BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
Back in March 2013, BiggerPockets and J Scott collaborated to release two books -- The Book on Flipping Houses and The Book on Estimating Rehab Costs (check them out here if you haven't already). As part of the book package, J was planning to do a detailed case study of one of his renovations (even more detailed than he does for most of his projects on his blog). We decided that instead of doing a case study only for those who purchased the books, he'd instead do one publicly here on BiggerPockets.
In this thread, J is going to provide a practically day-by-day diary of his first new construction project, from acquisition through sale -- including pictures, spreadsheets, invoices, bids, etc.
We hope you find this valuable! I know that I'm planning on following it closely so I can pick up a thing or two.
1/5/14 Update: The project is complete . . . read on!
2/19/14 Update: We've taken all the content of this thread and converted it into a free ebook for everyone who may be interested. Get your copy here: Diary of a New Construction Project Ebook
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
INTRODUCTION
I'm currently working on my first new construction project in downtown Atlanta (with a partner). While we both have a lot of residential rehab experience under our belts (over 100 projects between us), we have absolutely no new construction experience. The purpose of this thread is to chronicle in as much detail as I can, the process of acquiring an existing house, tearing it down, designing a new house, getting permits, construction of the new residence and finally the staging/listing/sale of the house.
My hope is that this thread will end up being part case study, part diary and (if I don't screw up too badly), part textbook. I plan to provide links to everything that might be useful throughout the process -- pictures, videos, budgets, schedules, plans/drawings, contractor bids, invoices, etc. And if there's anything I don't provide that you want to see, just let me know.
As of this writing, I'm currently about 4 months into this project, but we haven't even started to build yet (you'll see why as we move through the thread). I'm planning to start at the beginning (I've been keeping copious notes), and over the next couple months, I'll try to post updates at least several days per week, and hopefully catch up to real time by the end of the project.
Lastly, I hope this thread will be interactive. There are a lot of BP contributors with new construction experience (Rich Weese, @Karen Margrave, Aaron McGinnis and many others). I hope they'll jump in and provide insight, and I hope others with less experience will ask questions and help us all learn from one another. And again, if there's anything you want me to provide in this thread that I'm not already providing, feel free to ask!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Rob K:
What are the tiny forms in the middle? I'm assuming that they are to hold up a steel beam that runs the length of the house. If so, why have concrete hold them up instead of steel poles like in a basement. Wouldn't that be easier/cheaper/better?
Hey Rob,
I'm not a structural engineer, but here's my take...
First, the forms in the middle are concrete piers that sit on concrete footers. While the concrete footers are required, I do imagine that the concrete piers could probably be replaced by steel. But consider that the total amount of concrete required for these piers is probably about 5 yards (the entire wall and pier pour was 20 yards) and at about $90/yard, that's about $450 worth of concrete.
The steel for these beams likely would have been comparable in price to the concrete (for just materials), but the extra work of bolting the steel and the extra difficulty of securing the flooring structure to the steel would likely outweigh any cost savings of not having to build the forms.
Again, I'm not an engineer, so it's quite possible I'm missing something big, but my guess is that it's just easier to build a few more forms and pour a bit more concrete than to have to work with an entirely different set of materials (steel and bolts) and a different type of labor.
Just my guess...maybe someone with more experience can chime in...
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
13y
J Scott First thank you for doing this, I am amazed over and over again at how much time folks on BP spend helping others. As I was putting a new roof on my rental, I recalled your bid for your roof. Your roofer is still using felt paper. Our area has gone to a new titanium wrap that is probably a third the cost of felt, and can actually be left exposed for up to six months if properly installed. It is extremely durable and much better to walk on, but it it is a VAST improvement in that the wind wont rip it and tear it off. Just a thought. Ask your roofer, he might have a reason for using felt, and if so I would like to hear it. Thanks again.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Jerry W.:
Our area has gone to a new titanium wrap that is probably a third the cost of felt, and can actually be left exposed for up to six months if properly installed. It is extremely durable and much better to walk on, but it it is a VAST improvement in that the wind wont rip it and tear it off. Just a thought. Ask your roofer, he might have a reason for using felt, and if so I would like to hear it. Thanks again.
