first brand new home construction, personally

[Emily Dixon]

yes, I have worked in home building for many many years(AT A DESK HEHEHEHE). I know the drill. I have a mean schedule and an awesome labor force.
But I can't help being very excited to be finally building my first house as a project manager. We are in escrow, ends in 7 days. Plans being worked up by my awesome and talented dad the general contractor. (I got to design it as well) Permit processes will be 6-8 weeks and building time 40 days.

We have other projects going on as well but this will be my very first brand new home construction on my own. My husband is very busy with his own work, but has helped me with my scheduling and such, and he is excited for me (and a little jealous too). I actually have to use a different plumber (my husband is a plumber) which makes me a little sad.

When I did my estimating I used SUPER HIGH numbers for my costs. Already I have seen the advantage to that as although the lot had a previous house on it the county(los angeles) is STILL requiring me to do a soils test/geotechnical report! And a site survey! I gave them a dirty look and told them it is unjust and ridiculous demand but they didn't seem very sympathetic!

The water company is reaming me as well because although there are exisiting lines there is no meter and they want 5-15k for a meter, but it is covered in my utilites as sewer was much lower then I estimated anyway !!!

So there is around 3-4k I was NOT counting on spending. But I still have a 40k reserve and everything else is matching up fine with my numbers. I was a construction controller for many years so I do not think I will be over on my materials and KNOW I have extra in my labor.

AAAH can't believe it!

My biggest savings point is going to be on labor. I pretty much stole a lot of the work from the general contractor (my dad) to bring costs down. I have a piece work labor allowance and I firmly stand that my labor costs will be 30% lower then anyone else out there with my special concocted labor model. But when I is said and done I will let you know if it truly pans out that way.

I am working myself as well, I will be on the plumbing, electrical and painting crew and jobsite dominamatrix daily whipping the crew to meet the schedule.

[Pat L.]

on the water lines & sewer lines
we got nailed on the crossover separation between water & sewer
cost us an extra 4 days of re digging & re -routing.
after the pipe lay was approved by the Bldg Inspector but not by the 'sewer' guy
good luck keep us informed

[Emily Dixon]

goes to show building isn't for the faint of heart or the impatient. LOL

[Jon Klaus]

Congrats on starting your project! What is your budgeted $PSF? 40 days to build is quite impressive. Maybe you could keep a running diary here so we could follow along?

[Emily Dixon]

As a cost accountant I will state I am personally against the Per Sf Price method, but I am at about $83.15 if you took total costs/sf of home. Which is pretty low for southern california, although people in other areas are laughing out loud on how much more it costs to live in california right now. A HUGE part of the costs are the lot preparation costs, permit fees, and the school tax really actual construction costs are more like 60-70/sf

BUT this is greatly due to taking all of the general contractors markup out, paying him only daily to be on site for framing and roofing and paying him instead of an expensive architect to draw all the plans in autocad(other generals pay him to do this for them) He is getting older, it is a nice setup for him, saves us money, makes me more money as project manager (I get paid out of labor allowance for days I am supervising jobsite) and saves our owner/builder a grip of money allowing him to get a decent return from the investment. which for our area is amazing because you can't really build for profit right now unless you are a builder. But with this model we can spread some of the capital around to the construction crew, material suppliers and investor still gets a nice return. We are seriously trying to do our part in helping the 2013 economy and providing some jobs. Most investors want a DIY Quick flip approach which provides benefit only to the investor and realtors and banks and leave the blue collar unemployed. We need to get our depressed, unemployed construction workers back to work. (Most of them went on to other things, but some of us love construction and do not want to do any other things)

[Emily Dixon]

I am sorry Jon that does NOT include the land. Land cost was (I really don't want to say it is embarrassing but it is just the way southern california works right now) $227,000 14, 400sf undivisible(oh how I wish I could have subdivided and built two houses! OUCH!)

we are building a 1950 sf 3bd/2bath with attached 1bed/1bath accessory unit fully plumbed. (Covenant states owner must live in first unit to rent out the other- but we are pretty sure it will sell fast) ARV now we are expecting is 450-485 but house will not be ready until July and things could change.

all cash, no bank wil benefit on our blood, sweat and tears LOL

[Karen Margrave]

Emily Dixon Yes.... a running update would be nice. I wish we could find a lot for $227,000, what a bargain!

