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!
Contractor · washington, Washington D.C. · Member since 2011 · 204 posts · 64 votes
12y
How are you doing Mr. J .Scott and I thank you for you sharing and showing us a new area were you are going into on new construction in ATL area, takes balls to do any new business venture because of a lot of unknows. I am a contractor for 15 years and I got both of your books off Amazon estimating rehab and flipping houses and I do estimates for a living and the book has shown me a few moves to save money and the flip book is great read and a must have. Me and my family may be in the ATl area in Dec on vacation and hope to one day meet you in person or grab a quick lunch with you.I read your post and stay on your site look forward to meeting you one day ,I am sure alot of my BP family is looking at this project and great to see all the phases with you . Wish you luck. Ahmed of Elite Development
I am a contractor for 15 years and I got both of your books off Amazon estimating rehab and flipping houses and I do estimates for a living and the book has shown me a few moves to save money and the flip book is great read and a must have. Me and my family may be in the ATl area in Dec on vacation and hope to one day meet you in person or grab a quick lunch with you.
Thanks for the kind words, Ahmed!
Btw, I no longer live in Atlanta...I'm actually in Maryland now, so I'm not too far from you...shoot me a private email and let's grab lunch one day...
@J Scott / @Ahmed Porter Are you attending any REIAs in the DMV area? I There are a few and my wife and I are looking to nail down one.
I just attended my first one last week -- the BWI Investors Meetup. It was certainly one of the best REIA meetings I've ever been to -- no sales pitches and some great educational material.
Wow, I just realized I haven't updated this thread in a while!
Quick answer is no, we don't have a contract yet. But, I expect to have a better update in the next 24 hours, and will post a formal update later today...
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
12y
Just curious what your process is to keep the house looking good while it's for sale. Does someone go there to make sure lazy agents locked doors and turned lights off? Do you have someone clean it periodically? Outside maintenance? Cost?
Just curious what your process is to keep the house looking good while it's for sale. Does someone go there to make sure lazy agents locked doors and turned lights off? Do you have someone clean it periodically? Outside maintenance? Cost?
Hey Rob,
Both my partner and I have full time project managers who are responsible for this type of work on our listed projects. So, someone is out there at least once a week to check on the property, make sure it's clean, make sure none of the light bulbs have burned out, etc. Any issues, they can bring in cleaners or contractors to do what's necessary.
In this property, we've had a decent amount of foot traffic, so the bulk of the cleaning has just been dusting and cleaning the floors. No major issues so far...
Real Estate Investor · Lincoln, NE · Member since 2013 · 584 posts · 353 votes
12y
Wow, what an awesome thread! I've actually been eyeing a dilapidated house for a couple of months and thinking about doing exactly this. Now I'll have a lot more to think about to help that decision.
Kudos to you @J Scott for manning up and doing this live before you had any idea if it would be a winner. That took guts. Thanks for your willingness to share with the community and for the total transparency.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
12y
DAY 338: FIRST OFFER / CONTRACT
We've had a lot of traffic the past week on this property, so we were fairly confident we were close to an offer (as I mentioned, there's been no negative comments about the price). Well, we received our first offer this morning, and it was decent. We countered at full-price and our choice of closing attorney, and agreed to the rest of the terms.
The buyers accepted our offer this afternoon. Inspections are set for this weekend, and buyers are scheduled to close at the end of the month (they really want to close the deal before the new year so they can get their homestead exemption). It's a conventional loan, so I think it may be tight, but the agent says that the mortgage broker isn't concerned a bit. I guess we'll see.
Fantastic news. Beers for the New Year's celebration is on J Scott.
When it comes to selling houses, I don't celebrate until the paperwork is signed (and the check clears :)...
I hear you loud & clear sir.
I had a property that was short sale approved for $227k. I brought in the cash to close only to realize on the closing date that the title company couldn't get the final HUD-1 approved by the short sale negotiator. A couple days later, I found out the loan was sold to another lender. So the short sale process was started again. Unfortunate for the seller, they had already moved out and rented elsewhere.
