Spec House: Ballpark, What’s it cost to build a 2000 SF house?

Question

Hi guys.

So I’m about to become a general contractor and I have found a real estate development where I can get a 7,000 SF lot for $25,000. There are comps in the same development of homes selling for $250,000 to $350,000. It looks like a decent opportunity to build a spec house. Just a simple but nice 4 bed 2.5 bath home about 2,000 SF. Based on comps should also sell around $300,000. My question is:  Does anyone have a rule of thumb on about how much it costs to build a house like this. I’m aware there are many factors that will cause it to vary but I’m curious to hear of any insights from any contractors who have experience (good or bad) building spec houses.

Thanks guys. Appreciate all your insights!!

Jay Hinrichs · Answer

it always blows me away that you can build for 40 bucks a foot in texas or 50..  simply don't know how you do that.

lumber Is lumber  concrete is concrete  electrical and plumbing.. permits.. I know permits vary wildly.. we pay 10 to 15 a foot just for permits.  and a lumber pack on a 2000 sq foot home would be 25k or there abouts not including framing it  LOL

our markets are low of 100 and high of 350 a foot.

Seth Teel · Answer

We're building a new spec home right now:  3 bedrooms, 2.5 baths, detached 2-car garage, approximately 2,500sf, located in the Alamo Heights ISD.  Projected sales price is $400 - $440K (we ran our numbers at $400K, but comps are showing up to $500K right now.)

Our construction costs come in at $101/sf.  (I believe this PPSF to be a little high)

Our total soft cost, including architecture, engineering, and site prep, was an additional $30K. (This two was a little high)

Both are construction and soft costs came in a little high.  We know we can get them lower now.  Fortunately we acquired the lot and a very reasonable price to offset this.

Don't forget to factor in holding costs, insurance, sales commissions, and closing costs.

Above are real numbers on my real project that is almost complete.

When I build another one, I will use $100/sf as my rule of thumb for construction costs.  And will add or subtract based on the level of finish.

Hope this helps and good luck!

Kenneth Garrett · Answer

@Elliot Janes

Elliot, I just priced a new construction home for one of my vacant lots.  It came out approximately to about $100/sq ft.  That’s with calling in favors.  Your probably looking at $100-$115/square foot at a minimum.  There are many variables.  Material is so expensive these days.  Not sure when your done it’s worth the time time and effort.   I actually thought of just selling the lot.  Probably could make 30K without any of the headaches.  This is why developers buy subdivisions when your building.  In bulk you can get the labor and sometimes material discounts.

Good Luck.

Michael Lewis Lee · Answer

Hello Elliot!  I was in construction for about 30 years as a construction manager around Dallas Texas.  You can spend $40 to $100 per square foot depending on your finish quality.  You did not mention what area your in but I would concentrate what is in demand in that area.  A general contractor in that area should know because pricing can be different in different parts of the country and the finish quality you want and depending if your goal is to rent or sell.  Just do what is average in that area and in demand and not what you think.  Use a G.C. or subs that are close and familiar with that area and the Building Inspector (how strict they are).  Good luck to you!

Jay Hinrichs · Answer

coming out of the deep recession of 08 when I started spec building in 2012 2013 in Oregon we got framing for 3 to 4 bucks a foot  we now pay 7 ish.. in Charleston when I first got there we got quotes of 15 to 20  and settled with a licensed Hispanic crew at 8 to 10..

But as stated we pay 25 to 30k for a lumber pac and trusses for a 2k sq ft home add in another 15k for framing.. we are at 35k right there before grading utsl concrete mechanicals windows roofs cabinets flooring etc etc.. so I know its all regional.

in Charleston we built in the Historic district and that 2600 sq foot house cost us 750k to build.. using the materials that were dictated by the city.. it sold though for 2.2 mil.. so its all relative.. right ?

Jay Hinrichs · Answer

I was in San Antonio a few years back looking to fund some new builds and the promoter presented me with budgets that to me I just could not see how that worked.. IE framing for 2 bucks a foot  .. all in at 50 to 60 bucks.. I passed I just could not fathom how that could happen.. the guy who dragged me down there went ahead with it and of course was not a enjoyable experience for him.

one the competition for new is intense and a lot of these sub 150 to sub 200k builders work on razor thin margins and make It up in volume  from what I saw.

Mike Reynolds · Answer

Yeah, doesnt happen anymore. Back in 2011 I have a friend that was building HUD rent houses for himself at 60 a foot. He was a contractor and used his own crew and built them barely at that. That doesnt count land or extras though. He didnt factor his own OH/profit either so it was in reality more per foot.

Now maybe you can build apts closer to that figure.

Elliot Janes · Answer

Thanks for all of your insights on my post. I actually live in near you in SE Portland. Was looking at building a spec house in Madras Oregon. I think more than $100 / sq ft makes it too risky for me though. Hopefully we’ll meet again sometime. On bigger pockets or in person. @Jay Hinrichs

Elliot Janes · Answer

Thank You. @Seth Teel

Elliot Janes · Answer

@Elliot Janes

Thank you Michael!! That helps a lot!!!

Spec House: Ballpark, What’s it cost to build a 2000 SF house?

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