Diary of a New Construction Project

525 Replies

Originally posted by Minh L.:

I love it. What a timely thread as some people are starting to get into new construction. J, did you use an existing design to save some cost, or is it a custom designed house?

Hey Minh,

See my post above from earlier this morning with our preliminary sketches. As I mentioned, we decided to go custom, both because we're picky and because the dimensions of the house are a bit non-standard (narrow and long).

Sorry J. After I have posted it and kept on reading the thread, I found it. Talking about taking an adventure. :)

I have been thinking about your drawing , instead of having the driveway extend all the way to the back of the property why not build an ell at the master bedroom, make port couchette and have a mid house entrance, move the laundry to the basement and the master bath where the laundry is. Then have a hallway that extends from the midpoint of the kitchen are to the back deck.

Probably have to move something's around, and incur some more costs but you will gain 8 feet of width and add an egress to the back.

Just a thought.
Rick

iPad auto correct, that's supposed to say Porte cochere, or carport I guess I should have said.

Rick,

First, thank you for the thoughts!

Not sure I completely understand your idea, but does lack of basement mean it won't work? :-)

Opps, lol, I could have sworn I saw a picture of a basement, scratch that post.

DAY 10: FINDING AN ARCHITECT

We've spent the past week or so finding and interviewing a few potential architects to help us with our design and to create plans. We got bids from $2500-10,000. We finally settled on a guy who used to design for one of the biggest and most well known builders in Atlanta (and coincidentally, it very possible he may have designed the house that is my primary residence).

He agreed to do all drawings and submit the plans for us for $2500 (I guess that puts us $1500 under budget so far :). The architect said that we’ll need to complete demo before he can get final measurements of the existing foundation and complete the drawings. Once the drawings are done, he said permits should take between 2-6 weeks, depending on how finicky the particular building inspector was that we end up with.

So, we need to finish demo prior to getting final drawings and then it will still be up to two months to get permits. And since we need a demo permit before we can begin demo, that puts us at least three months out for starting construction. I guess we can use that time to get our bids and nail down our sub-contractor list.

DAY 12: MEETING WITH THE ARCHITECT

We spent about an hour at the property today with the architect, reviewing our proposed drawings, discussing what we wanted to build and getting his feedback. We talked a bit about the framing design and how we can build most cost efficiently.

Ultimately, while he can lay out the design for the structure, it will be an engineer and the lumber company who can best tell us the most cost efficient method for framing, floor design and roof construction. So, we'll have to give the first draft of the plans to the lumber company, let them do "take offs" (figure out exactly how much we need of every piece of lumber and material), and ultimately let them recommend the most cost-efficient method to design and build the structure.

Supposedly, the big lumber companies all have in-house engineering, so I guess the architect and the engineer will iterate on the drawings until we have the layout we want with the most cost-efficient design.

We expect to have our first draft of the drawings in the next 10 days.

That architectural number is a lot more reasonable.

What's the huge delay with demo / permits? Sounds like a 1-2 day demo job. Are demo permits a lengthy process in Atlanta?

All of the big lumber companies will provide engineering for trusses since they're custom made. Truss design is a great place to find some cost savings as well as add in some cheap architectural options.

I have the same question as Steve on demo. Why wait? Have you applied for demo permit? Even in Austin, when building permits we're taking 4 months to come back, demo permits were being issued in a week.

One thing I underestimated on demo was how many dumpsters I'd need.

I'm curious on the demo if you have any asbestos or lead paint issues? When was this house built?

One of my friends built two houses a couple years ago. He used a guy for lumber who was basically a broker. He took the order and shopped it for the best deal from all the local lumber companies and made some sort of commission on the deal. My friend was very happy with the price and quality and used the same guy for another project after. Not sure if there's guys like that in Atlanta, but might be worth looking into.

Hey Steve, Jon,

A little bit of foreshadowing here (I didn't know this at the time), but the permitting process here in Atlanta is ridiculous, even for demo. To knock down a house, you need a boundary/site survey, a survey that indicates the proposed new structure, a tree survey, an asbestos survey, a pest letter, etc. And then you need the permits. The surveys take several days (and the "proposed structure" survey can't be done until you have a preliminary drawings of the new house, the permit can take a week or two, then any asbestos remediation, and then finally you can knock the house down. The whole process -- if there is asbestos -- can take two to four weeks.

It's not an overly complicated process, but it's time consuming...

My next post will discuss our demo bid and will go into this a bit more...

Originally posted by Rob K:
I'm curious on the demo if you have any asbestos or lead paint issues? When was this house built?

The house was built in the 1930s, so that's definitely a concern (from an extra cost standpoint)...


One of my friends built two houses a couple years ago. He used a guy for lumber who was basically a broker. He took the order and shopped it for the best deal from all the local lumber companies and made some sort of commission on the deal. My friend was very happy with the price and quality and used the same guy for another project after. Not sure if there's guys like that in Atlanta, but might be worth looking into.

We're going that same route, but are planning to play the broker role ourselves. There are three big lumber companies in the area, and we plan to work directly with all three of them. In the future, you're right that working through a broker may be worth the extra cost, but on the first one, we want to understand each part of the process as much as possible...so, we'll be doing this ourselves.

In our current project, which is a house we demoed down to the block the biggest underestimated expense was demo/disposal. By far.

Also, try Google SketchUp for drawings. Its free and awesome!

