-On Story Mode: You must progress through the plot until the Builder (a yellow guy) gives you the option. This will appear as a mission after you get outside "Black's Barn". You must interact with the Builder, and select the Nest in order to build it.
-On Free Mode: You can build the nest from the beginning. Just interact with the Builder.
So I'm currently playing on free mode, And I've upgraded my house all the way. However, when I talk to the builder, my only two dialog options are "The house cannot be upgraded any further" and something along the lines of "You're not much of a talker are you? nevermind". Do I have to complete a certain mission for him to receive that dialog option?
Yes. Whenever you are in a Menu like that, in the lower side of the screen you can see a guide about how to travel between options.
The slavebar can be build in the same way you did with the Nest. It's the third option, next to the Nest. You must build a "Milking Station" and a "Milk Collector" inside your nest before building the Slavebar.
Extra: In order to be able to upgrade your Slavebar to higher levels, you need to increase your "Business Reputation" in the town by selling milk.
