A friend shared a statement with me: “Life hack: instead of buying a brand new home, you can buy land from land banks for $1000 and use your LLC to get a construction loan and build the same house and have equity that’s tax-free.” What does this even mean?
It means your friend knows very little about construction and real estate.
I go with this explanation.
OP’s friend knows a lot of buzzwords!
Did he see this from some Instagram influencer selling their ‘course’ for $1000? Or has he actually done it? I know what I would bet on.
A fool and his money are soon parted. Do not take financial advice from or loan money to this friend.
You CAN get cheap/free land, but there’s a reason it’s free, especially in places like Detroit or rural areas. They do this to increase their tax base.
None of that changes the taxation of a personal home. An LLC does not magically make things tax-free. Plus, equity is not tax-free without realizing gains before death.
No, building a custom home is usually more expensive than buying new from a builder and much more than buying an existing home.
This is 1000% true; big companies get bulk pricing. You’d probably pay double for materials because you’re buying retail.
Well, ask your friend. I’m sure he never actually did it himself.