonball Moments is going to join me to talk about her new upcoming book, When Houses Don't Sell and will be available to answer your questions live!
I'd love to see you there. And - if you can't make it today - you can still sign up and get a recording of it later.