Post Frame Home Construction

[David Beard]

I was curious if anyone out there has had experience with both the construction and/or economics of building new pole barn homes in rural areas that are within commuting distance of a sizable metro area.

I have been approached with a JV business proposition from a trustworthy and experienced channel. The idea is to build 1500-2000 sf pole barn homes on 2-3 acre parcels. These can be constructed for about $40/sf (including environmentally friendly septic), with the lot purchase/prep running about $20k. So we would be all-in on a 1500sf home for around $85k, with exit price of $125k. This area is within easy commuting range (via interstate) of metro employment areas, while being very appealing to those favoring rural living, and there is very little housing available in this price range in the area.

They tell me that this type of home can be financed conventionally (still need to verify this), and we'd create our own comps after it got rolling. Lot costs could potentially be pushed down if land acquired in larger parcels, with homes constructed on contiguous lots. The homes are built with high energy efficiency (I'm going to look at a model tomorrow) and radiant flooring. The homes can be constructed in 45 days, and buyers pre-qualified preferably, so the turnaround time would be theoretically very swift.

Anyone done this type of thing, or can poke holes in it? The model home will be on the market soon, so I'll hopefully get some proof of concept based on how much demand they get from buyers.

[David Beard]

We're getting into all kinds of non-traditional construction, which is great. Post frame homes are not "barn style", however, particularly when done as one-level ranches, and are not steel buildings, and are not "post and beam" structures.

I was just able to finally check this out. I met with the framer for these homes, and he can erect the structures in less than a week, which includes all windows and doors, so basically the home looks finished on the outside at that point. The interior can be done in 4-6 weeks, depending on floor plan and finishes, etc. So there is an extremely quick build time with these.

The preferred method appears to be to set pre-cast concrete posts in the ground, then attach wood posts to these above ground level. These posts support the trusses and frame. The slab can actually be poured after the structure is in place.

Incidentally, I would have preferred to have named the post Post Frame Home Construction.

Financial:

* Targeted profit margin = 18-20% of sales (about average profit margin for new residential construction)

* Time to build = 45-60 days (hard to believe, I know, but the builder has done it multiple times); this velocity is how ROI is maximized

* Thus investment capital can be turned 4 times per year.

* Buyers are pre-screened, so 2-3 mths from start of build to final close (2 mths for FHA or Fannie financing, 3 mths for USDA financing, which has an extra underwriting step)

* Many buyers can utilize zero down USDA financing in targeted rural areas, and can have household income up to 82k for families up to 4, and 100k for families of 5 (income limits for our area)

* Targeted sales prices for various models will be $135-170k.

* Material costs can be driven down substantially when building at volume (such as 20-35% savings, per builder), so achieving scale is critical to maximizing overall profit margins

* Build for 20-30% less than traditional stick-built

* Scarcity of homes in the $135-170k range are expected to lead to high demand, per numerous realtors, particularly for new construction on 2 acres of land

* These rural counties typically require at least 1 acre when building. Septic installation is a considerable expense, running $9-14k depending on need for a pump, etc. Each site needs an appropriate secondary backup area as well for septic.

Building advantages:

• Substantial savings vs continuously poured foundation
• Much less framing material needed due to post frame design
• Large wall cavities permit insulation of R30-R40 in the walls and R50-R60 in the ceiling
• Radiant flooring can be economically installed
• Leads to very high energy efficiency with utility savings of 20-40%
• Conservation of building material, reduced energy usage, and minimized disturbance of soil all contribute to "green" aspect
• Very rapid build time of 45-60 days
• Can build through winter with no issues (slab can readily be poured inside framed home)
• Metal roofs are highly resistant to hail damage, and insurance cost is normally less
• Exterior is 100% maintenance free and will last for decades
• Structure design has very high resistance to damage from wind, seismic, and snow loads (superior to stick-built)
• Free-span structure facilitates open interior spaces, cathedral ceilings, and stylish lofts
• Exterior can be accented with stone, brick, and other materials
• Stylistic external use of masonry accents, dormers, gables, and waitscoting provides attractive appearance
• Maintenance free aspects and one-level living could be very appealing to seniors who are downsizing, particularly in structured communities with some common walking areas or other inexpensive amenities.

So there's some more color. I'll update as things progress.

