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I built my first spec house more than a decade ago. Although I’d been building houses for 10 years before that, when I discovered that banks would give contractors construction loans at 70% to 80% of the appraisal value of a finished house, it was great news to me. By rough calculation, if my desired profit was 20%, the construction cost could be covered by the bank loan. However, one thing was immediately apparent: I wouldn’t be paying myself until the house sold. (Of course, if I worked on the house, I’d pay myself an hourly wage.) To build on spec, you have to have some savings or other work to pay the household bills. You can’t