Tract builders are basically building kit homes. They build the same 8 to 10 plans over and over. After the first few they know the exact cost and there is little waste. And they typically have around a 30% mark up. Bear in mind their overhead is probably 15%.
By this time next year I hope to have a 1,300 s.f. home built for around $50 a s.f. Add $15,000 for a city lot (in a small Texas town) and my payments will be around $450 a month plus property taxes and insurance.
I used to figure $70 a square foot for a nice finish out on a used home on a good lot; anything more was for location.
As I understand it—and I hope you will correct me if I’m wrong—the real problems with building something like this are first, that it’s very hard to get a construction loan, so you have to pay cash up front for everything, and second, that you have a prolonged construction process because you have to buy the land, contract to put in the utilities, well, septic, foundation, driveway, outbuildings, etc., and supervise the trades as your own general contractor. The regular tract-house builder can turn these houses out on an assembly-line basis but it is a little more exasperating and time-consuming for one or two guys. Still, it’s a good idea and very much worth considering.