[Emily Dixon]

Karen Margrave that makes me feel better, thanks. I felt like its a total ripoff. but then again i lived in missouri for 9 months last year LOL

[Karen Margrave]

Emily Dixon of course it too depends on the neighborhood, values, etc. as it all has to pencil out. One thing I've learned since moving to so Cal is that vacant lots are so rare, agents don't know how to actually price them, so they price extremely high! They have no concept of what it takes to develop a lot, they look on MLS and see a few other outrageously overpriced lots and think that's what the 'value' is, and then price theirs higher! It's crazy!

[Emily Dixon]

Karen Margrave my same theory. I told my broker boss that the land is way overpriced, but as long as we can make the numbers work he is willing to pick up. It is insane. But if you keep an eye on the MLS you see land going going down. I have 64 pieces of land I am watching for right time to make low offer, many have been sitting there FOREVER but some are in cities with crazy standards and a lot with the slopes, which I am still researching costs on that one. Once I get a hillside home cost I will be able to pick these properties up. I know it can be done right now I am close to determining true cost but I have a few more things to check on in detail to make sure I am not missing anything.

[Karen Margrave]

Emily Dixon There's a lot that you have to know on dealing with some of those hillside lots. The soil in San Clemente is challenging, even in already built out subdivisions like Sea Pointe Estates, the remaining lots have to be brought up to current standards, requiring stabilization that wasn't there when the subdivision was created. Others are down in holes, and all the site work brings the costs up drastically, which wouldn't be bad IF they were priced with that in mind, but they aren't. Laguna Beach is a nightmare for approvals. The lots in Orange are way over priced, etc. The one lot in Huntington Beach is gone, and you have to watch for the costs of capping oil wells there. I just talked to someone that bought a lot and had to cap 3 wells at a cost of $350,000.

In looking on MLS I don't know where you are finding that many lots to watch!

[Dev Horn]

Hi Emily Dixon - Here in Texas where land is cheap it's not uncommon for a nice property to be priced at $100/sq ft. And while it may not be the only measure, we certainly look at it when comparing the pricing of comparable properties. With your land considered, you're at $200/sq ft. in cost and it sounds like you think you can sell for at least $230/sq ft. It's pretty easy to look at recent sold comps and see if this is a good pricing/profit assumption.

[Michael Galloway]

Emily Dixon it sounds like more responsibility (Dad is slowly handing over the reins). I can not wait to hear more about your success and trials.

[Emily Dixon]

Karen Margrave 64 lots in orange, la, san bernadino and riverside counties.

Dev Horn thats how we did the math as well. I used $230 a sf ARV even though those comps are not brand new construction, and do not have the income potential with the attached accessory unit. so we will see if the market will give us more. Have a few realtors in the area already letting people know about the house and we don't even have permits yet so it may sell higher then I think, but I am ever the pessimist so keep my construction costs HIGH and sales price LOW for any projects so the rest is just gravy

[Emily Dixon]

Karen Margrave I will conquer hillside building by 2014 just not quite ready for it yet. where there is will (and lots of money) there is a way LOL But definitely avoiding the oil rig lots although that placentia one that was on market for a while but expired was very tempting.

Michael Galloway a little more like daughter stealing the reigns for her own income making and giving some scraps to dad LOL

[Steve Babiak]

Are you putting in completely separate utilities and meters for the accessory unit, so that the owner never has to pay a tenant's utilities? Now's the best time to do so ...

[Karen Margrave]

Emily Dixon Well you definitely have a line on lots that aren't on MLS!! Because there's NOTHING on that! If you decide not to go after any of the ones in marketable areas, that are actually buildable, let me know, I need just one house project to do while getting the medical building going.