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
@J Scott We may have been doing this for a lot of years, but believe me, I have learned an incredible amount from you on here! None of us know it all, and if we think we do, there's probably some hard lessons ahead!
I really like those cabinets, a very modern and classy look...amazing how quickly things seem to be going!
If anyone in the Atlanta area is interested, my partner on this project owns a large cabinet company and does a lot of work for investors (they were the supplier and installer for this project). If anyone is interested in his contact info, let me know.
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
13y
@J Scott OMG I LOVE those cabinets, and how the interior is looking! I'm so excited watching your project get completed, it's almost as if it were my own!
You've got me chomping at the bit to get our next one started. We just got our financing, and our son already has the preliminary plans done, so...
Next for you, your personal house in Maryland did you say?
Next for you, your personal house in Maryland did you say?
I'm hoping so...
We're closing on the purchase of the land next week, we have financing in place for the construction, we just got done doing our surveys, and now we need to figure out if we can build something we want to build. The two big constraints are:
1. Setbacks. It's a corner ("irregular") lot and the current setbacks allow for essentially no building envelope (the existing house was built before the existing setbacks, and is well over the setbacks on 3 of 4 sides). The woman who is head of zoning believes we shouldn't have any issue getting a variance or two, but until it's official, I'm not getting my hopes up.
2. Limit of Disturbance. In Maryland, for erosion control, if you disturb more than 5000 square feet of land, you need a special site development plan that costs about $10K and takes about 6-12 months to get approved. So, if we want a house anytime soon, we need to keep the disturbance area to under 5000 square feet. To come in under that number, we'll need to reuse as much of the existing foundation as possible when we tear the old house down, and then we'll have to design the house in such a way that we can reuse the old driveway, etc. Basically, we won't have much choice in our building footprint, and need to ensure that we can actually build a house in a footprint that doesn't disturb more than 5000 sf.
We haven't even started, and it's already a complicated project, especially given that we're building a team from scratch and learning all the local building customs and requirements. We also still don't know how much it will cost to build in Maryland, so we need to ensure that we can meet our budget (we don't want to build unless we'll have a some equity when we're done).
Anyway, I'll probably start a thread about that project once this one is done... :)
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
13y
I'm curious if you got this from a small local bank or a larger bank? About a year ago, I was thinking about building my own residence. I called 5-6 banks about financing and only one was offering construction loans. The terms were good except they would not let me act as the builder, even though I have a builders license. Their rules prevented me from building my own house. Maybe the rules have changed, or you just found the right bank.
I'm curious if you got this from a small local bank or a larger bank? About a year ago, I was thinking about building my own residence. I called 5-6 banks about financing and only one was offering construction loans. The terms were good except they would not let me act as the builder, even though I have a builders license. Their rules prevented me from building my own house. Maybe the rules have changed, or you just found the right bank.
We actually decided to go with a short-term private loan from a friend/colleague for the construction costs. Like you said, finding banks to handle the deal without having the jump through hoops was tough.
We did talk to BB&T, and they seemed to have a reasonable process for construction loans for owner occupants, but they require that the construction documents and detailed budgets be in place prior to funding of the loan. In our case, we are purchasing the property before we have all our ducks in a row (sellers want quick close, and we can sell the land for more than we paid if the building thing doesn't work out for us), so BB&T wouldn't fund the construction loan at closing. And they require 6 months seasoning before they'll do a cash out refi, so if we went with the construction loan from them, we'd have to wait 6 months to start construction or pay out of pocket and wait 6 months to cash out. Considering we expect to be done in 6 months, this didn't work for us.
As far being our own GC, they seemed flexible about that. And if you're a licensed GC, I imagine they wouldn't have any issues letting you do it (I'm not licensed).
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Days 233-234: More Trim, More Paint, Footers
Thursday and Friday of this week were spent finishing up the trim work, continuing painting (including the exterior) and pouring the footers for our porch and deck. The footers were a big challenge, as it's rained nearly every day this summer, and not only was the ground exceedingly wet, but the front porch is being placed over dirt that was recently backfilled.
Ultimately, the guys had to dig down about 4', and then lay gravel along with the concrete to shore up the footings and ensure they don't sink.
We had our footing inspections this afternoon and passed without any issue. So, not that trim is done, our carpenters will move on to building the porch and deck.
More pics next week as we start tiling and finish mechanicals on the interior and continue with deck/porch construction and landscaping on the exterior.
In the meantime, here's an update on the budget (click to enlarge):
How deep do you normally dig for footings? Here 4' is the minimum depth we go to get below the frost line. {Obviously winter freeze is not a problem in Atlanta}.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 237: DECKS, COUNTERTOPS, ETC...
The bulk of the painting is complete, the countertops are in, the bulk of the trim is completed, and the front and back decks are under construction. We'll be spending the next couple weeks focused on the finish work -- tile, flooring, etc.
How are you planning to finish the stairs? I cannot really tell from the pictures, but it looks like you have *real* treads with OSB risers. Are you planning to face the risers or cover the stairs with {shudder} carpet?
How are you planning to finish the stairs? I cannot really tell from the pictures, but it looks like you have *real* treads with OSB risers. Are you planning to face the risers or cover the stairs with {shudder} carpet?
We may regret the decision, but we're going with carpet on the stairs. This was a big topic of discussion a couple weeks ago between my partner and myself, and for lots of reasons (that involve not having the right contractors at the right time), we think it's the best decision...
I completely understand, we just made the same decision on a reno which presented us with an opportunity to replace a flight of "builder" stairs with hardwood, but time and resource availability saw us put in another set of "builder stairs" covered with carpet ... though we took a few steps to ensure we would be able to easily upgrade the stairs at a later time.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 246: STILL ROLLING...
It's been over a week since I posted on this thread...sorry about that!
In the past week, we've kept on moving along...trim is complete, tiling is complete, finish electrical is complete, and the front deck and back porches are near completion. We'll be starting hardwood installation later this week, working on finish pluming and then next week we should be substantially complete on the interior.
We still have some exterior decisions to make -- do we want a concrete or gravel driveway, should we remove the temporary power pole before or after final inspections (it's a couple hundred dollars more doing it beforehand), should we get the landscapers in now or at the very end, etc.
While we normally don't do this, given that we're getting late in the season, we plan to pre-list the property tonight or tomorrow, and hopefully start to get some traffic over the next week or so. Who knows, maybe we'll even get an offer.
Milwaukee, WI · Member since 2012 · 26 posts · 1 vote
13y
Exterior looks great. Seems to me you would want to have some of the hard wood down prior to showing people, but I understand the desire to get some people in there. Kitchen and balance of the finished work may be enough to generate offers now. Good luck.
Exterior looks great. Seems to me you would want to have some of the hard wood down prior to showing people, but I understand the desire to get some people in there. Kitchen and balance of the finished work may be enough to generate offers now. Good luck.
Agreed. We expect to have the hardwood installed by the end of the week (not finished). And don't expect to allow any showings until the weekend...
Are the metal bars on the A/C cage embedded in concrete in the ground?
I don't know exactly (I haven't seen it in person). But, discussing it with my partner a few months ago, it's definitely either welded closed or entrenched in concrete footers. Basically, it will require industrial tools to get it off (and yes, that includes when it needs to be replaced)...
Is the compressor unit blocking the steps to the deck? Can't tell from the pic!
Luis
Nope, not blocking, but it's pretty close. Unfortunately, we crept right up to the side setbacks, and placing the unit on the side of the house would have forced it to sit over the setbacks. This was the best option.