Diary of a New Construction Project

525 Replies

Originally posted by J Scott:

EDIT: IS ANYONE EVEN READING THESE UPDATES ANYMORE???

Are you kidding? I'm glued to this thing!

J Scott,
I've always enjoyed reading anything that you post.

I know one thing, I'd never build a House in Atlanta, after I've seen what you've going through.

Raymond

DAY 160: PERMITS!

Clearly, a "day or two" in building department speak is different than a day or two in real life. We were told we'd likely be getting our permits a week ago, and we finally just did!

Total Cost of Permits (Not Including the $1240 for the Demo Permit): $2756

Total Cost for Printing Copies of the Drawings for the Permit Office: $310.32

Total Cost of the Expeditor: $1000

I wasn't sure how much the permitting process would cost, but all-in (expeditor included), we're looking to be somewhere in the $5300 range -- a good bit more than I had expected (we budgeted $3000).

Now that we have permits in hand, we're ready to move forward as quickly as possible.

We talked to our surveyor and asked him to stake out the structure boundaries for the grading and foundation guys -- don't want to take any chances on building the house in the wrong location. He wanted $325 to place 8 stakes (I'm in the wrong business!), but we negotiated him down to $250. He'll be doing that today.

We met with our grading/excavation guy this morning, and he's ready to start moving dirt -- he's recommending much more excavation than previously expected (to make building the walls easier and more consistent), and the foundation guys agree with him. That will be an extra couple thousand dollars, but it will make the foundation pour much easier and cleaner, so it's a no-brainer. He's ready to start tomorrow.

We also met with the foundation crew this morning, and they're ready to start building forms and pouring concrete as soon as the site is prepared. Assuming the extra site prep, they're still good with the estimate they gave, though the final numbers will depend on the actual amount of concrete poured.

Lastly, we have our termite company on standby to do termite treatments once the footers are poured (they'll treat the dirt around the footers/piers). That will be a few hundred dollars.

The goals for the next 10 days are as follows:

1. Stake out the property boundaries
2. Grading/excavation
3. Build forms for footers
4. Building inspection for footer holes
5. Pour concrete for footers
6. Build forms for walls
7. Building inspection for wall forms (I think???)
8. Pour walls

Only issue at this point (that we know about! :), is that they're calling for rain for the next several days...

I see sprinkler inspection on the permit. Is a system required?

Originally posted by Jon Klaus:
I see sprinkler inspection on the permit. Is a system required?

That's a great question -- I hadn't noticed that! I'd be surprised if it were a requirement...especially given that we didn't include it on our plans and nobody mentioned it. But, it's on my list to investigate...

Thanks Jon!

Originally posted by Karen Margrave:

As I think I told you before, our son, Michael, draws the floor plans, elevations, and site plan, then we take to the structural engineer to do his thing, after which it goes to an architect to catch anything that was missed (though last go round there was nothing) then he signs off.

This is the process we need to improve in the future, and that sounds like the best approach.

The piece that threw us on our project is that after we finished the drawings, we submitted them to a couple lumber companies to get take-offs and prices on lumber -- each lumber company suggested changes to the plans based on getting the cost of materials down. It ranged from using 2x4s to 2x6s to pre-engineered flooring, etc. I was surprised that no two lumber yards agreed on the best design, but I guess they all have engineers with their own preferences.

Ultimately, we had to (well, chose to) redo our final drawings based on the recommendations of the lumber company we decided to use. They moved a couple piers around to save a couple hundred dollars -- not a huge change, but did require an update to the drawings. It's not that our architect/engineer was wrong, they just didn't account for optimizing the cost of materials.

Is that something you factor into your process? Does your engineer do that part as well?

Originally posted by J Scott:
Ultimately, we had to (well, chose to) redo our final drawings based on the recommendations of the lumber company we decided to use. They moved a couple piers around to save a couple hundred dollars -- not a huge change, but did require an update to the drawings. It's not that our architect/engineer was wrong, they just didn't account for optimizing the cost of materials.

Is that something you factor into your process? Does your engineer do that part as well?

Find a draftsman who has significant experience drawing for the national builders. They're well trained to design with every possible cost cutting measure in mind.

EDIT: IS ANYONE EVEN READING THESE UPDATES ANYMORE???
This particular Forum seems like it's contrived. It's hard to imagine someone Experienced, having this many Oversights (mistakes & overruns).
Have any of J's competitors had this much trouble? I thought the whole idea of this BP site was to gain experience from folks who've done something and avoid their mistakes?

Originally posted by Mike Hurney:
EDIT: IS ANYONE EVEN READING THESE UPDATES ANYMORE???
This particular Forum seems like it's contrived. It's hard to imagine someone Experienced, having this many Oversights (mistakes & overruns).
Have any of J's competitors had this much trouble? I thought the whole idea of this BP site was to gain experience from folks who've done something and avoid their mistakes?

Mike, I did over 20 rehabs before I did my first spec build. The learning curve was still immense despite my rehabbing experience. J is brave enough to document his first time on a new build warts and all. I aspire to that level of humility.