Very interesting...I've never heard of this, but I'm friends with one of my roofers, and I plan to ask him about it!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 189: INSPECTION (SORTA) & CONCRETE
What a ridiculous day. We weren't able to call in the inspection for the wall forms last night because the computers were down, but our foundation guy knows the inspector and called in a favor this morning -- the inspector says he'll do the inspection at some point today. Both my partner and my project managers are on vacation, so for just the second time in 5 years, I was stuck waiting at a job site for an inspector. And wait I did...
Between my partner and myself, we were at the site from 8:00am until 4:30pm, and the inspector never showed up. Finally, my partner called the foundation guy and had him check in with the inspector. Turns out the inspector was tied up at other sites, and wasn't going to be able to get out there before the end of the day. But, he said that if we paid another $100 to the third-party engineer, he'd take the engineer's approval and pass the inspection.
After waiting ALL DAY, we ultimately ended up just paying an engineer to give the approval and spending another extra $100.
On the bright side, 30 minutes later, the engineer was on-site with our approval, and 15 minutes after that, the concrete truck rolled up and started pouring concrete -- all at 5:30pm at night.
Here's the engineering letter and some pics of the concrete walls (still in forms):
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
13y
It's hard to tell from the pics, but it looks like a pretty deep crawl space. Will the house be up high off the ground, or will the crawl space floor be way below grade? I'm curious if you will need a sump pump in the crawl, or is it fairly dry there?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Rob K:
It's hard to tell from the pics, but it looks like a pretty deep crawl space. Will the house be up high off the ground, or will the crawl space floor be way below grade? I'm curious if you will need a sump pump in the crawl, or is it fairly dry there?
The walls are all 3' tall (other than the front wall, which is 4' tall). The bulk of the crawl space is below grade towards the front and due to the pitch of the lot, is fully above grade at the back. Given the slope of the lot and the fact that we are putting in some good foundation drainage, we don't think there will be any moisture issues with the crawl and don't plan to put in a sump pump.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 190: WALL FORMS OFF
We have a foundation!
Next step is waterproofing the foundation (spraying a tar-like substance on the concrete and laying a foundation drain around the perimeter of the structure), and then it's on to framing. It's amazing how quickly everything progresses when the weather (and the building department) cooperates...
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
13y
Originally posted by Keith Lutz:
Could you have put in a full basement, if you wanted?
Exactly my thought when I saw the last picture. In North Texas the soil expands and contracts too much, wreaking havoc on basements. My house has one, but I think less then 1 in 20 do in the area.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Keith Lutz:
Could you have put in a full basement, if you wanted?
Up North they are popular, but the three years I spent in Charlotte, they are rare, but popular among the northerners!
We could have, but it's very unlikely we would have gotten the return on investment. We'll be priced at about the top of what that area will sell for, and adding a basement likely would have cost an additional $20K in excavation, concrete and finishing.
Real Estate Lender · Pt Hueneme, CA · Member since 2012 · 110 posts · 47 votes
13y
I was fooled by the before pictures, especially the fourth one, looked like a basement to me. In fact I gave an opinion and felt stupid when I learned it was not a basement, LOL.
That is one large crawl space I guess. In my area there are no basements.
Really enjoying following this thread, thanks for doing this J.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Jon Klaus:
If you did construct and finish a basement, can you include it in the living space square footage number?
I don't know if it's a local/regional thing or not, but here in Atlanta, only above-grade square footage is included in the main living space number. Basement space (anything below grade) can be used as an adjustment for appraisal purposes, but the value of the square footage below grade (the adjustment) is much lower than the value for above grade square footage.