[Jon Klaus]

Great info, David. I'm interested in exploring this method in TX.

[Bryce Y.]

This is an interesting concept. Maybe I'm missing something, but why is this model limited to rural areas with large lot sizes? The foundation and framing seem to be the 2 biggest areas of cost savings, plus you could use city water and sewer rather than septic...

I would think most of the future buyers would have farm animals. Would it be advantageous to build facilities to accommodate them?

[David Beard]

Just a quick update. We are under contract to purchase a beautiful 29.1 acre bank REO parcel for about $3,500/acre, and Planning & Zoning will allow us to build 8 homes. So the buyers will reside on beautiful 3+ acre homesites, with almost everyone having some wooded area.

Planning to be all-in in the 60's/SF, and sell for $110-115/SF, including full radiant flooring systems and extremely high R-factors in walls and ceilings. Everything looks promising on topo (these homes need pretty level sites), water connections, septic suitability, and specifications for the lane running into the property.

We expect to build additional structures for the buyers as well, @Bryce Y. The rural areas works very well for us due to the availability of land and the ability to readily create sales volume without the need to hunt down rehab deals constantly in the (sub)urban areas (though we expect to continue with that as well).

We plan to begin construction of two homes in mid-January, and all indications suggest that we will have buyers already in place. Build time is 45-60 days with simultaneous underwriting of buyers, so we expect to cycle investment funds in 90 days, sales prices of $150-190k. After we compete the first two, and demand is there, we will probably build out the remaining six simultaneously, then begin marketing and canvassing for additional property.

[Pat L.]

@David Beard

thanks for the candid update. I will enjoy following your project.

Now given the cost of the land, roads & ancillary services etc it will be interesting to see the final cost/sq ft. My guesstimate is at least $10-$12k per footprint before construction :)

[Michaela G.]

I wished Sears would still be selling their beautiful Victorian house kits for a few thousand $. Yep, life-sized Victorian homes, with all the bells and whistles. You'd order them and then you'll have to put it together

http://www.searsarchives.com/homes/history.htm

[David Beard]

Thanks for the comment, @Michaela G. !?, but we most definitely are not building "kit houses". These are full builds on-site, meet or surpass code, have super energy efficiency and greater structure strength and wind resistance than stick built.

[Sean H.]

@David Beard Are there any specifications a contractor has to have to put up these types of homes or can any GC do it? There have been a lot of links floating around in the thread, linking to different manufacturers and even different styles of homes. Can you comment on which manufacturer you have been looking at specifically?

[Mark Bradford]

This has been a great read. So with the costs of small clusters of homes in the county do to the zoning and septic costs.... I'm wondering about bring the idea in town. Some have talked about this a little. I'm trying to decide. If you have an older small town feel and you place a "strip" style "row" houses connected at garages pole building style with metal exterior how will this look? I'm wanting to do more of a modern look with muti level slant roof designs. Will this look be excepted in small towns? Any thoughts? I hate to build something that the community feels is out of place.

[Pat L.]

@David Beard

just saw this & thought you may be interested esp the price

http://buffalo.craigslist.org/reo/4224877330.html

[Rob K.]

This is all very interesting. Thanks for posting!

Are these homes built with 8x8 timbers like a pole barn?

When you say radiant floors, are you talking about radiant heating in the concrete floor? If so, how is the upstairs heated?

Does that mean there won't be any air conditioning?

Will it be a tough sell without a basement?

[David Beard]

@Sean H. - I do think a typical GC could finish out the interior, but erecting the shell is pretty specialized and typically done by companies that do nothing but post frame construction. The company we're working with does well over 100 post frame structures per year. I'm not sure what you mean by "manufacturer". At least to me, that infers modularized building of some sort, which these are not. Our builder primarily operates in a 150 mile radius of southeast Indiana, as far as I understand.

[David Beard]

Originally posted by Rob K:
This is all very interesting. Thanks for posting!

Are these homes built with 8x8 timbers like a pole barn?

When you say radiant floors, are you talking about radiant heating in the concrete floor? If so, how is the upstairs heated?

Does that mean there won't be any air conditioning?

Will it be a tough sell without a basement?

