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!
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
13y
OMG! I haven't checked in on this page for a while, and WOW!! It's looking really good! Now... aren't you glad you're doing new construction? It's a process for sure, but now you'll have one under your belt, and the stuff you've learned is invaluable!
It's always fun to watch as it goes from one stage to the next. I'll be checking in more regularly, I know things change fast from here on out. You can be proud of the job you're doing there.
Electrical Contractor · Vail, CO · Member since 2010 · 40 posts · 10 votes
13y
Do you really think you will be able to find a buyer who is willing to pay for cable/phone as an extra? You might as well pay for it now than put in later because you know every other house is most likely going to have it included. Check with your electrician if the extra license is just for the alarm or for the phone and cable as well.(That's kind of ridiculous)
You're also probably better off waiting until you're complete until you sell so you don't get bogged down with home owners picking out finishes, making changes, etc. You can always refer them to your contractor for any extras while you move on to the next one.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Michael Stole:
LMAO, I dont think this is what J Scott expected to here.
Originally posted by Dawn A.:
I am reading it and it makes me confident that I DON'T want to build a house!
Funny, I missed that quote above...
I think it's just like a lot of other things -- the payoff is proportionate to the effort expended. In this case, there was a lot of work and some frustration to get to where we are (and will likely be more before we're done), but the feeling of accomplishment and the product we're creating is more than worth it.
I had never really considered building my own primary residence before, but after this -- and now that we're on the market for a new house -- we're highly considering it. Not to mention all the new business opportunities it opens up.
That said, everyone enjoys different types of challenges, and I can certainly understand if some people wouldn't want to expend the time/effort for something like this -- there are plenty of aspects of real estate where I think to myself, "It's just not worth it..."
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Dave Martel:
Do you really think you will be able to find a buyer who is willing to pay for cable/phone as an extra?
I think most buyers aren't going to even notice (and with phone, most won't care). If they do notice, I don't believe it will be a deal breaker (it never has been before), and if they ask for it as part of an offer, we're happy to provide it and use it as a negotiation tool.
Doing this later will be a lot less expensive (even if we do it in the walls the exact same way), as we wouldn't pull a permit. If we do it now, we'd have to pull a separate permit.
Check with your electrician if the extra license is just for the alarm or for the phone and cable as well.(That's kind of ridiculous)
It is for all low voltage wiring. In the City of Atlanta, that's a completely separate licensing and permitting process. And, yes, I agree it's ridiculous.
You're also probably better off waiting until you're complete until you sell so you don't get bogged down with home owners picking out finishes, making changes, etc. You can always refer them to your contractor for any extras while you move on to the next one.
Yup, we've certainly learned this over the 50+ renovations we've done previously... :)
Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
13y
RE: Low voltage
After your mechanical inspections just go ahead and throw in all of your cabling right before your drywallers show up. Make notes of exactly where the cables dead end in relation to electrical outlets and just cut the wall and pull them out after your C.O. That'll be pretty cheap and a lot easier than retrofitting.
If I was buying new construction it would rub me the wrong way that the builder considered something as basic as coax cable to be a negotiating point.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Steve K:
After your mechanical inspections just go ahead and throw in all of your cabling right before your drywallers show up. Make notes of exactly where the cables dead end in relation to electrical outlets and just cut the wall and pull them out after your C.O. That'll be pretty cheap and a lot easier than retrofitting.
If I was buying new construction it would rub me the wrong way that the builder considered something as basic as coax cable to be a negotiating point.
Steve -
That's a great idea (unless, the City of Atlanta Building Department is reading this, in which case, it's a horrible, horrible idea)...
We're going to ask our electrician if he's willing to do this for us after we get our insulation inspection.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 205: ROUGH PLUMBING
It's Thursday, and we're starting our rough plumbing. Tomorrow we'll start rough electrical and HVAC and hope to have our rough inspections early next week.
Homeowner · Knoxville, TN · Member since 2011 · 207 posts · 73 votes
13y
Looking good J. We are fairly close regionally (just a couple of hours) and the weather has really been kind to you this week (compared to the last several weeks with 5+ days of rain). Glad they were able to finish framing and now with a roof over your head, delays shouldn't continue to accrue.
BTW, thanks so much for walking us through this, I just spent about an hour or two reading from start to finish on this thread and it's been a great resource. Your books also get here next week, and I'll sit down with a cup of coffee to start going through them.
If you weren't moving to Maryland soon, I'd probably take a day or two off work and make you walk me around a couple of your open projects (short drive from Knoxville) and share some additional wisdom with an intent learner.
Best of luck with the electrical and HVAC today and a pleasant weekend! Talk soon.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
13y
Originally posted by J Scott:
...
