Quote from @Douglas Gratz:
@Bruce Woodruff and yes its going to cost $180 per sqft not $300. I do not know where you got your numbers from. This 1.7millino home I am buying will need top of the line finishes yes, but its the location that makes the price so high , not the house here. (the house obviously will need high end finishes, but you catch my meaning) Where do you get $300 from?
The lots is 40x60 of which 31x51 will be built on. I have to lots back to back . And I am simply asking the above (not being defensive) all opinions welcome here. I like the truth
I agree with most of what you had to said and gas prices will effect my budget. I have a 15% contingency on a 1,140,000 budget we are actually at 196/sqft. And although I agree with how gas prices will effect me,
I am new to the investing side of things, but I have been swinging a hammer, pouring concrete and pulling wire since I was 5 years old, I am now 40.
To think that you are going to build a high end large home 4 stories for $180 a square foot is dreaming, especially with costs as they are right now. The guys driving to your site are paying $5.00+ per gallon gasoline, same for the Diesel in the trucks delivering the materials, which means prices of lumber and steel are not coming down as much as they could from the insane levels they peaked to mid pandemic.
The other issue you have here, is you are trying to build tall, which means that there is a natural increase in cost simply for getting everything up to the upper floors because it is going to have to be hoisted up there with a telehandler or a crane.
Because of this you are going to be throwing a substantial amount of equipment rental costs on top of your build, and that equipment runs on $5.00+ a gallon diesel fuel.
Then you have to consider that labor costs are also going up because of inflation, When McDonalds is paying 13-15 an hour, skilled labor is starting to demand 25-50 an hour depending on the trade, and then the contractor is putting a markup on that before you are being billed for it.
Additionally with the structure being as tall as what you are constructing, the walls have to be built stronger than a standard two story construction would be, and that weight has to be transferred to a very solid foundation that costs more money to build.
The price of concrete is going up because it has to be trucked several times, and again, Diesel fuel is so expensive right now, and the same for the steel that has to be used to reinforce that concrete.
There is another issue with building tall as well, is that your guys are going to need to have scaffolding and man lifts to get to the exterior of the house to work on it, and going 4 stories up, that is a lot of scaffold to build, not to mention that the employees working up there have to have fall protection training and so on.
This is further compounded by the fact that working up high, it just takes longer so you are going to have way more hours involved because for anything they do, they are either having to perch themselves in the man basket of the lift, or working around the support structure of the scaffolding.
And before you even start building in the site prep there again, you are going to have to pay for big earth moving machines, that run on that $5+ a gallon diesel, and pay for a truck to move those machines to and from your job site, and if those machines are big enough you have to pay for the permits for them to go down the road.
When this kind of construction could be done for $180 a square foot, Bill Clinton was president.
In 2000 looking at building single or two story dwellings if you could get by for $100 a square foot you were doing well. The currency has almost halved in value since then.
I don't see any way you get that done at 180, 300-400 is far more likely.
To give you a good example, look at this listing:
https://www.zillow.com/homes/f...They got the structure of this house up, then got destroyed on the costs trying to finish it out, and it has sat like this since 2001. it is only 2 stories with a daylight basement. Just finishing this place out with the structure there (assuming it was all good) I would estimate at 150-200 a square foot. (And mind you if this property was in the lower 48 not Alaska)
I would suggest if you want to learn the construction side of things, start with a much much smaller project, a 2br 2bath where you are putting less than 2-300k on the line.
Building bigger projects like you are wanting to tackle takes knowing the right people and having the right connections to get it done, and the only way to get those is to start with smaller projects to weed out the non hackers.
Construction is one of the most difficult endeavors there is to do efficiently because there are so many moving parts, which is why so many shy away from it, and why the people who are good at it can make the big money.