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 Jon Klaus:
Good price for a full topo survey. Will you need another as built survey at completion? You might negotiate that now with this company.
I'll touch on it over the next many updates, but there are a lot of things required on the site survey that I didn't know about at this point...and apparently neither did my surveyor, who until this point hasn't ever done the type of survey in the City of Atlanta municipality... :)
I *believe* the only as-built survey is the "proposed as-built" that needs to be submitted with the demo permit application and with the building permit. I don't believe we will need any additional surveys after construction (if I interpreted your question correctly).
Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
13y
Originally posted by J Scott:
I *believe* the only as-built survey is the "proposed as-built" that needs to be submitted with the demo permit application and with the building permit. I don't believe we will need any additional surveys after construction (if I interpreted your question correctly).
We're required to do a final survey before a CO can be issued. This will show exact house location, ac pads, fencing, etc. Might want to verify that and save a few bucks with the surveyor if possible.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Steve K:
We're required to do a final survey before a CO can be issued. This will show exact house location, ac pads, fencing, etc. Might want to verify that and save a few bucks with the surveyor if possible.
Thanks, Jon Klaus and Steve K!
I didn't realize that a new survey would be required for the C.O. I've added this to the my list of tasks and will incorporate it into the budget -- the surveyor is already doing way more more for the $650 than we (or he) expected, so we'll negotiate the final survey later when hopefully he's forgotten how much free work he's already done for us... :)
Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
13y
Might also want to check and see if you'll need an elevation certificate as well, especially if you're in or near any sort of flood zone. If so they're usually around $200.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Steve K:
Might also want to check and see if you'll need an elevation certificate as well, especially if you're in or near any sort of flood zone. If so they're usually around $200.
Definitely not in a flood zone (according to the surveyor), but worth asking the building department if this is something we'll need...thanks!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 22: INITIAL FLOORPLAN
Our architect sent us the first draft of the floorplan based on our discussions. We had originally discussed building a 2000 square foot house, but the architect suggested that we should make the second floor as large as possible and provided a plan that was nearly 2700 square feet.
We originally planned to limit the second floor to half the size of the first floor, thus reducing framing, sheetrock, flooring, painting and roof costs. We’ll probably settle somewhere in the middle. The extra space is great, but we don’t believe that the resale value will increase as much as the costs will increase for anything over 2200 square feet or so.
We'll likely remove the bump-outs from the second story (the dormers) to reduce costs a bit (framing and roof), leaving a second floor that's a bit smaller but nearly full size.
Here are the initial floorplans (click images to enlarge):
Flipper/Rehabber · Pittsburgh, PA · Member since 2010 · 224 posts · 75 votes
13y
J Scott Love the thread and will be following closely.
However, I think that it shows two features are needed here on the site. Joshua Dorkin, am I the only one who would like a "sticky" and "view first unread" feature?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 25: INITIAL SURVEY
Our surveyor sent us a first draft of the survey, but it needed some additional information on the proposed layout of the new property before he could complete it. I sent him the information he requested and hopefully we’ll have a final survey in the next day or two. Once we have a final survey, our demo guys can submit everything for the demo permit, which will likely take about two weeks to get approved.
Here's a link to the Initial Survey (I've redacted the address information for the property):
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
13y
j looks great..a few quick thoughts. we have a few infill areas in charlotte where I do business. I imagine it's very similar to the area you're working. It's very popular for younger couples and families. They all want the back deck and entertaining space. is that not a big factor in your area? I'd really push for the kitchen opening to a back deck, even if it means having the master on the 2nd floor. Of course, this is more geared towards my market, and i'm only assuming we have similar clientele. You know your buyers better than I do. Also, I'd try to add a coat closet near the front. Is there enough headroom to fit one under the stairs? Other than that, I think it looks great :)
whoops: one more thing I just noticed. I'm sure your plans are finalized, and i'd ask realtors (and the wifey) their opinion, but I'd try hard to get a bathtub on the first floor. For a younger family with one child, who may or may not occupy the downstairs bedroom, it'd be nice to have a bathtub for bathing on the main level. Just my opinion, and I'm sure others may think differently :)
Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votes
13y
J Scott J thanks for the case study and being transparent with this process. I find it very interesting and educaitonal.
