Real Estate Investor · Denver, CO · Member since 2011 · 74 posts · 24 votes
All- I am a experienced rehabber...I have renovated 50+ homes over the years. I now looking to get into new builds as our market in Denver is becoming really strong. Inventory is extremely low right now.
Curious what others are seeing for general price per sq foot cost? I understand each market is different; however I want to get a general idea.
My belief is that I can do it for around $125-140 per foot.
Jacksonville, FL · Member since 2013 · 226 posts · 115 votes
12y
Jon,
We get our land from investors who have accumulated vacant lots from tax deeds over the years. This keeps our land costs very low. Once our due diligence (quiet title, title check, field explorations) is complete on the land we start the design and construction process. We do mostly everything in-house. I do all the engineering and plans, my dad builds it, installs solar, and lists it on the market. This is what keeps all our costs down. We have all the licenses to do it mostly in-house (P.E., G.C., Roofing Contractor, Solar Contractor, Real-estate broker.)
Obviously when you say "net zero" this is highly dependent on individual usage and other factors. We will educate all our future buyers on how to consume less which will help their home become "net zero". You give them the amount of energy that the solar is expected to produce over the year (pvwatts) and you compare it to an estimated usage. This is very approximate but you can get ballpark numbers.
We just started but our first house is about 90% complete and we have 2 more houses in the beginning of the construction phase with 18 more in the pre-design phase and on the drawing board.
This first house we haven't listed on MLS yet, but I put it on zillow a few weeks ago and we have received a swarm of attention. Depending on the area the house is built, we are shooting for around $80 to $90/sqft for sale. I understand this is a big range but we are just starting and should be able to narrow it down soon. Also, the $55/sqft cost to build is a little conservative based on the numbers so far for the first house. We are expecting to come in around $52 or $53/sqft including the solar and all the added energy efficient appliances, HVAC, and building materials.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
14y
Craig, we can build for a lot less in Texas. Of course there are all the usual variables. I built 2 homes last year. One in the city for about $65 a foot and one in the countr for a little more, but with nicer finishes. Land costs not included.
What size homes are you going to build? Land cost? How much will they sell for?
Real Estate Investor · Denver, CO · Member since 2011 · 74 posts · 24 votes
14y
Thanks Jon.
Land cost is about $185-200k. I can build 2 units at about 2000 sq feet each. They will retail for around $400k ea side. Average DOM is about 30-60 days. Great neighborhood.
Finishes need to be higher end: semi custom cabinets, granite, etc, etc.
Real Estate Investor · Denver, CO · Member since 2011 · 74 posts · 24 votes
14y
I was giving general info above...here is more specifics on what i am potentially thinking/researching.
1700 sq foot units retail for $385k.
Construction costs = $125 per foot = $212k per side ($414k total)
Land: $185k
Total: $599k
Value: $770k
GP: $170k
NP: $125k ($62.5 per side)
Timeline: 120-150 days
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
We're building for between $61psf and $72psf in Austin. A lot really depends on the finishes an other items like the topography of where you are building.
How are you financing the project above? That seems like a run-of-the-mill margin project to me.
Have you looked into construction financing? That may help some fi the margins above are the best you can find with product that is moving in your area.
Real Estate Investor · Denver, CO · Member since 2011 · 74 posts · 24 votes
14y
thanks Bryan. To sell at full value we need to use higher end finishes. IE Custom cabinets, granite, etc.
Good news on financing is I have arrangements with a private lender who has very deep pockets. No capital costs. Just have to give him 25% of the profit.
Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
14y
It's been a little while since we've built anything new given the state of the local market, but semi custom can be done here at about $90 per foot under air.
That number included block construction, custom cabinets, tile and wood flooring, granite in kitchens and baths, nice appliances, paver patio / driveways, double crown molding, etc etc.
At your $125-140 numbers you could really add some high end features.
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
Originally posted by Craig Patterson:
Good news on financing is I have arrangements with a private lender who has very deep pockets. No capital costs. Just have to give him 25% of the profit.
Do you have to contribute capital in this scenario or does he put up all of the money?
Commercial Real Estate Broker · Biloxi, MS · Member since 2011 · 50 posts · 4 votes
14y
hey Craig,
Does it really cost 125 p sq ft to build new? Sounds like you may be viewed by your contractor as a repeat luxury-home-end-user compared to the build-out prices I'm used too. I can build a beachfront home for that including lot here on a brand new coast line! A duplex!!!!!! I'm amazed.
I must be missing something but I'm kind-of laughing at those costs. Must be the whole area that has deep pockets in Denver!
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
14y
Hi Craig,
I have two different comparisons for you although really only one is worth your time. I have a subdivision in South Texas where I'm building for slightly over $50 per square foot. This is not a very good comparison nor is much of Texas or Florida.
I have finished two homes in Utah within the last 90 days and have started a third home. My price per square foot for construction only is less than $100 per square foot. I would not have thought that your costs would be 20 to 40% more. Have you done extensive research on comparison-shopping with other contractors?
One of these homes was actually constructed for the St. George Utah Parade of homes which just finished. It was very nice with granite, fully landscaped, three car garages etc. I really have to wonder about your price per foot charges. That is my input. Rich
Rehabber · Denver, CO · Member since 2010 · 79 posts · 20 votes
14y
Craig,
You really should do some more shopping around as you really should be in the ballpark of $100 per square foot. What area is the lot located? Maybe your contractor is thinking that you may be willing to pay more because of the area? Either way I'd say get some more quotes in because $125-$140 per square foot is WAY too high, as I was just quoted $100 per square foot no more than 3-4 weeks ago.
Real Estate Investor · Denver, CO · Member since 2011 · 74 posts · 24 votes
14y
Thanks everyone for the candid feedback. Based upon everyone's comments I think $100 is more in line and what I will target.
Keep in mind everyone's market is different and what you can buy and build for in MS, TX & FL is not the same here. This is an in-fill development as such there are other costs you may not be factoring such as the cost to scrape the existing home, etc.
If I can achieve $100 per foot, my investment will work and will generate a nice return. I'll let you all know how it pans out.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
14y
Just to reiterate Craig's point, building costs can vary widely in different cities and even neighborhoods. Any San Francisco contractors care to share their costs? Or how many permits, inspections and their costs?
Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
14y
100-110 per sq/ft is the going market rate for new construction in my area..
That of course is for a finished home including the lot cost..
Paying over 20-30 K for a middle class lot seems kinda scary to me.
For flipping it would be okay, but crazy lot prices are a good sign of a over inflated real estate market that can come crumbling down in todays shaky world...
If you look at areas that have lost 50% in home values it was usually a result of tumbling land values... Housing materials and labor haven't changed that much...
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
Everyone needs to make it clear whether or not they are including soft costs and the cost of the dirt in the numbers they are throwing around. That makes quite a bit of difference! My ppsf is around $114 if you include dirt and soft costs.