Hi Rob, 6x6 posts are set around the perimeter, precast concrete below ground level, wood posts attached above ground level. Yes, radiant heat in the floors including garage area. We will still have furnace and central air, though the furnace sizing may be reduced from norm due to the radiant heat, not sure at this point.

We've discussed the basement issue at length. We plan to have two car garages with radiant heat, and most will have a detached garage structure of some sort, some buyers adding right away, others adding later. Attic space will be available as well. We are also doing the numbers on how much cost is added with a basement, and may perhaps make this an optional upgrade for pre-solds. Of course, in many areas of the country, basements are rare, but certainly they are common in our area.

[Sean H.]

@David Beard Thanks for the update. With all of the commentary on different building options, I didn't really understand how post and beam was different from a kit home, but now I grasp the basics.

One last question, how are you lining up buyers for these homes? You indicate a healthy demand. Are these coming from agents?

[Sean H.]

@David Beard How has this project been advancing?

[Emilio Ramirez]

Old thread, but wondering if David or anyone else moved forward on a Post Frame Project. The biggest concern I would have is heaving. (depends on your region) Foundations typically are required to circle the building footprint to the frostline. Additionally they have to be insulated. This keeps the frost out of the soil beneath the slab on grade and prevents the freeze/thaw cycle that could wreak havoc on a finished interior space. 

I know an alternate detail is to put continuous insulation horizontally from the building buried at a depth of 18-24" and out a considerable distance (maybe 10'). Not sure how successful that details. Anyone have more insight on this process?

[Kurt F.]

I'd be interested where this all went as well...  

If the post frame project went forward, I'd be very in final SF costs (versus originally projected), and also building envelope details.

Many of the posts have building types and terminologies and attributes all mixed up -- post frame, post and beam, pre-engineered, modular, manufactured, etc. -

Also, there was a list of post frame advantages posted somewhere about mid-thread.  I know the OP was just checking out some of available online info on post frames, but I'd be a little careful in any case with that list.  Many of the items aren't quite facts, so the list seems somewhere between extremely optimistic and a sales pitch.

[Sherri Martinez]

@David Beard It's been three years since you posted about buying land and you had six houses you were going to build. I am sure they have been built by now, do you have photos and updates? Would LOVE to see them!

@ Kurt F You said some of the things on the list weren't quite facts, but seemed like a sales pitch, can you update the list to make it more "Actual?"

THANKS!!

[Andrew Huffman]

@David Beard

Any updates on this, sir? My wife and I are seeking bids to have our home built using post-frame construction right now. If the process bodes well for us financially, we are hoping to use it as a platform for development. Possibly a smaller scale subdivision with houses in the 1000 sq-ft to 1500 sq-ft range sitting on 1/2 to 1 acre lots. Or perhaps smaller MFR's on shared lots, almost with a cabin feel.

[Craig Heffernan]

Awesome post on <b><a href="https://www.youtube.com/watch?v=uhlOPUFD030">frame home construction</a></b>. Thanks for sharing.

[Jonathan Landry]

@David Beard would you mind delving a bit further into “the energy efficient” construction? Are they rated homes or will you be using elevated levels of insulation and labeling it energy efficient? Very interesting concept vs stick built.

[Gilbert Dominguez]

The homes look beautiful There is also a new system out that incinerates the waste so that there is no dealing with a septic system. A small pump located just behind the toilets pumps all black water and/or grey water from sinks and tubs into a storage tank within a room of 8 X 10 where the incinerator is located as well. The system comes with a timer or a mechanism to run on automatic when there is enough or a certain amount of waste material to burn. Then you simply empty the ashes out and dump them out with the regualar trash no bio material left to contaminate anything or any infectious material left over as well. Still a person might want to wear gloves and a dusk mask but that is about it, and you only need to empty the thing out about once per month if that much but you might want to do some research on this product as the entire system will run you about $15K. I found this system to work great when there is difficulty with ground perk tests which can take a long time to resolve with your municipality. 

[Ryan Zaninovich]

@David Beard Hi David, I know a few people have asked for an update to this project without success but I thought I would throw my hat in the ring. Did any of this come to fruition? If not could you tell us why and if it did we would all love an update I am sure!

[Tiffany Bottinelli]

Did anyone find what kind of financing would work for this? Could it be resold with traditional financing?