J Scott Sounds like you found the right guy to do the design for you. He will have the experience to do the layout so that it not only fits the check list of features, but that they work for everyday living. I'd strongly suggest that once you have the layout done you show them to your wife and let her look at them. Often men design homes and don't think about where things like the laundry is in relation to bedrooms, what side a dishwasher should be in, placement of furniture, etc.

In one of the earlier posts from Denver regarding costs, I think a major thing that drives up costs in areas such as Denver, California, New York, etc., is that we have much higher permit fees, and additional fees others don't have.

As far as so many of you buying in the same neighborhood, was that by design or coincidence? It's unbelievable that you can buy that cheap and sell for such a high amount. WOW.. we'd better come to your neck of the woods and get out of California!

Originally posted by Karen Margrave:
I'd strongly suggest that once you have the layout done you show them to your wife and let her look at them. Often men design homes and don't think about where things like the laundry is in relation to bedrooms, what side a dishwasher should be in, placement of furniture, etc.

My wife does most of the design, and at very least, approves everything. I learned that lesson long, long ago... :)


As far as so many of you buying in the same neighborhood, was that by design or coincidence?

Pure coincidence!

This is a really cool thread. Thanks for doing this. Can you talk about some of the market forces that are going on in the area that are making new builds profitable? From the pics, it looks like a very run down area and possibly former warzone. What is causing the gentrification? Why are people willing to buy new and pay a premium as opposed to getting something that fits their needs farther away (presumably for cheaper)?

Thanks!

Originally posted by Bryce Y.:
Can you talk about some of the market forces that are going on in the area that are making new builds profitable? From the pics, it looks like a very run down area and possibly former warzone.

The area is not a bad area at all -- the homes are certainly older and many of them are in disrepair, but crime is low and the neighborhoods are well established and nice enough. The condition of the houses isn't so much a factor of how it's treated (what I would expect in a "warzone"), it's more a factor of age and lack of upkeep.

Many of the homes on this street are in better condition, though they are all 80+ years old and many of them it just makes more sense to knock down than to renovate.

Re: Market forces: Yes, this was definitely former war zone. If you want some interesting reading on the area you can look into efforts, spearheaded by local developer Tom Cousins, focused on the revitalization of East Lake Golf Course and the surrounding community. Oddly enough the Wikipedia on East Lake does not mention a word of any of this, so here is a link to some statistics that will give you an idea of what the area was like in the mid nineties: http://www.eastlakefoundation.org/sites/courses/view.asp?id=346&page=8936

East Lake is now the site of the PGA Tour Championship and proceeds from the event go to the Foundation which continues to support parts of the community to this day.

To be clear, this is not the only force at play, there are several others, but I can say without reservation the area would not be where it is today without the efforts of Mr. Cousins and the community to turn things around at East Lake Gardens.

J Scott My vote button doesn't work, and I just wanted you to know how much I'm enjoying your journey. Thanks @Gabe Larkin for the additional info. I love seeing what's happening in other areas of the country, and what types of projects people are working on.

I'm hoping that the asbestos and lead paint issues don't cause you additional costs to tent the house, etc.

That's so crazy that there's so many of you BPers together like that, how fun!

DAY 14: DEMO BIDS

While we’re waiting for initial drawings from the architect, we’re interviewing a bunch of potential demo companies who can take down the old house. Bids are coming in between $5000-10,000.

We’ve started to realize that the experienced companies are the ones that discuss getting an asbestos survey prior to knock-down (the house was built in the 1930s), disconnecting utilities, getting surveys, etc. This is stuff that’s pretty obvious, but I just haven’t ever thought about it before.

DAY 16: OUR DEMO BID

Looks like we’ve settled on a demo company for this job. Here is a link to their proposal (for security reasons, I've redacted any information that might identify the actual property address for now):

http://www.123flip.com/wp-content/uploads/Case_Study/BP/2.pdf

Their proposal includes $450 for the asbestos survey, $6500 for the actual demo, $1280 for the demo permits, $1100 for the surveys and $75 for the rodent letter. They’d be outsourcing everything but the demo. They say the work would be done in 1-2 days and it sounds like they can fit the entire house in about five 30-yard dumpsters.

DAY 17: SURVEY BID

Because the demo company is outsourcing all the non-demo work, they are fine if we use our own contractors for that stuff. The one item that stuck out on the Demo Bid that I we thought we could get cheaper was the site survey (demo company wants $1100).

I called the Surveyor I've used in the past and asked if he could give me a better price on the survey. He says he can do it for $650 and he’ll have the job done in less than a week.

Here is a link to his bid:

http://www.123flip.com/wp-content/uploads/Case_Study/BP/3.pdf

I'm sure it's some goofy city requirement, but what exactly does a rodent letter certify?

Why is a demo permit $1,280? That just seems crazy. I tore down a large two car garage once and the permit was $65 and took about eight minutes to get. The garage came down the next day. Are fees in Atlanta out of control? How much money will the city make off of YOUR hard work when this project is all said and done?

Originally posted by Steve K:
I'm sure it's some goofy city requirement, but what exactly does a rodent letter certify?

The city basically wants to be sure there's not 1000 rats or 100,000 roaches tucked away in the house and when the demo happens, they don't all go running into the streets and into the neighbor's houses... :)

I called the Surveyor I've used in the past and asked if he could give me a better price on the survey. He says he can do it for $650 and he'll have the job done in less than a week.

Good price for a full topo survey. Will you need another as built survey at completion? You might negotiate that now with this company.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here