Total Cost of the Expeditor: $1000

Wow, How much time/money would it have taken without the Expeditor!

Originally posted by Keith Lutz:
Total Cost of the Expeditor: $1000

Wow, How much time/money would it have taken without the Expeditor!

Using an expeditor in Atlanta is generally more about avoiding frustration and miscommunication that then leads to HOURS AND HOURS of wasted time.

From my experience, on average, when you show up to the building department and put your name on the list at intake you'll spend about 2-3 hours waiting in line to talk to someone. It is not at all hard to waste days and days of time just waiting at intake... repeat every time you have to go back.

Very frustrating.

EDIT: IS ANYONE EVEN READING THESE UPDATES ANYMORE???
This particular Forum seems like it's contrived. It's hard to imagine someone Experienced, having this many Oversights (mistakes & overruns).
Have any of J's competitors had this much trouble? I thought the whole idea of this BP site was to gain experience from folks who've done something and avoid their mistakes?

Mike Hurney Your kidding right! You don't remember filling out your first contract, your first rehab, your first spec build, and the failures along the way?

Not that I am anywhere near a spec build, but I am thankful to J for this, because it will definitely be a nice guide. I smell an e-book coming.

Originally posted by Aaron McGinnis:
Originally posted by Keith Lutz:
Total Cost of the Expeditor: $1000

Wow, How much time/money would it have taken without the Expeditor!

Using an expeditor in Atlanta is generally more about avoiding frustration and miscommunication that then leads to HOURS AND HOURS of wasted time.

From my experience, on average, when you show up to the building department and put your name on the list at intake you'll spend about 2-3 hours waiting in line to talk to someone. It is not at all hard to waste days and days of time just waiting at intake... repeat every time you have to go back.

Very frustrating.

It's the same way in Austin. Avoiding permanent brain damage is well worth $1k.

Originally posted by Mike Hurney:

This particular Forum seems like it's contrived. It's hard to imagine someone Experienced, having this many Oversights (mistakes & overruns).
Have any of J's competitors had this much trouble? I thought the whole idea of this BP site was to gain experience from folks who've done something and avoid their mistakes?

I guess I'll take that as a compliment (in other words, "J can't be that dumb, can he?!?!")... :)

Mike -

I can assure you that every detail is real and accurate. While I have plenty of experience rehabbing, I've never been through the new construction process before, and much of this is new to me (hence the reason I started this thread in the first place). I'm pretty sure that I couldn't make up a story that was more realistic and interesting than real life. Btw, I'm posting all the invoices and documents with our vendor/contractor contact info...feel free to call them and they'll confirm that I'm often as dumb as I seem... :)

The funny thing is, until reading your post, I actually thought we were doing pretty well.

We're $13K over our original budget, but we've also added about 700 square feet to the project, so on a per-square-foot basis, we're actually under budget (a contrived way to look at it, but it indicates that we're not completely naive).

Also, the time frame to get permits was ridiculously long (6 months), but given that it's not uncommon for it to take experienced rehabbers 3 months for City of Atlanta permits, I guess it could have been worse.

Originally posted by :
Originally posted by Aaron McGinnis:

Wow, How much time/money would it have taken without the Expeditor!

Using an expeditor in Atlanta is generally more about avoiding frustration and miscommunication that then leads to HOURS AND HOURS of wasted time.

As Aaron pointed out, you don't just show up and drop off permits. You sign in, wait a couple hours, get called by an "intake" person who reviews the permit application and drawings right there, and if everything is not in order, send you off to make corrections and come back another day.

Between my partner and myself, we did this three times and spent about 10 hours. And we still weren't close to having everything we needed. Then, once you do get them to even accept your application and drawings, you need to deal with the follow-up questions and changes.

This whole process could easily take someone inexperienced 20-30 hours. Plus, in addition to time saved actually sitting and waiting, I have a feeling we probably shaved a month or two off the total process, as the expeditor knew exactly what we needed and what would be asked for by the actual reviewers.

$1000 was a bargain, in my opinion...

I'm actually enjoying this thread and wish that more people would be willing to step up and do this. Keep up the good work J. Will be following until the end; can't wait to see the finished product and final numbers.

Originally posted by Mike Hurney:
EDIT: IS ANYONE EVEN READING THESE UPDATES ANYMORE???
This particular Forum seems like it's contrived. It's hard to imagine someone Experienced, having this many Oversights (mistakes & overruns).
Have any of J's competitors had this much trouble? I thought the whole idea of this BP site was to gain experience from folks who've done something and avoid their mistakes?

Mike, Why the cynicism? J's taking a lot time out of his schedule to share his experience....for the good of the BP community. There's no need to criticize what he's doing....or insinuate that it's untruthful. If you aren't finding value in this thread, there are lots of other ones you could follow. A new one pops up every few minutes. There's one now....

Keep the updates coming, we appreciate your time and effort on this thread J. I would also consider what you have done so far as pretty good for stepping out of your comfort zone as well. I am sure I would have made quite a few more mistakes.

