You can build something nice for 125K; just contract the project yourself. Contractors generally charge $90-$120 per square foot for basic buildouts. You can save yourself up to 40% by contracting the job yourself.
If you can keep it simple, you can build the place for around $60/sqft. That will give you over 2000 sqft of home. If you don't need a garage, leave it out. That gives you more room for the studio on the first floor.
Definitely go for a wood-framed home. The supplies are cheaper, and contractors generally have more experience in this area. This means that the work will be cheaper. Rules of thumb:
- Get at least 3 bids from sub-contractors on all phases of the project (Foundations, framers, plumbers, electrical, roofers, drywall, & HVAC).
- Buy the materials for building yourself.
- Never pay anyone until they finish the job
- Make sure that no trash gets buried on your property
- Make the contractor gives you good compaction on your subgrade
- Schedule a meeting between all of sub-contractors pre-construction. This will help them schedule around eachother.
If you do these things and stick to a simple plan, the house can be done in a few months. Get a couple of friends together and set up your own gear. Treat them to some cokes and a bucket of chicken afterwards
It's definitley possible. JUST DO IT.