I am in the first stages of home repair when I discover that my exterior walls are not studs but are real 1x12's standing on end and side by side with tongue and groove 6" wood siding on the outside and 4" t&g on the inside. This was all coverd inside with some 1/4 " thick fiber board paneling and asbestos shingles on the outside.
can anyone please help me with some advise on how to change this mess into a studed wall. I have some knowledge of construction so I want to do this myself. Any help will be appreciated.

If this is a supporting wall you will have to support the rafters and joist before you start anything.

Lay a 2x4 on the floor along a line where you want the wall to be, no mark this "Bottom Plate" every 16 inches on the center and do the same to corrospond at the top. Now cut studs that will fit between the top and bottom plates, make sure that the studs are snug against the top plate. Remove your supports as you go.
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Now you can cover them with what ever you want.

You have asbestos to remove? There is a very special, restricted, process to follow, by law. It could eventually kill you if you get it in your lungs.

Get someone to come out and make sure that it is in fact asbestos. Don't break it up into pieces. The airborne fibers are what's the problem.

If this is a supporting wall you will have to support the rafters and joist before you start anything.

Lay a 2x4 on the floor along a line where you want the wall to be, no mark this "Bottom Plate" every 16 inches on the center and do the same to corrospond at the top. Now cut studs that will fit between the top and bottom plates, make sure tht the studs are snug against the top plate. Remove your supports as you go.
'
Now you can cover them with what ever you want.

Yes ,it is a load bering wall... the exterior wall of the house. How close to the outside edge of the joist do I have to put my support? Will I have to "stick frame" the replacment wall?

You have asbestos to remove? There is a very special, restricted, process to follow, by law. It could eventually kill you if you get it in your lungs.

Get someone to come out and make sure that it is in fact asbestos. Don't break it up into pieces. The airborne fibers are what's the problem.

I understand about the removal process... very expensive! That part is being taking care of at the moment. Don't want to be a part of that mess.

yes ,it is a load bering wall......the exterior wall of the house. how close to the outside edge of the joist do i have to put my support? will i have to "stick frame" the replacment wall?

You need to put your supporting wall as close to the old wall as possible and still be able to get your new wall into place.

And yes you will then have a stick wall.

If you have any doors or windows along that wall you will have to putt headers over them. You do this by cutting 2/6's or bigger depending on what width the window or door is and them you put a shorter stud under the 2 x 6. Then leave anopening big enough for the window and put another shorter stud and then a 2 x 4 across the two short studs, this will support the bottom of the window. So you will wind up with actually with three studs of differend sizes at each window and two at each door.