On a side note, did you decide to pursue this path because of opporunity or are you developing a new component of your business? Are you looking to get into more new construction and eventually into full blown development? Just curious if you see this as the next step from a business strategy standpoint.
Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes
13y
J Scott, thank you for starting this thread! And, even bigger thanks for sending out the 123Flip newsletter with the link back here for the case study. I've been away from BP for a long time just doing my own REI thing, minding my own business. However, this thread is perfect timing for me since I just bought a vacant lot three weeks ago in an upper-scale neighborhood. I'm nervous to go down the path of this new territory, but something I am excited to venture into. Your thread and open discussions are right up my ally!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Bryan A.:
They all want the back deck and entertaining space. is that not a big factor in your area? I'd really push for the kitchen opening to a back deck, even if it means having the master on the 2nd floor.
Unfortunately, we've worked through the design several different ways, and moving the kitchen to the back of the house means that you either have to move all the bedrooms up to the second floor or you have to go around a bedroom from the front door to get to the kitchen (or you need to have a small kitchen in the back corner of the house). None of the "kitchen at the back of the house" options worked very well.
Just a limitation of the lot and the shape of the house, unfortunately (and probably a limitation on our design skills, as well :)...
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Derek Tyler:
On a side note, did you decide to pursue this path because of opporunity or are you developing a new component of your business? Are you looking to get into more new construction and eventually into full blown development? Just curious if you see this as the next step from a business strategy standpoint.
I've always wanted to get into building and development, and this is just a natural progression in that direction. We would have started sooner, but the market just hasn't supported new construction over the past few years.
Hopefully we'll be doing a lot more of this in the future!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 28: SETBACK ISSUE
The surveyor sent us the two final site/survey documents (Demo Plan and Proposed Building Plan). Unfortunately, the big thing the survey revealed was that after the house was originally built, the city changed the zoning to require a 35 foot setback from the street (a "setback" is the minimum distance the property can sit from the street or a boundary line, based on the local zoning regulations).
But, the house only only sits about 22 feet back from the street (zoning was not in place when the house was built). In theory, we’d need to move the house another 12 feet away from the street, but given that we want to save the existing foundation, that would add a tremendous amount of work and expense. Instead, we’ll be asking the city for a variance (i.e., asking them to make an exception) to allow us to keep the front of the structure where it was originally built.
Rehabber · Norfolk, VA · Member since 2012 · 38 posts · 27 votes
13y
J Scott I'm not sure how it works in your locale J, but I've found that in my city they also allow you to use the conforming average of the setbacks of the houses to your immediate left and right.
I don't see why they would have an issue with the variance however, but if not it might be worth it to ask about using the average of setbacks and see if they have something like that in the codebook.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by John Espinosa:
J Scott I'm not sure how it works in your locale J, but I've found that in my city they also allow you to use the conforming average of the setbacks of the houses to your immediate left and right.
Yup...you're absolutely correct...and that's what we end up doing...stay tuned... :)
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 29: DEMO PERMIT SUBMITTED
The demo company submitted the application and site plans for the demo work. According to the city, we should expect it to take 1-2 weeks before the permit is issued, assuming they don't have any issues.
In the meantime, we're still working to finish up our architectural drawings and starting to get bids on some of the work.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 44: 10 EXTRA DAYS BEFORE DEMO
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) that once the permit is granted, we’ll have to post our intentions to demo the property publicly for 10 days before we can actually do the demo.
So, at this point, if we get the demo permit in the next few days, we're looking at actually starting demo sometime around Day 55-60.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
DAY 56: DEMO PERMIT IN HAND
Wow...it’s been a LONG wait (nearly 4 weeks), but we finally got our Demo Permit issued today. As I mentioned in my last update, we now have to wait 10 days before we can demo the house.
Isle Of Palms, SC · Member since 2013 · 38 posts · 18 votes
13y
Hey J Scott, I'm a new member at BP and wannabe investor. Thanks for putting this all up, its a really cool thread. I hope to get into development myself, once I get my feet wet on some renovation projects.
Can't wait to see where this all goes.