🧐 Ever wonder what it takes to build a new construction home?
👋🏽 This email might help clear it up for you.
Livin' La Vida Luna y Luca
🤗 So. Many. Hugs
We're still in the pre-construction stage of my very first new construction project.
It's early days, but I think it's safe to say we're going over time and over budget.
I originally expected this project to be completed by 12/31/22 and for it to cost $525,000.
Now I'm expecting it's going to take until 2/28/23 and going to cost closer to $575,000.
We bought the property in December 2021, but we inherited tenants. They didn't leave until March 2022.
This was actually a welcomed obstacle. The tenants paid their rent on time and subsidized my holding costs while I developed the plans.
It's been 6 months since the tenants left and we're just now ordering the superior walls foundation and selecting our framing team.
As far as the budget is concerned...
Here's a high-level look at what we've spent money on so far, from lowest to highest.
- $3,000 - Soil Testing
- $6,000 - Surveyor
- $6,100 - Permits & Inspections
- $7,500 - Architect
- $4,000 - Insurance (GL + Builder's Risk)
- $9,000 - Property Taxes
- $17,000 - Mortgage Interest
- $750 - 2022 iPad Air w/ M1 Chip 😇
- $34,250 - Windows (Anderson 400 Series)
Subtotal - $35,000
- $6,400 - Tree Removal
- $8,000 - Dirt Removal
- $12,200 - Drywell & Drainage
- $16,900 - Excavation + Misc. Sitework
- $19,500 - Demolition (house + driveway)
Grand Total: $150,600 😅
There you have it. And honestly, this isn't even everything.
These are mainly the expenses that came out to $1,000 or more. There are plenty of sub-thousand-dollar transactions that I'm not including.
Room For Improvement?
I went through the costs line by line and tried to see where we could have saved some money.
We sourced 2-3 bids for each subcontractor so I honestly don't think we could have cut costs in a meaningful way in terms of materials or services provided.
As always, the biggest opportunity for improvement was the speed at which I executed.
We've spent ~$30,000 on carrying costs (taxes, interest, insurance) since closing ~9 months ago. At $3.3K per month, every day basically costs $110 whether we make progress or not.
If I was more decisive about the floorplan and hustled harder to tackle the inspections and permitting tasks when we first bought the property, we would have hit the ground running in March when the tenants vacated the property.
Lesson learned: From here on out it's a sprint to the finish line.
Here's what the site looked like as of September 1st, 2022.
I expect there to be a fully framed, roofed, and wrapped house standing here in the next 60 days.
Stay tuned for the November 1 update, if not sooner. 💪🏽