Investor · Denver , CO · Member since 2011 · 129 posts · 59 votes
Finally after months of having the architect draw up prints and an even longer time waiting for the city to review the prints - The city is just a bit swamped in applications - Today we officially started construction. Feels good to finally be moving forward.
We are taking a 750 ft bungalow and adding a two story addition to the back side. We will more than triple the size of the house. Right now the house has 1 small bedroom and one bathroom. When completed we will have a very large first floor master bedroom/bathroom and three upstairs bedrooms.
We are building in one of the hottest neighborhoods in Denver - The Highlands. So we will have some upscale finishes in this house.
In the pictures below we are pouring the city required shoring caissons so that there is no collapse of our excavation into the adjoining properties.
Awesome!!! Permitting is taking at least 4 months for a clean file from what I hear. Can you share the preliminary numbers with us to give us an idea of the project?
Agree and thanks for sharing. Love to understand your risk/reward for a long process. I too am currently upgrading a home in Highlands Ranch putting a lot into improvement hoping for some equity. Please keep us updated!
So here are my initial numbers and how I got into this project. A few years ago we did an addition on the house next door. The owners who purchased that property from me called me to say that their neighbor was thinking of selling. I went over and talked to the owner about selling me the house. Only one issue, he wanted more that I wanted to pay. So we struck up a great deal. He would sell me the house and hold a note until we finished construction. This is great because I do not having any of my money into the project until after we break ground. And I can pay the owner more money at the end of the project since I don't have any holding costs while waiting for approved plans.
We are purchasing the house for $300,000. The constructions costs will be about $250,000. We just received an appraisal at $740,000. (Appraisal based on the drawings). Being conservative, at a $700,000 sale price, that leaves us a gross profit of $150,000. Once i subtract out Realtor commissions, closing costs anf other misc fees I should be close to $100,000 of profit.
But then this is a year long project from start to finish.
We are digging. The excavating is complete and we should footing forms install, inspected and poured on Monday. Once the city is out of the way progress is steady.
How do you know the contractors are getting good money these days. You pull up and find their brand new trailer at your job site.