Build new instead of buy?

[Badfish740]

I don't know if anyone here is in the building trades, but I'm just tossing an idea out because everyone at NJPB is so darn knowledgeable and nice! Sarah and I reeeeeeeeally want to get into a house soon which of course isn't easy in this state to begin with, but we have some additional challenges. I work in the Trenton area and she works in southern Sussex County (Hopatcong Public Schools) so it makes no sense for us to live in or near the pines much as we'd like to. Home prices being what they are we said to ourselves "Why not build?"

For example, this Cape Cod is exactly what we would be looking for. It's just over 1000 SF with two bedrooms on the ground floor and space to put two bedrooms and a bathroom upstairs. We have no desire for a large house or a huge piece of property, etc... Just a house with room enough for ourselves and two kids (well, one day), that's well built and comfortable. If we wanted to go bigger we could always add on once our income allowed. The plan estimates a rough cost of anywhere between $90,000 and $100,000 to construct including labor in the Northeast region of the U.S. First off-are these prices realistic?

If they are, then my next question is, how much lower could the price get if we did all of the finish work ourselves? I'll try to be as specific as possible here. I am proposing hiring a GC to do the following:

* Excavate and build full height (8' ceiling) walkout basement with internal and external drain tile.
* Excavate and build septic system suitable for a 4 bedroom house in well drained #5 soil.
* Drill water well-I know that drilling a well can be a crapshoot, but average around the area we're looking is 300' with maybe half of that through rock.
* Frame, sheathe, and finish (roofing, siding, windows/doors, etc...) the "envelope" of the house.
* Install all interior systems (Insulation, electrical, propane/gas, plumbing, HVAC units/ductwork, fiber optic, etc...)
* Install subfloor, drywall (tape/spackle only)

Once the house was at that point I would consider it "finished," and do the following myself as I was living there. Obviously some jobs would take priority over others:

* Sand and paint drywall.
* Finish electrical (Install light fixtures, outlets, etc...)
* Install all flooring-hardwood laminate/tile because my fiancee has bad allergies and does not want carpeting.
* Finish plumbing (Install/connect sinks, toilets, bath fixtures, etc...)
* Install all indoor trim, interior doors, countertops, closets, shelving, cabinets, appliances, and any general "finish" work.
* Perform all landscaping other than rough grading done after foundation construction.

Our goal would be to begin living in the home as quickly as possible by installing the bare minimum we would need (one working bathroom, basic kitchen, etc...) so that we could slowly finish the rest of the home over time. I realize this may seem a bit bizarre to some, but we have our reasons. Both of us have decent paying jobs, but have only just emerged from credit card debt accrued during college and have only managed to save just over $10,000 thus far. Also, we'd like to borrow as little up front as possible, keeping our mortgage payment low- instead we'll finish the home as our cashflow allows over time. We're both relatively picky and would enjoy being able to have total control over the finishing touches on the home. Plus she's a hands on kinda gal who will help me wrench on the truck and she's not afraid to get dirty, so she can help me every step of the way. I'd love to build the whole place myself from the ground up, but without quitting my job it would take at least 5 years!

Obviously we know that it won't all be fun and games, its not as easy as Tom Silva and Norm Abram make it look, and there will be weekends/nights when we're tired of working on the house, but we both feel that it will pay off with a lower mortgage payment and a home built exactly to our specs. My parents did something similar when they built their log home, but my father really took over the project once the outer shell was completed and did all of the electrical, plumbing, HVAC, etc...himself. It also took him about 3 years to complete the house, not to mention that the "fine" work continued for at least another year and a half after we moved in. However, my parents paid the home off in 17 years and love the house.

All of that being said, let's get down to brass tacks:

Would I be able to find a GC who would be willing to take on the project? Would it be "too small" of a job?

If the total construction cost mentioned above ($100,000-high end) is accurate, would it be realistic to assume that I could have the house built for $70,000-$80,000 if I finish it myself?

Has anyone else here built a home in a similar manner?

One last question and I'll shut up. With regard to the original stated cost of $100,000, is it safe to say that it probably assumes "middle of the road" materials? If so, how much of a hike would that price take if I specified the following from the GC:

(From the top down)
Owens Corning Berkshire shingles
Ice shield underlayment
3/4" sheathing throughout (Not OSB)
Tyvek housewrap
Owens Corning vinyl siding
Anderson windows and doors (Tne sliding glass door units, double hung vinyl clad tilt in windows throughout)
Owens Corning R-21 insulation in exterior walls
Owens Corning R-38 insulation in attic
3/4" T&G subfloor
Silent floor I-beam joists
200 amp service
Wiring for a ceiling fan in every room plus two on the front porch, at least four outlets per room (two GFIs in each bathroom), at least one light fixture per room, at least two lights on each exterior wall, and one GFI on each exterior wall.
Water spigot on front and rear walls
Copper/PVC plumbing throughout
Bosch tankless hot water heater
Trane HVAC units (single zone forced air/gas heat)

I'm hoping that the price won't get too out of control since the home is small, but I don't know enough to estimate the costs accurately. I'm not trying to be a snob, but I'd rather have a really well built small home than a poorly built large one. In any event, the more guidance I can get here the better. For now I've shifted my house hunting to land hunting, which is still tricky here in NJ, but I'm hoping one of two things will happen: Either I'll find a nice site that's off the beaten path a bit and will need a well and septic, or I can find a derelict home in a residential area that I can knock down, utilizing the existing water, gas, and sewer lines.