In fact, I posted to another thread last month about how my neighbor had two appraisals on his house in a 6 week period (both for refi purposes). The first came in at $393K and the second at $505K -- the major difference between the appraisals (other than the first appraiser being an idiot) was how they valued the below-grade square footage.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Rick Bradd:
I was fooled by the before pictures, especially the fourth one, looked like a basement to me. In fact I gave an opinion and felt stupid when I learned it was not a basement, LOL.
That is one large crawl space I guess. In my area there are no basements.
Until we actually saw it being built, we didn't realize the crawl would be this big either (there were a lot of last minute discussions between the foundation guys and the excavation guys.
The slope of the lot was the driving force behind the large crawl space. We could have done a lot less excavation and kept the crawl space small, but that would have made the foundation work more complicated and more expensive. Ultimately, what we ended up with was less expensive than a smaller crawl space because there was a lot less labor for the foundation guys (even though it required more Bobcat work and more concrete).
You'll see as we start framing that the front door is still pretty much at grade (just a small step up for the front porch)...but the back deck off the first floor will be about 3 feet up (the height of the foundation/sill plate.
The other nice benefit of this is that it will make it much easier to run mechanicals (plumbing and HVAC) under the house.
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
13y
Originally posted by J Scott:
Originally posted by Jon Klaus:
If you did construct and finish a basement, can you include it in the living space square footage number?
I don't know if it's a local/regional thing or not, but here in Atlanta, only above-grade square footage is included in the main living space number. Basement space (anything below grade) can be used as an adjustment for appraisal purposes, but the value of the square footage below grade (the adjustment) is much lower than the value for above grade square footage.
In fact, I posted to another thread last month about how my neighbor had two appraisals on his house in a 6 week period (both for refi purposes). The first came in at $393K and the second at $505K -- the major difference between the appraisals (other than the first appraiser being an idiot) was how they valued the below-grade square footage.
Its the same with CO, and I'd imagine most areas. Only above grade counts, but the basement square footage does get calculated in appraisals, comps, etc.
Real Estate Investor · Greenville, NC · Member since 2012 · 17 posts · 2 votes
13y
Just wanted to tag along and thank you, J, for taking the time and effort to document your process. I'm excited to see the project through completion.
I built my current home as a new construction 5 years ago, mostly because I was very ambitious, had a lot of contacts in new construction, and also incredibly naive!
Thankfully it went relatively smoothly and I was able to learn a ton. Thankfully it was NOT in crazy beaurocratic Atlanta!!
Aside from the education, it was also nice that even though I finished construction at the end of 2007, right as our construction "bubble" burst, I have been somewhat insulated in the fact that I saved a significant expense contracting the project myself. If I had simply bought an existing new construction home at market price in my neighborhood, I'd have been underwater almost immediately, and still waiting to try to recoup my investment 5 yrs later.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 191: WATERPROOFING
Our foundation walls got waterproofed today. They sprayed the concrete with a tar-like substance, which should keep any moisture from intruding, and they laid a foundation drain (basically a French drain) around the entire perimeter of the foundation.
Framing is scheduled to start next week (Monday), and the one new issue that's cropped up is that there are two very tall trees right off the back of the foundation, with branches overhanging where the structure will need to go up. Our tree guy will need to trim the trees up to about 30', which will likely cost us an extra $450 that we hadn't accounted for. But, he should be able to get the work done tomorrow (Friday) or over the weekend, before framing starts.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
13y
J Scott
Is it {still} common practice down south to simply tar (or rubber) seal basement walls?
Here it is becoming more common to run a dimpled membrane (like Delta MS or SuperSeal) from drain/footing to grade (or just above) .. sometimes in combination with a roll/brush on coating.
Of course, we often insulate basement / crawl space walls externally using {polyisocyanurate} hardboard or dense rock wool rigidboard and then apply a drainage plain and membrane over top.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Roy -
I'll be completely honest -- I have no idea!