We realized that we hadn't planned for any low voltage wiring (alarm, phone, data, cable), and talking to our electricians, apparently there is a whole separate licensing for that work, which of them hold. We called a few people who are licensed, but the bids were ridiculous ($1500 to run data, phone and alarm lines), so we decided that we'll just install a wireless alarm system (which are very common these days), not install phone lines (nobody should care) and to do data/cable installation as an upgrade for buyers who want it.
...
Did you consider putting conduit in place behind the walls to make running these data lines easier? I had conduit placed from attic to basement in my home when it was being built, and then when later some additional electrical needs came up, we were in decent shape to complete without having to use any surface wiring (like I see on some of my neighbors' exteriors).
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Steve Babiak:
Did you consider putting conduit in place behind the walls to make running these data lines easier? I had conduit placed from attic to basement in my home when it was being built, and then when later some additional electrical needs came up, we were in decent shape to complete without having to use any surface wiring (like I see on some of my neighbors' exteriors).
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
13y
Steve beat me to the conduit promotion. I put them in my renovations to allow cable to be pulled between floors and the length or span of a floor. I even leave pulls in them for later use. You will spend a little more in materials when you pull cable, but what you save in labour and clean-up makes it worthwhile.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 206: MORE ROUGH WORK
It was a productive week. We're finishing up rough plumbing today (Friday), finishing up the exterior framing and starting HVAC and rough electrical.
On Monday, we'll start the roofing, on Tuesday we hope to have all rough mechanical inspections, on Wednesday we hope to have our framing inspection and start insulation, and on Thursday we hope to start siding and have our insulation inspection.
Drywall should start either the end of next week or the beginning of the following week.
Real Estate Investor · Ottawa, Ontario · Member since 2011 · 217 posts · 14 votes
13y
A plumber who previously worked for me ever told me that he could finish the rough plumbing in a 3000 sqft new construction in two days, just by himself. I was amazed by how fast the rough plumbing can be done by an experienced plumber.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 209-210: ROUGH COMPLETION/INSPECTIONS
It's been a good start to the week. We finished up rough electrical, plumbing and HVAC over the weekend and on Monday, and on Tuesday we had our electrical and plumbing inspections first thing in the morning. We passed both.
Our HVAC company forgot to call in the inspections for Tuesday, but they were able to pull some strings in the morning and get the inspector out there in the afternoon. We passed HVAC as well. So, all rough mechanical inspections have been passed.
We're waiting for our siding company to install the house wrap, which we'll need before we call for our framing inspection, and in the meantime, the roofers started on the roof today and should be complete by tomorrow.
We also had our grading company back-fill dirt around the foundation where it was excavated prior to construction starting. Turns out that they had moved less dirt than they had anticipated, and we actually are going to need more dirt delivered on-site to complete the back-fill.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAYS 211-212: ROOF/DRY-IN
It's been a slow Wednesday and Thursday of this week. On Wednesday, we finished up the roof. On Thursday, the crew started dry-in, including house-wrap, door installation, window installation, etc. We'd likely be ready for framing inspection on Friday, but we've put it off to Monday just to be safe.
In the meantime, we're finalizes our sheetrock bids, ordering cabinets, putting together our flooring and trim plans, etc. I'll post all that stuff in subsequent post.
In the meantime, here are the final invoices from our rough electrical, rough plumbing, foundation waterproofing (we hadn't budgeted for this), and the first month of our porta-potty:
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 213: Wrap, Doors, Windows, DET Test
The framing company finished up installation of the house wrap, exterior doors and windows today. Also, my partner has a keen eye, and noticed that on the interior staircase, the top step was slightly shorter than the rest of the steps on the staircase -- Atlanta code is that all steps must be 7.5", plus or minus 5/8". The top step was too short to meet code.
The framing company took full responsibility and while we haven't been back there yet to verify, we believe the issue was resolved and we're ready for framing inspection today (Monday).
We also learned of another testing expense we weren't familiar with. Apparently, when you install a new HVAC system, by code you must have a Duct and Envelope Tightness (DET) test. This is basically a test to verify that the central HVAC ducting is well sealed and leak-free. The test was $150 through a third-party testing company, and we passed without issue.
Here are some pics of the house wrap, doors and windows:
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 217: LEARNINGS & BUDGET UPDATE
Nothing much happening at the project today. We expect insulation to start tomorrow, insulation inspection on Thursday and then hopefully start sheetrock on Friday. In addition, we hope to have siding mostly completed by the end of the week.
In the meantime, here are some important things we've learned over the past several days:
- Insulation. Turns out that, technically, parts of our second story is counted as an attic space (by the city) instead of as a second story living space. This is because parts of the vaulted ceiling are not conditioned. This wouldn't be a big deal, except that it means we have to adhere to insulation requirements for attic space (R-19) instead of insulation requirements for living space (R-13). Unfortunately, R-19 batt insulation is much thicker than R-13 batt insulation, and the 2x4 framing on the second story won't support the thicker batt. Ideally, the second story would have been framed using 2x6 framing, but neither we, the engineer, the framers nor the architect realized this would be an issue, so we went with the 2x4 framing. Ultimately, the insulation company will need to install foam board insulation prior to using the R-13 batt to bring the insulation up to code, making our insulation more expensive than planned. Not a huge cost, but one that could have been avoided.