Another thing I should probably add is that I have a lot of friends in the building trades who I've known all my life. In fact, based on what I hear from you guys I'm going to approach a friend of mine who's been in the business for himself for over 5 years now and just finished a complete gut and renovation job on his own home to see what he thinks about taking this on as GC. The guy who will be the best man at my wedding has his own excavating company and has lots of foundation/septic experience. Another friend just took over his father's HVAC business, and from working with various local trade unions I know a lot of master electricians and plumbers very well. Basically, I could probably get a lot of work done at a discount, or for a case of beer/weekend of fishing, so I guess that factors in too. I'm just trying to decide whether or not I want to take the next step and look into a construction loan-HELP!

 

[bobpbx]

I think:

(a) You have good head on your shoulders and understand how to research and plan.

(b) Foward this to all those construction friends of yours via email to get their input. Don't waste putting that nice synopsis together just for our input. Get others to dispense their knowledge.

(c) See if she can get a job teaching down here and swing closer to the pines if you really like them. You only live once.

(d) Don't sell yourself short on what you can borrow with a 40 year mortgage. You'll be surprised 10 years from now how little your payment really is in relation to your income. A house is always a good investment.

(e) Whenever you do construction, it always, always costs more then you plan to.

(f) If you really want to know how much those premium materials cost, go even deeper in your research.

(g) There is a rule of thumb for both rough and finished house building in each area. When I did my addition in 1990 I think it was $65 per square foot. Find out what it is now and use it in your estimate.

good luck........

 

[Teegate]

(d) Don't sell yourself short on what you can borrow with a 40 year mortgage. You'll be surprised 10 years from now how little your payment really is in relation to your income. A house is always a good investment.

.

Good one Bob. It is so true.

Unless something unforeseen goes wrong, in 10 years you will wish you had spent that little extra for something that you really wanted. The man I work with always complains that his neighbors house is the one he really wanted. It was the biggest one in the development and he could afford it easily now if he had bought it then. Look to the future with optimism and get what you want.

Nice job Bob, and you also Badfish.

To all, if you are a long time member here, it is ok to use your first name in your posts.

Guy

 

[Boyd]

Hey Badfish,

I've done all the jobs you plan to do yourself and even more as I have a background in carpentry and have learned plumbing, electrical and other stuff through the "school of hard knocks" I think it's a good idea to do as much as possible if you have the talents and experience.

I pretty much gutted an old farmhouse in upstate NY and changed the floorplan by myself over a period of years. But it meant my daughter was born in a construction site and spent most of her life until middle school living in one.

I don't know you, but I can PROMISE it will take longer than you think to get done. It may or may not cost more than you expect - that depends on your knowledge and willingness to compromise to stay on budget. But you have to place some cost on your own labor... consider whether your time is better spent earning money to pay someone else. I'm not suggesting that it will be, but just think about it.

When I started renovating that house it was fun and rewarding, but after it dragged on for years I would go through phases of thinking it would never be done and feeling sorry for myself for spending all my "free" time doing hard labor. Nevertheless I stuck with it and the first floor turned out really well. Never did finish the work upstairs though...

Now the part about "we'd like to borrow as little up front as possible, keeping our mortgage payment low" is a little worrisome. There are many thousands of people who said this a few years ago and the lenders convinced them not to worry - get what you want today and worry about tomorrow later. Those people are in big trouble now and those lenders are also in big trouble. All I can say is that's a very bad premise to start from. Figure out what you can afford with a real mortgage at the going rate and a real downpayment. If it doesn't look like that can work while allowing a margin of safety... don't do it! You may need to keep renting.

I don't know anything about prices in your area but your numbers sound really low to me offhand. Be sure to discuss this with people who really know, since I don't. Is there no way you can buy an existing home? Maybe something which isn't quite what you want but has potential for remodelling? That would be a much safer approach IMO because you won't have a gun to your head to finish a house and you'll know exactly what it costs before signing the papers.

I've bought 4 houses and sold 3... all existing homes. I can't ever imagine building a new place myself, but that's just me. Whatever you end up doing, I wish you the best. Home ownership can be a nuisance at times but can also give you a lot of great times. Keep chasing your dream!

 

[piker56]

My wife and I didn't build our own house, we went the existing house route, but our friends built their own and here is a brief list of things they dealt with: Depending on the locality you buy your land in, your permits may take a long time to obtain (our friends-over 2 years). If you do work yourself, the inspectors may give you a hard time (I've also had this one happen to me). As already stated elswhere, it will take longer and cost more than the estimate. Whatever route you choose, best of luck!