Diary of a New Construction Project

525 Replies

Hey J Scott, I'm a new member at BP and wannabe investor. Thanks for putting this all up, its a really cool thread. I hope to get into development myself, once I get my feet wet on some renovation projects.
Can't wait to see where this all goes.

J, what's the 10 day public notice for? Can someone who has no ownership interest in the property prevent you from demoing the house?

Originally posted by Bryan A.:
J, what's the 10 day public notice for? Can someone who has no ownership interest in the property prevent you from demoing the house?

Don't know for certain, but I'm guessing this is the period during which a neighbor could say -- for example -- that the property is historic and shouldn't be knocked down. That's my best guess...

In Atlanta, a posting is required for virtually everything. A neighbor can object to a house being torn down, a tree being removed... and in some historic districts, they can object to the color you're going to paint the house, the front facade, and virtually anything else they want to bicker over.

It's odious, to say the least.

DAY 64: BAD ASBESTOS NEWS

Two days from starting demo and we got some bad news today — apparently, the asbestos survey required for demolition indicated that we had a good bit more asbestos in the house than we had figured (mostly in the flooring/drywall). We need to rip it all out before the house is demo’ed, and the total cost is going to be $1800 (that includes the survey/testing).

Another good lesson for us: we should have gotten the asbestos survey BEFORE picking a demo company, so that we could get the asbestos removal work bid by multiple companies…now we’re pretty much locked into our demo company for this one and have to hope $1800 isn't ripping us off.

Just to be sure we're not getting ripped off, we’re going to get a few more bids on this work (even if we don't use the new companies on this job). In the meantime, we’re expecting the asbestos removal to complete in the next day or two by our demo company, and the house will be knocked down in the next few days.

Here is a link to Asbestos Survey Report:

http://www.123flip.com/wp-content/uploads/Case_Study/8.pdf

Here is a link to Asbestos Lab Results:

http://www.123flip.com/wp-content/uploads/Case_Study/9.pdf

Here is a link to the Asbestos Abatement Proposal:

http://www.123flip.com/wp-content/uploads/Case_Study/10.pdf

I can understand the historic district. That's the price you pay for doing one there. I'm assuming this wasn't the historic district? If you're not in a historic district, and people can intervene, that is ridiculous to me.

Originally posted by Bryan A.:
I can understand the historic district. That's the price you pay for doing one there. I'm assuming this wasn't the historic district? If you're not in a historic district, and people can intervene, that is ridiculous to me.

This is certainly not the historic district, though as Aaron pointed out, this is common throughout the process. We've run into a couple times already and we don't even have permits yet.

In one case, an arborist is making us mark a tree and wait 10 days for comments/complaints -- we're not even removing the tree though...the root system will be impacted by 30% during construction, which *could* eventually lead to the tree dying.

Originally posted by Bryan A.:
I can understand the historic district. That's the price you pay for doing one there. I'm assuming this wasn't the historic district? If you're not in a historic district, and people can intervene, that is ridiculous to me.

Welcome to Atlanta. I've often wondered why they don't just hang a sign out front of the building dept. that says, "Developers go home - your dollars are not wanted here and we will do everything in our power to hinder you"

But.......

The flip side to these policies is that Atlanta has actually shown some incredible forward movement towards becoming a decent place to live. The stringent requirements for development, and the judicious enforcement, has done a lot to kick out ne'er-do-well developers and hack and slash contractors. A lot of the neighborhoods are seeing nice, conforming, aesthetically-pleasing new construction.

But... from the developer (and investor) standpoint, it's still really tough to manage projects that will take 60-90 days to get permits.

Asbestos is never good news! That 10day notice is required more for those who may have claims against the property or to it, some distant relative who was the hier of uncle Tom who wasn't notified, some workman who has not filed a lien or some lender type as well as people who just don't like what you want to do, but they may not have much say in the end. Notice is required before you tear down someone's collateral or demolish thier claims in or to the property improvements.

J. are you required to tear down the whole house or can you do this as an improvement....may want a new construction deal, understand that, but what is common is to tear down a place a leave a stud wall and build off that as then it's not new construction and you don't have to comply with new construction requirements since it's a rehab. That may not work for you though on this..... :)

Originally posted by Bill Gulley:

J. are you required to tear down the whole house or can you do this as an improvement....may want a new construction deal, understand that, but what is common is to tear down a place a leave a stud wall and build off that as then it's not new construction and you don't have to comply with new construction requirements since it's a rehab. That may not work for you though on this..... :)

One of the things we've learned in this process is that this is a common myth (at least here in Atlanta). One of the reasons we were going to save the foundation (and one wall if necessary) is that we believed that it would mean we wouldn't be doing "new construction" and the whole process would be easier (like you said). But, according to the city, that's not the way it works.