- Crawl Space. When we were planning the build of our foundation walls, the foundation company asked if we wanted our crawl space to be vented or not. We had no idea, so we asked what they recommended. Their response was, "We haven't done a vented crawl space since they removed that requirement 2 years ago." So, we told them to do what's typical, and not vent it. Turns out we didn't have all the information we should have when we made that decision. While it's true that a vented crawl space isn't required by code anymore, if the crawl isn't vented, code does require a dehumidification system to be installed and insulation to be installed on all the interior foundation walls. Ultimately, this would add a good deal of expense to our foundation cost. So, we figured out a way to retrofit the crawl to be vented -- we used a combination of the existing entry door to the crawl space and cutting vent holes in sections of the crawl space that are framed instead of poured concrete. We shouldn't incur any additional expense for this work, but not knowing the details of the code almost cost us significantly.
- Driveway. The existing driveway to this property (which was likely 50+ years old) was in pretty bad shape when we bought it. Between the dumpsters, heavy equipment and trucks entering and existing the property, the driveway has practically been destroyed. We hadn't budgeted for a new driveway, and that will now have to be added. Our best options are concrete, blacktop or crush-and-run (in order of most to least expensive) and my partner talked to another company who says they have a machine that will run over our existing driveway, and essentially crush it into gravel for an even lower price. We'll make a decision in the coming weeks on which way to go with the driveway, but for now, I'm putting an extra $5000 into the budget.
In terms of budget, we're about $25,000 over our original estimate, but we're also building about 700 square more than we had anticipated. At our $67 per square foot building cost (based on current estimates), we'd actually be under budget if we had stuck with building our original floor plan.
Here's what our budget currently looks like (click to enlarge):
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 218: INSULATION, SIDING, TRIM
For yesterday's update, I mentioned that insulation hadn't started yet and that we'd be starting today. I was misinformed (I'm not in Atlanta right now), and it turns out that not only did insulation start yesterday, but it finished yesterday as well.
Today we had our insulation inspection, and it took the inspector about 10 seconds to peek his head in the front door and pass us. Which means we're on to sheetrock. The sheetrock is scheduled to be delivered tomorrow, and depending on whether it arrives in the morning or afternoon, we'll either start hanging tomorrow or Friday.
Also, siding and trim started today. I'm not sure how long that's expected to take, but I imagine we should be mostly complete by the end of the week.
Sheetrock is expected to take about a week (it's been rainy and humid, which drags out the drying process), and we're hoping to start trim and painting about a week and a half from now.
Looking good! I bet you'll be happy to be finished. Have you had interest from buyers yet?
Actually, I'm a bit sad that we got through the first half of this project (foundation, framing, etc) so quickly. Those are the areas where I don't have much experience, and I feel like I could have learned so much more had there been more challenges or issues. Not that I'm wishing we had more issues, but the learning experiences were great.
At this point, the rest of the project should just be auto-pilot -- sheetrock, trim, paint, cabinets, finish mechanicals, flooring, etc. This is the part we've done a hundred times and where any issues will be more annoying than interesting, so hopefully it will go smoothly.
We have a bunch of potential buyers who are waiting until the property is complete. None that appear to be overly serious, but we've pretty much stopped marketing the property until it's finished at this point.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 219: SIDING, SHEETROCK DELIVERY, MORE BIDS
We completed about 50% of our siding and trim yesterday and while today isn't yet finished, I think we'll get close to completion. I'm hoping it's complete by the end of the week (tomorrow). Some pictures below.
We had our sheetrock delivered today, but unfortunately, the location of the dumpster prohibited the boom truck from being able to get the sheetrock onto the second floor. We had the dumpster company come move the dumpster, but they didn't move it far enough, and the problem remains. We'll either have to have the dumpster removed and eat the extra dumpster space, or have the sheetrock guys hand-deliver the sheetrock into the house, which will likely cost even more. This is now a tomorrow issue, and hopefully it will get resolved as we're starting sheetrock on the first floor tomorrow.
We also got some additional bids today:
- Interior Paint (Labor and Materials): $5400
- Exterior Paint (Labor and Materials): $2700
- Trim/Carpentry Materials: $3000
- Trim/Carpentry Labor - $3150
The interior paint bid seems high to us ($2 per living space square foot), but we've been using this painter for 5 years and he swears that this is his standard price for new construction, as there's a lot of extra cost (caulking, priming, extra touch-ups after sheetrock touch-ups, etc).
Also, I had originally estimated finish carpentry/trim and interior doors to be about $13,000. Don't know what I was thinking -- the actual price looks to be about $6000, so we'll see a great savings there. After all the little extras that keep hitting the budget, this is nice to see.