Another 4 months of waiting and the new lender recently countered $360k. We went back at $275k. They wouldn't budge so we walked. I've lost 4 short sale deals like this with 6 figures spread YTD. Fortunate, I was able to close on 5 so not all was lost.
Attorney · Brookhaven, GA · Member since 2013 · 23 posts · 26 votes
12y
Just read this entire 'tale' and it's amazing anything (e.g. construction) happens in ATL at all! (maybe the bureaucracy gives some insight as to why the Braves are moving out to the 'burbs... just saying...). Kudos on all the posts and it's impressive how you have shared all the details (as always). Any progress with your own home in MD?
Just read this entire 'tale' and it's amazing anything (e.g. construction) happens in ATL at all! (maybe the bureaucracy gives some insight as to why the Braves are moving out to the 'burbs... just saying...). Kudos on all the posts and it's impressive how you have shared all the details (as always). Any progress with your own home in MD?
Bo! About time you stopped by BiggerPockets...we need more great closing attorneys on this site...and you're the best! :-)
Maryland appears to have even more bureaucracy than Atlanta, if you can believe that. We're still about 4 months away from permits and demo... :-(
Architect · Mount Vernon, NY · Member since 2013 · 54 posts · 17 votes
12y
I just want to thank @J Scott for his time and effort to share his story. It took me several days to read thru all, and I am that much smarter now.
I've been doing architecture and construction for past 12 years, but I've never done ground up. I can certainly appreciate you sharing your journey. Good luck on closing. Thank you.
Specialist · Denver, CO · Member since 2012 · 52 posts · 6 votes
12y
Thanks J for your passion and social media transparency...Crushing It as Gary Vaynerchuk would say! Successful infill builders inside Nashville's beltway are coming in at $75/ft. I appreciate the comparison with Atlanta. Cheers!
Schenectady, NY · Member since 2013 · 1 post · 0 votes
12y
Great forum. I have been in the buy and hold arena in New York for the past 10 years, one of the best open forums I have seen to date. Keep the American Dream flowing!!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
12y
DAY 345: INSPECTIONS COMPLETED
The buyers completed their inspections last weekend, and the inspection report was short and clean. There were a bunch of little items -- paint touch-ups, windows painted shut, some caulking needed, some debris in the back yard, a light not working, etc -- and only one major item.
The major item is actually a bit perplexing. There is a LOT of water in the crawl space and we can't figure out where it's coming from. We've had a couple water-proofing companies take a look, and they assure us it's not coming through the foundation walls (grading is correct) and is not likely coming under the footers (drainage is good). As crazy as it seems, it appears the most likely explanation is that the water has been there since the foundation was poured back in June.
Right after the foundation was poured, there was a ridiculous amount of rain for about two weeks (I think there are some pictures of this earlier in the thread), and we just assumed the water would either drain out or be absorbed into the ground. Well, the soil under the house is mostly clay, so it's quite possible that the water couldn't be absorbed and just sat there for the past 6 months. Crazy that nobody noticed (or noticed and didn't say anything), but right now, that seems like the best explanation.
Anyway, my partner has spent the past couple days pumping out the bulk of the water, using a shop-vac on what's left and then putting a couple dehumidifiers in there. Once the crawl is dry, we'll have to wait until the next rain to determine if there's a water intrusion problem or if it really was just wet from several months ago.
We're completing the rest of the inspection repairs over the next week, and hopefully the appraisal will be scheduled some time in the next week or so, as the buyer still really wants to be into the house before the end of the year.
Investor · Winston Salem, NC · Member since 2013 · 93 posts · 25 votes
12y
@J Scott I guess as the saying goes...."if it were easy everyone would be doing it". Keep up the good work. I will stayed tuned to see the resolution. It seems right now that the buyers are playing ball which is good.
@J Scott I guess as the saying goes...."if it were easy everyone would be doing it". Keep up the good work. I will stayed tuned to see the resolution. It seems right now that the buyers are playing ball which is good.
According the to the buyers' agent, the buyers are thrilled. They love the house, they weren't concerned about the inspection findings (though they obviously want the water issue resolved) and they're looking forward to closing.
It's always nice when buyers seem genuinely excited as opposed to looking for every opportunity to negotiate and nitpick...