Full Gut job vs New Construction, Philadelphia Pa
Flipper/Rehabber · Phila, PA · Member since 2018 · 5 posts · 1 vote
@Dae Sandridge New Construction is the way to go. It is more intimidating but actually easier then a full gut especially if the subject property is older then 50yrs.
As a bit of background I am a developer AND a builder specializing in historic restoration and new construction urban infill. My new construction stuff is always much less of a headache.
I could go over the specific reasons why this is true and I have in multiple posts elsewhere in the forums. If you'd like to read those feel free, or you can DM me and we can get on the phone if you're super interested/nervous.
To keep the forums fresh let me offer you a few rules of thumb to help your new build go right:
1. Be honest about your experience level with the core members of your team. Just tell your architect and your GC that this is your first rodeo and you will need some hand holding. You'll know you have the right team when they are excited to work with you and help you learn the business.
2. Related to number 1: When bidding out the job you'll want to start with the architect and then interview the builders they recommend. New construction is a team sport and the folks who play in the space have squads they consistently work with. The architect/builder relationship is important and can take a long time to cultivate. It will be tempting to mix and match. Don't. While it is possible that Tom Brady and Bill Belichick would have be equally successful apart as they have been together I'm not sure I'd want to bet 500K to find out.
3. Find a builder you can fight with. You will be married to this person for 6-18 months and it is going to be overwhelming, expensive and stressful. At some point, you'll have an argument. It's important to be able to fight with this person without doing permanent damage to the relationship.
4. Sweat every detail and enjoy the ride. The first new build is really really special, you will quickly learn how little you actually know but you will also learn more then you can imagine.
Good luck.
Hey, seem like most of us newbies have some challenges. My situation similar, I bought a fixer upper last June and been living in it but the property is on 1 ace and perfect set up to build 12 townhomes. It’s 210x210 square and the 1960 brick ranch sits in the middle of the lot, I was thinking of doing the quick flip and make $40-50k or just go for building new Constuction town homes and tear the house down. Yesterday I got a quota from a builder who want to build the 12 townhomes for $90-110 a square foot pushing the final coat for each at $160k comps are selling for $179k. I feel stuck. All I wanted was 3 rows of 4 townhomes 80wX40d for about $60@ square feet, so I can make a decent profit.. any one have any idea what a project like this can cost on the low and high side? I am real estate Broker trying get this Real estate investor mind set..
Hi @Dae Sandridge,
Welcome to BP!
Good Question and the true answer it depends. I am currently transactional on rehabs and new construction and there are so many moving parts. The concern is not just to work with a real estate professional with a license but someone that is elbow deep like yourself with there own transactions.
What Neighborhood Designation is the property?
What is your level of experience and reserves?
Did you buy right for now renovation or better to pioneer and hold for a new build knock down?
Estimated Per Square to rehab to the studs from $85-90 per square on livable square footage with out add-ons (Finishing Basements, Bump Outs, Bathrooms & etc.)
A lot to think about what would be the best cost benefit going into a fall market with wood and steel costs up 35% in past year and rates to purchase finished properties in the high 4's
Let me know if you have any questions.
Regards
Joe Scorese
@Dae Sandridge New Construction is the way to go. It is more intimidating but actually easier then a full gut especially if the subject property is older then 50yrs.
As a bit of background I am a developer AND a builder specializing in historic restoration and new construction urban infill. My new construction stuff is always much less of a headache.
I could go over the specific reasons why this is true and I have in multiple posts elsewhere in the forums. If you'd like to read those feel free, or you can DM me and we can get on the phone if you're super interested/nervous.
To keep the forums fresh let me offer you a few rules of thumb to help your new build go right:
1. Be honest about your experience level with the core members of your team. Just tell your architect and your GC that this is your first rodeo and you will need some hand holding. You'll know you have the right team when they are excited to work with you and help you learn the business.
2. Related to number 1: When bidding out the job you'll want to start with the architect and then interview the builders they recommend. New construction is a team sport and the folks who play in the space have squads they consistently work with. The architect/builder relationship is important and can take a long time to cultivate. It will be tempting to mix and match. Don't. While it is possible that Tom Brady and Bill Belichick would have be equally successful apart as they have been together I'm not sure I'd want to bet 500K to find out.
3. Find a builder you can fight with. You will be married to this person for 6-18 months and it is going to be overwhelming, expensive and stressful. At some point, you'll have an argument. It's important to be able to fight with this person without doing permanent damage to the relationship.
4. Sweat every detail and enjoy the ride. The first new build is really really special, you will quickly learn how little you actually know but you will also learn more then you can imagine.
Good luck.
I’ve read this like 10x times! This is good stuff thank you soooo much for the input