All Forum Posts by: Douglas Gratz

@J Scott yes but the point I am trying to make is. that everyone I have asked so far has given me a range similar to the above....not just builders...fellow investors...just about everyone who I thought could qualify to answer that question and it was at least 8 people ...I suppose thats the huge debate here, everyone is telling me my numbers are too low and im setting myself up for disaster where as everyone I asked doesn't come close to those #s.  You have to realize look up comps for anywhere n 2nst and poplar st 19123 or 636 n 3rd st, phila 19123....Its the location and city view that is the reason for the high sale price. Work in the city, want to walk, doctor, lawyer...its a house for them....So yes the finishes have to be nice but its more about the location....I wish I could have turned these two large lots in 4 conforming lots, but being that I am using hard money, I would need variances for build in garages (which takes 8 months) where as the way I subdivided was two larger homes that get parking by right...The comps speak for themselves....The home I will be building is on a lot 40x60 so will be 31x51 of house (side, frontage, backyard) 4 stories a basement and ROOF DECK with views you cant believe (you area 10 min walk from downtown) 5000 sqft that include basement and roof deck.....

Tell me I am wrong with those comps . I bought the land for $180 per 1 lot (4 adjacent lots, making one big rectangle)

@William Tidd I have asked over 8 builders what the cost per sqft would be for a house this size and ARV and the numbers were between $160-$180 so I used $180/swft in my calculations but they all said they cant really know until they see the blue prints. And everyone has it wrong on here, I am trying to learn. The budget will be made once I have the blue prints. I have my best estimate of costs

1)land purcahse

2) soft costs

3)construction 

4)loan interest

5)closing costs

6)sprinklers

7)elevator

8)transfer tax/taxes

and there are missing items which were answered earlier in this thread

and yes once I have plans I plan to do all that, but im not at that stage. we just finished the first iteration of the schematics, now my architect is working on the facade, and so on....but yes I do have a partner/cosultant he is a GC who has built many many homes.  He is retired at 60 so is not doing the work, but for 15% he is holding my hand which is why I am not as worried from everyone telling me to run, they seem to have the "why" of why I. am asking these questions wrong assuming I am asking because my consultant doesn't know when the "why" is for me to know because god forbid something happens to him.....

Its not you but people do not read well or I do not explain well and ill guess that latter, but yeah....

@J Scott I cant get bids until I have the blue prints but $300/400 is insane, the houses around here sell for $325-$450/sqft so I do not know where those figures come in at.  Everyone I showed the schematic too and showed the basic sqft of the house said it would cost $150-$180/sqft from building to finishes...

@Bruce Woodruff you must have mis understood my tone then because I was listening to all advice , you said my framing material calculation was wrong and I explained how I came up with those numbers, how do you come up with the correct framing material cost? and my consultant is a GC, and I guess the mis understanding is my GC knows what he is doing , but I am trying to learn what he knows so I can correctly make sure he is doing the right thing. Thats all

@Bruce Woodruff I was just trying to get a number without having the blue prints and if the first floor front wall is 30 feet wide then to frame that wall m thats 22 2x4 at $8 is$180 in wood not including the bottom pieces of wood and the top. where in my math am I wrong about that wall....The bottom part of hat wall would take (2)2x4x16 at $20 a piece thats $40 same fro the top so for that wall it would cost $260....I know at some places the wood is doubled up but where I going wrong here? I never said I was correct so no need for the smile face

@J Scott I was actually thinking of doing this because I Could not find anything.  This is great, thank you J Scott. Wish it were closer to know as materials from then to now, even pre covid are probably alot more now. 2x4x8 is $8.00 a piece and an LVL is $28 a piece....

But still great. When you say "bids' (framing , foundation etc)do you mean you called a bunch of different subs and got estimates or is there a way to post it and get bids in that sense, on some platform?

@Dan Thomas yes these delays can happen but if I prepare a head of time and can make sure to order things way early and make all the schedules fit for the step by step process. it will just be a matter of meticulously planning everything out, which I plan to do.  Once I have the blue prints I am going to purchase all the finishes and store them in my warehouse.  I am going to order as much as possible on day 1. Some things might change so I might have to order other sizes etc, but I can return the item I. bought  and so forth....

I know supply is my biggest issue and I can only hope lumber goes down a little by the time I break ground. I just sold a flip with a net profit of $125k I should be able to purchase the land without a loan which will allow me to wait as long as I want to break ground. And thats exactly what I will redoing, I will have all my ducks in a row first, I willl have all my orders or most orders in, dates when they will arrive and I will leave alot of room for time delays....

All I can do is work to reduce these uncontrollable factors that carry more risk so that I Can reduce that risk. The ROI is approx 30% . Whether I make this my first new construction project or I make a smaller cost investment my first, the learning curve is still steep. But I graduated 4.0 from college and have a very good ability to make sure deadlines are hit, a good ability in learning fast, and most of all I hired a consultant to guide me every step to make sure I dont miss a thing. We sit down daily planning this project to make up for all the covid risks, smaller demographic of buyers, etc......

But if 7/10 homes put up for sale between September and November sold before they were built or a day after, then so long as covid doesn't get worse I see the same thing (rates staying where they are at of course ) 

Instead of everyone telling me the risks I already know why not talk about ways to reduce it, what should be ordered first, what will be my biggest supply concerns, how should I tackle them etc etc...

I wont give up on my dream just because its insanely hard.  getting a 96 and above on every single assignment and test was insanely hard, but I did it....This project will set my business up in ways that would take me 10-15 years....That makes this worth the risk

@Danielle Jackson I do have a consultant who is going to guide me the whole way so I am learning as much as I can as to not have to rely on him or to be able to believe in what he says, he has done 15 new constructs in the area I will be building. So I am not alone here.And I actually know alot, I have been a project manager on 3 new construction properties...I am just trying to back up the things I know to make sure im not missing things you know. People are on here saying woah you have no experience, and that is not the case at all.

@Bruce Woodruff check my math but give or take a few walls I have the cost of lumber including LVLS for this floor to be $4,200 give or take? 2x4x8 are $8.00 and LVL 2x4x8 are $28 each

@Bruce Woodruff andI mean nothing bad about being discouraging I mean you are speaking truths but still, everything carries risk and things that have large returns carry more risk.  Covid era, housing crash era, there will always be something going on