This is one part of the foundation work that I hadn't even thought about, and I wasn't there when they were doing the work. I'll see if my partner has any specific knowledge about what exactly they did, why and how...
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by J Scott:
Roy -
I'll be completely honest -- I have no idea!
This is one part of the foundation work that I hadn't even thought about, and I wasn't there when they were doing the work. I'll see if my partner has any specific knowledge about what exactly they did, why and how...
My partner saw this question, and provided the following information:
---------------------------------------------------------
Here's a link that explains the waterproofing system we used:
The "whole wall" dimpled membrane systems someone mentioned are superior, but for our project the benefits don't outweigh cost.
Also we don't have to insulate foundations like they do up north BC we are considered a "warm-humid" climate. Most everyone is enforcing the 2009 energy code and they can check out local requirements for foundations and the rest of the house at
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
13y
Thanks J Scott
Thank-you for the follow-on.
I wasn't trying to imply insulating the foundation wall would make sense for you in Atlanta ... perhaps if you were creating a livable space (i.e. full {walkout} basement) it would be benefit the cooling load.
There are still homes here that are just sprayed or rolled with a asphalt / rubber membrane product similar to what you use - if a foundation is exposed during renovation, this seems to be how it is handled. The full wall dimpled membrane is becoming more common - particularly when insulation is involved.
We are also see some insulated concrete forms - where the insulation is embedded partway through the form prior to the pour.
Real Estate Investor · Plano, TX · Member since 2011 · 30 posts · 25 votes
13y
I finally had a chance to read thru this thread. Nice work. It's a great diary and good story. I too am doing my first scrape. It's quite interesting and I see many of the same challenges. However, I never thought I'd be able to say this, but your building department, rules and regulations are WAY worse than mine! And I'm building a new house in a Conservation District in Dallas, which is tougher than normal.
We have basic 3 residential classifications: Historic, Conservation and Others. IMO, you do historic because you love it, not to make money. Conservation generally means keep the period look, but you can modernize some aspects (but each conservation district can have more or less stringent rules). I'm building a Craftsman. I knew that we'd have a challenge with the building department and as a result, we held 3 pre-submission meetings with the Conversation Folks prior to plan submission. From Jan 30 close, I spend 6 weeks on plans, then about 2 months in review and we finally started demo June 29, a full 5 months after closing. I was the source of 3 about weeks of delay at the end with contracts.
In my case, I didn't plan to take on regular construction projects (even though I do flips) and knew that it could be a death of a 1000 paper cuts, so I hired a reputable investor-builder. My total construction costs, sans builder fees and lot purchase is sitting at $95/sq ft for 3760 sq ft. My number is padded a bit and I don't expect to exceed that number. I'm building a low-end luxury home. For fun, I'm going to do a line by line budget comparison to see where we differ. So far, your costs to date seem higher than mine, but I'm sure it's the opposite.
While the typical construction in my neighborhood is Pier and Beam (crawlspace), we're going with a slab to save costs on the foundation. I wonder why we have a difference in cost models that made us choose opposite? And because the typical architecture is Pier and Beam, we're having to build up the pad to give the appearance of that style, so my slab costs are higher than it would otherwise be.
On my project, we've allocated 150 days for construction in the contract, so I'm expecting about 120 days of build time with 30 days of oops. We're currently done with demo and are hauling in fill dirt for the pad.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 192: DOWN DAY
It's Friday, the foundation is complete, and we're ready to start framing. The framing crew doesn't want to start until Monday, so today is a lost day. We still need to prune the two big trees at the back of the property, and our tree guy expects to get to that over the weekend.
Next week should be an interesting one -- our framing crew comes in on Monday and they expect to have the house framed and ready for mechanicals to come in and start within 2 weeks. The same crew will be completing the framing, dry-in, siding, roof and front deck, so hopefully it will all go quickly and smoothly.
Here are a couple (not very interesting) pictures of the tree trimming: