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!
Atlanta, GA · Member since 2013 · 11 posts · 2 votes
12y
J,
Thanks for the answer. I figured that might be hard to estimate. It looks like your $/sf for the quality of work is incredible. I'll keep an eye out for your next project!
Investor · Lakewood Ranch F · Member since 2013 · 79 posts · 11 votes
12y
J, Just wanted to say THANK YOU for spending your time and energy documenting and providing all this information. I can't even imagine how much money your saving existing and future investors. Thanks again.
Real Estate Agent · Cranford, NJ · Member since 2011 · 149 posts · 54 votes
12y
Congratulations J Scott !! Thanks so much for sharing this journey. I'm sure it was time consuming to keep the posts going in addition to managing your daily projects.
This is what makes BP the best real estate investor site in the world - fellow investors like you who are generous with their time, expertise and guidance and not afraid to show a peek behind the curtain of successful deals. Bravo!
[b]DAY 44: 10 EXTRA DAYS BEFORE DEMO[/b]
The demo permit application was submitted about two weeks ago and we’re still waiting for permit approval to move forward with the demo. I found out today (my partner apparently knew this, but I didn’t)
Communication between partners....how did this factor out in the build? Did you both learn new ways to communicate? Or did this strain the relationship?
[b]DAY 44: 10 EXTRA DAYS BEFORE DEMO[/b]
The demo permit application was submitted about two weeks ago and we’re still waiting for permit approval to move forward with the demo. I found out today (my partner apparently knew this, but I didn’t)
Communication between partners....how did this factor out in the build? Did you both learn new ways to communicate? Or did this strain the relationship?
My partner on this project and I get along absolutely perfectly, so it was never an issue. We did a good job of breaking the project into components, where he was responsible for certain things and I was responsible for certain things. He stayed on top of his stuff and I stayed on top of mine, and while there was certainly stuff that we each didn't know about going on, we always knew the stuff that pertained to our role.
Investor · Diamond Bar, CA · Member since 2012 · 79 posts · 24 votes
12y
@J Scott,
I read the book that Josh published recently - that was a really cool document. It's convenient to digest a year long experience in one day. I was recently considering building a house and the book was really helpful for me to understand the budget and timeline. I was wondering about hookups - that an area that I still don't know how to guess in terms of budget. In your situation there was a previous house on the lot so you probably already had a water meter, gas and sewer line, correct? Any idea how to estimate those costs when you are building on a new lot, assuming it's on a street that has power, gas, water and sewer at the street or alley?
Rental Property Investor · Annapolis, MD · Member since 2014 · 214 posts · 140 votes
12y
Scott,
Wow what an educational thread! I had learned a lot, just by reading posts!
I am a "buy and hold" and "buy fix-up and hold" guy out of Annapolis but have rental units around Ft Meade area. I saw you had moved here recently. May be one o these days if you have time we could meet-up, grab lunch or cafee? Regards
Val
Scott,
Wow what an educational thread! I had learned a lot, just by reading posts! I am a "buy and hold" and "buy fix-up and hold" guy out of Annapolis but have rental units around Ft Meade area. I saw you had moved here recently. May be one o these days if you have time we could meet-up, grab lunch or cafee? Regards Val
Investor · Sacramento, CA · Member since 2014 · 308 posts · 94 votes
12y
Long read but worth every minute, thank you not only to J Scott but everyone that chimed in with words of wisdom and nuggets of advice. Big thanks to everyone that put in their time for this thread.
Investor · Plano, TX · Member since 2013 · 89 posts · 27 votes
12y
@J Scott@Joshua D. What an amazing thread! Thanks for going through all the trouble to make this content accessible to newbie's like me. This is PHD level stuff and I am blown away by your willingness to help others. Keep it up!
@J Scott@Joshua D. What an amazing thread! Thanks for going through all the trouble to make this content accessible to newbie's like me. This is PHD level stuff and I am blown away by your willingness to help others. Keep it up!
Hey James - You may be interested in this thread as well:
Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
10y
@J Scott this was a great read probably one of the most thorough educational pieces I have seen in the industry by far! It helped reinforce my confidences as I could pick out several issues you would encounter before you seen them coming. And brought awareness to a few things I would have over looked. It has persuade me to purchase the Book on Flipping Houses. I look forward to completing it and I look forward to see what you do in the future.
Safford, AZ · Member since 2016 · 6 posts · 1 vote
10y
I sat and read this entire thread. All I can say is WOW. I think will just try to acquire some rentals that need moderate repairs for the time being. It was very informative, and it shows an amazing amount of humility to just lay it all out there....even the not so good. Thank you so much for the time & attention you put into this post.
I have to ask though...the crooked tree in the pictures on CD0 construction day zero) in the neighbors yard, does that not bother anyone else, or am I the only one who noticed it? :D
Next, here is the final budget breakdown -- we were about $5300 over our original estimate, but given that we added nearly 700 square feet to the design after that budget was created, I'm thrilled about our final budget numbers. Ultimately, our costs for demo and construction were right about $60/square foot (CLICK TO ENLARGE):
Finally, here is our final overall analysis, with our total profit, split between my partner and myself -- this represents about 32% ROI, and given that it took almost exactly a year to complete, that would be an annualized 32% ROI as well:
@J Scott - First thanks for posting this diary! I was trying to find a link to your final budget, which appears to have been removed in your "FINAL ANALYSIS" post. Do you mind providing that link? Thanks again!
Property Manager · Virgin Gorda, BVI · Member since 2018 · 5 posts · 1 vote
7y
@jScott Thank you for the Ebook and your openness to share your experieces! I found it extremely informative. Do you have any other recommendations for ebooks or diaries similar to yours?
I'm starting my first new construction project for my new home in Georgia.