If we take down a substantial amount of the house, it's considered new construction UNLESS we build back to the same exact profile of the original house -- same height, length, width, etc. Obviously we don't want to do that.

Again, this may be an Atlanta thing, but any major demolition will require us to adhere to the new setbacks and codes that are now in place... :(

As we say, RE is local! Here, we can get away with additions and modifications, but I can certainly see thier point. Good luck on it! :)

@Aaron McGinnis J Scott About the tree...hopefully nobody complains! When we bought that lot last year to build a spec house in Lake Forest, some real estate agents that lived in the neighborhood left us a note on the tree, saying Developers - we like our trees in Lake Forest - Go back to where you came from! It was funny. We didn't even plan on cutting down any trees.

Once you're done all the neighbors will be coming over to tell you how much nicer the neighborhood looks! Hang in there!

Originally posted by J Scott:
Originally posted by Bill Gulley:

J. are you required to tear down the whole house or can you do this as an improvement....may want a new construction deal, understand that, but what is common is to tear down a place a leave a stud wall and build off that as then it's not new construction and you don't have to comply with new construction requirements since it's a rehab. That may not work for you though on this..... :)

One of the things we've learned in this process is that this is a common myth (at least here in Atlanta). One of the reasons we were going to save the foundation (and one wall if necessary) is that we believed that it would mean we wouldn't be doing "new construction" and the whole process would be easier (like you said). But, according to the city, that's not the way it works.

If we take down a substantial amount of the house, it's considered new construction UNLESS we build back to the same exact profile of the original house -- same height, length, width, etc. Obviously we don't want to do that.

Again, this may be an Atlanta thing, but any major demolition will require us to adhere to the new setbacks and codes that are now in place... :(

Interesting bit of information, this.

In years gone by, we've done the whole "We left a stud so it's not new construction" song and dance. We're actually now running into this same problem where the city says, "You've rebuilt more than 50% of the exterior walls, so it's new construction" on our project in Ormewood... it would seem that the city is getting more strict about what they are calling new vs. renovation.

Originally posted by Aaron McGinnis:

Interesting bit of information, this.

In years gone by, we've done the whole "We left a stud so it's not new construction" song and dance. We're actually now running into this same problem where the city says, "You've rebuilt more than 50% of the exterior walls, so it's new construction" on our project in Ormewood... it would seem that the city is getting more strict about what they are calling new vs. renovation.

I'm getting the feeling that over the past 5 years, building has been pretty slow in Atlanta and the building department hasn't been focused on how to make the system more complicated and intimidating to builders. But, now that things are picking up again, they're devoting a lot of effort to new regulations, enforcements, etc.

Pretty soon I'll be discussing how we had to deal with new water regulations by creating a system to handle the first 1% of rain water runoff. A new water management requirement by the city...

DAY 67: ASBESTOS COSTS

After doing some more research, we determined that the $1800 quoted by our demo company for the additional asbestos work is actually very reasonable. The quotes we got from a couple other companies came in quite a bit higher, so we told our demo company to move forward with the abatement work.

We’re now scheduled to knock the house down on Day 70 or 71.

BUDGET UPDATE (DAY 67)

Btw, here's a budget update based on the new information we have about the project and the bids we have in-hand as of Day 67.

The right-hand (pink) column is the original estimate from the beginning of the project, which I posted on Page 1 of this thread. The "Labor," "Materials," and "Current Total" columns are the revised estimates based on current information. They are also color-coded based on whether they are just my guess (white), a formal bid (green) or completed and paid for (blue).

YOU CAN CLICK TO ENLARGE...

Hey J, your documentation is very thorough. Thanks!

In your pursuit of breaking down every detail of all the subs work:
1. I'm looking for pictures of J driving the bulldozer to load the dumpsters/dump trucks, then pictures of J driving the debris away from his site?

2. It's been my experience that the framing contractors, after the demo, will determine the foundation is not adequate or completely stable. And recommend an excavator and foundation company to build a suitable foundation;-(

3. If you think this regulation and permitting is bad, listen to mark Levin's Ameritopia. I only got halfway through and wasn't happy with our Country's direction!