Originally posted by Mike Hurney:
EDIT: IS ANYONE EVEN READING THESE UPDATES ANYMORE???
This particular Forum seems like it's contrived. It's hard to imagine someone Experienced, having this many Oversights (mistakes & overruns).
Have any of J's competitors had this much trouble? I thought the whole idea of this BP site was to gain experience from folks who've done something and avoid their mistakes?

Does not sound like you have dealt with building departments much.

My partner is an architect with 40+ years experience, and designs 250 million in new construction a year. We always get grief from the building department on spec builds somewhere along the way. It is part of the process.

You sign in, wait a couple hours, get called by an "intake" person who reviews the permit application and drawings right there, and if everything is not in order, send you off to make corrections and come back another day.

Between my partner and myself, we did this three times and spent about 10 hours. And we still weren't close to having everything we needed. Then, once you do get them to even accept your application and drawings, you need to deal with the follow-up questions and changes.

This whole process could easily take someone inexperienced 20-30 hours. Plus, in addition to time saved actually sitting and waiting, I have a feeling we probably shaved a month or two off the total process, as the expeditor knew exactly what we needed and what would be asked for by the actual reviewers.

$1000 was a bargain, in my opinion...

I think you took my statement the wrong way, or I said it wrong. I agree $1,000 is a bargain... I paid over $2,000 to have something expedited to my home on Long Island when I sold it.

I was asking How much in savings, which I think you pointed out with 20-30 hours worth.

Keith

DAY 161: NOT SO FAST!

If you recall, we got our permits yesterday. But, unfortunately, that doesn't mean we're ready to break ground just yet. My partner noticed the following note in the stamped permit package from the city:

We called the number and the inspector isn't available to meet until at least tomorrow and possibly the following day. Looks like our grading isn't going to start just yet... :(

The surveyor did get out to the property to stake the boundaries of the building. Here's his invoice for that work (we ultimately talked him down to $250):

And here's what our budget is looking like at this point in the project, now that demo and permits are done and we have bids for foundation and framing (CLICK TO ENLARGE):

As it stands, we're at about $63 per square for the project, given our new (and presumably final) square footage of 2672 sf.

J:

In looking at your budget, you don't have any line items for your costs (project management). Is that coming out of the profit you expect? It sounds like this is a lot of effort for 1 house and you could have completed several rehabs in the same period of time.

Also, what about the carrying costs? You may have covered this in page 1 or 2, but i can't remember. It has taken 6 months to get to this point so your carrying costs are piling up - whether you used debt or equity, that capital has costs associated with it.

Originally posted by Luis V:

In looking at your budget, you don't have any line items for your costs (project management). Is that coming out of the profit you expect? It sounds like this is a lot of effort for 1 house and you could have completed several rehabs in the same period of time.

Both my partner and I have full-time project managers. Their salaries are amortized across lots of projects, so while there is certainly a cost for their management contributions, it's not easy to calculate exactly what that cost is. Personally, we treat project management as an expense, not as cost of goods sold, so it wouldn't be part of my typical project analysis anyway.

But, in short, that certainly should be factored into the equation any time you do a rehab project.

As for your point about completing several rehabs in the same timeframe, that is correct. In fact, we *have* completed about 20 rehabs in the time we've been working on this project. That's the nature of rehabbing -- some projects take longer than others and decisions on which to do and which not to do need to be made based on projected profits, ROI and risk.


Also, what about the carrying costs? You may have covered this in page 1 or 2, but i can't remember. It has taken 6 months to get to this point so your carrying costs are piling up - whether you used debt or equity, that capital has costs associated with it.

Carrying costs so far have been very low. The land was cheap relative to the ARV, we paid cash, and the renovation costs have been minimal so far, as we haven't yet started construction.

That's the interesting part of this new construction project -- while the total time frame may be long, the bulk of the money doesn't go in until towards the end of the project (when construction starts).

Originally posted by Mike Hurney:
EDIT: IS ANYONE EVEN READING THESE UPDATES ANYMORE???
This particular Forum seems like it's contrived. It's hard to imagine someone Experienced, having this many Oversights (mistakes & overruns).
Have any of J's competitors had this much trouble? I thought the whole idea of this BP site was to gain experience from folks who've done something and avoid their mistakes?

Hey Mike, J said it nicer than i would have. Kiss my @$$ would of been my response.

DAY 162/163: EROSION CONTROL INSPECTION

Unfortunately, the erosion control inspector wasn't available to come to the property the following day for the pre-start-of-construction inspection (see my last post), but was able to come out the next day.

She spent about 30 seconds looking around, was satisfied that we were in good shape to start construction, and gave us our approval to officially start.

Only problem is that this is now Friday morning, and our grading/excavation guy isn't going to want to start work until Monday. So, while we got our permits on Tuesday of this week, we lost the entire week to more bureaucracy.

On the bright side, we're scheduled to FINALLY break ground on Monday morning!

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