Originally posted by J Scott:
Originally posted by Bill Gulley:

J. are you required to tear down the whole house or can you do this as an improvement....may want a new construction deal, understand that, but what is common is to tear down a place a leave a stud wall and build off that as then it's not new construction and you don't have to comply with new construction requirements since it's a rehab. That may not work for you though on this..... :)

One of the things we've learned in this process is that this is a common myth (at least here in Atlanta). One of the reasons we were going to save the foundation (and one wall if necessary) is that we believed that it would mean we wouldn't be doing "new construction" and the whole process would be easier (like you said). But, according to the city, that's not the way it works.

If we take down a substantial amount of the house, it's considered new construction UNLESS we build back to the same exact profile of the original house -- same height, length, width, etc. Obviously we don't want to do that.

Again, this may be an Atlanta thing, but any major demolition will require us to adhere to the new setbacks and codes that are now in place... :(

The reason we often save foundations/walls is because they happen to fall within the current setbacks. If we were to tear them down, we would have to apply new zoning, whereas if we save them they are grandfathered in.

We did this on a new build that had a garage on the property line. saved the slab and 2 block walls of the original garage as it allowed to sneak a 3 car garage in on a 33 foot lot.

I am doing this currently on a renovation as the current setbacks are 3 feet, but the current addition is only 18" from the property line. Those couple feet make a big difference in many of my projects. so we will be "modifing" the current addition, even though it would be much easier to tear down and rebuild.

Originally posted by Grant P.:

The reason we often save foundations/walls is because they happen to fall within the current setbacks. If we were to tear them down, we would have to apply new zoning, whereas if we save them they are grandfathered in.

For City of Atlanta these days, saving the foundation or even a couple exterior walls won't allow you (at least it didn't allow us) to stick with the existing setbacks. Because we demo'ed a substantial amount of the property (Aaron says 50%), the city is considering it new construction *UNLESS* we stick with the exact same design/dimensions of the existing structure.

The goal at this point in the project (it changes later as you will see) is to save the foundation, but move the front wall of the foundation back to adhere to the new setbacks. The city won't allow us to keep the existing foundation as-is because it's in front of the new setbacks and they consider this new construction.

Aaron McGinnis mentions above that he's going through the same thing for the first time with CoA...could be something new...

J Scott

I think I read earlier that you are paying cash for everything. Is there a reason you are not financing this?

Originally posted by Bryce Y.:

I think I read earlier that you are paying cash for everything. Is there a reason you are not financing this?

We have the cash and don't have any better use for it at the moment. If we weren't using it for our projects, it would likely be sitting in a savings account or a CD earning very little.

Plus, given that this is a new venture for us, we figured that the time frames could be greatly expanded (which so far they are), so I'd rather use cash on this project where we'll want to minimize holding costs.

DAY 71: DEMO DAY!!!

We knocked down a house today! It took several weeks to get the permits, but we got the clear for demo today, and within about 2 hours the house was in pieces. The big piece of bad news for the day was that the foundation — which we assumed was cinderblock with a brick facade that we were hoping to save for the reconstruction — was actually made of just brick, and it crumbled during the demo.

So, it appears we’re going to have to rebuild the entire foundation. We’re getting bids for that now, but it will likely add several thousand dollars to the budget. Good lesson for the future!

On the bright side, we can now officially say that we're building a completely new house… :)

CLICK HERE TO SEE A VIDEO FROM THE DEMO...

Btw, some people have asked how we're planning to tackle this project for so little money. The secret is reduced labor costs...for example, here's our demo crew (CLICK PIC TO ENLARGE):

J Scott - make sure you get that crew of yours to sign independent contractor agreements and lien release/waiver, and to supply ACORD certificate(s) of insurance :)

Originally posted by Steve Babiak:
J Scott - make sure you get that crew of yours to sign independent contractor agreements and lien release/waiver, and to supply ACORD certificate(s) of insurance :)

Not necessary...if they ever tried to sue me, I'd just send them to their rooms... :)

J Scott LOVE that crew! Our son was on the job from when he was a baby. When he was around 3 he got up on the backhoe with my husband. Some people saw it and called to turn us in for child endangerment... though he was just sitting on a parked backhoe! He learned so much going out on the jobs over the years, and now can run the jobs, and many other things.

Looks like you're moving right along! Soon they'll need more space on the site just to handle your post! LOL ...

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