| Name: |
woodman60
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 4:32:56 PM
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The days of builders charging these outrageous prices per sq. ft. are over. All the houses in the Ridge are overvalued by at least 50%. The actual cost of building is between 65 to 100 $ / sq. ft. and with the decrease in materials now and the lack of work it might even be lower. I have researched building a home on the lake for about 1 year and understand the major concepts. A builder will certainly know the minor details that could trip you up when building your own home. I know several people who have built their own home and they are very happy doing this for about 90$ / sq. ft. Everyone needs to make a living and the builders have been riding a gravy train for the last few years until recently. The day of the builders profit being 50% of the bid is OVER. It is not for everyone, but you can try it since anyone can get a Contractor license.
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| Name: |
lucky67
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 7:24:27 PM
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well, your comments may be right on, but things have changed in the lending community also--when you say anyone can get a license, i can guarantee you todays construction lenders will , in addition to your license, research your qualifications & past building history before jumping in with an inexperienced "builder" who just got a license
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| Name: |
lake care
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 7:25:06 PM
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Good Luck! You WILL get what you pay for!
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| Name: |
Talullahhound
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 7:49:21 PM
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Having spent the last year and a half having a house built, I don't think I would undertake it myself. I understand the "major concepts" as you say, but the devil is in the details. Having someone with experience to deal with it all was worth the extra money to me. And I don't think we spent $250 s/f. I know it was less than that.
One of the things I noticed is that there is a lot of interaction amongst the trade people. A lot of things seem to hang on long standing working relationships. And I know I don't have them. I guess I'm just not that adventurous in my old age.
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That's like saying the days of buying a $5000 diamond ring are over and you can easily buy one for $1000. There is a huge range of factors involved that affect building cost from foundation to finish. Many builders exploited the market a few years back, but they are now paying the price and the days of selling an average home for premium dollars are over (for now anyway). Yes, you can build a house for $100 a square foot (or even less), but I have also seen several homes that cost more than that in materials only.....it's all about what you want and what you can afford. There are homes on the lake that are worth over $400 a square foot and very many that are not; in today's buyers market, I'd say the old adage of "you get what you pay for" stands true more than ever.
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| Name: |
Barneget
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 8:26:06 PM
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Woodman, I'm not a builder, but here is my understanding. The runup in home prices was driven by supply and demand. Things began to boil in late 2003, low interest rates allowed people to refinance and take equity from their homes. This put pressure on the trades, they responded by increasing their rates. Even illegals were commanding $11/hour. Then, the 2004/2005 hurricanes put tremendous price pressure on limited building supplies. Wall board jumped 20% the day after Katrina hit the Mississippi Gulf Coast. Meantime, my custom builder friends continued to work on 13% gross margins. I'm not very good with math BUT, a 13% margin is a long way from the 50% you are quoting. My builders, at the lake, and in town, were worth every penny we paid.
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| Name: |
woodman60
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 8:35:07 PM
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All points well taken. I have arranged to have a superintendent(retired contractor) on site daily to supervise and help with getting thru the system and the 'network'. The architect that drew the plans will visit and will be paid by the hour. 5500 sq ft house with all the amenities you would expect form a Ridge or Trillium home and current estimates are $125 / sq ft. including the super and architect fees. I have discussed this with the bank and they are fine with it since I have explained the building plan extensively and I have proper credentials to get the loan.
The bank review the plans and believe the house will appraise for more than the construction cost. Building is bad enough when someone else does it and I am sure there will be plenty of headaches if I do it myself. I just have a hard time spending the extra 250k - 500k to have it built. I have thought long and hard about this and i think I can pull this off but......at the same time I am trying to talk myself out of this also.
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I haven't seen any houses in the Ridge that would cost under a $100 a square foot (even the average homes) even before the builders took their cut, and I've been through many. Many of the specks are in distress and could be purchased for less than actual construction cost, but you would still be looking at a considerable sum of money. Part of the problem stems from a lack of common sense from both Russell Lands and the builders. Many of the homes have cost heavy non-essentials while skimping on other items that are easily noticeable. Russell also forces the issue on many costly restrictions.
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| Name: |
Talullahhound
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| Subject: |
Let us know
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Date:
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1/28/2009 9:34:02 PM
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what you decide and how it works out for you. Good luck!
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| Name: |
PC Al
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 9:52:31 PM
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I did not like the prices I was seeing back in ’99 and found a contractor who would build on a cost plus basis. I ended up happy and he seemed happy. He did not have to extend any of his money or credit and took no risk. He and I decided what was a fair profit for him. There was no risk for him and he knew he would have a steady income. With building slowed down now, you might want to check it out. I would do it again in a heat-beat.
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| Name: |
wix
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 10:04:36 PM
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Just for information, an owner can build his own house without a contractor's license. Owner can take out the building permit; just tell the building department that you will be the gereral contractor. That rule applies just about anywhere I believe. Also, an owner can be his own sub and do most specialties that are usually hired out. I've done it recently at the lake. Yes, you can build for $125/ft and I've seen some in the Ridge that were built for less than $125. Landscaping, seawall, and dockage, excluded.
Getting what you pay for is a very over used term. Don't sub out any job without receiving at least three bids from qualified subs. Hiring a "well known" sub without comparing his price is asking for trouble. I've only met one sub I would hire "by the hour", and that was 28 years ago. My two pennies.
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| Name: |
muddauber
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 10:24:18 PM
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Start at 13%. Given cost overruns, changes from plans, accommodating owners requests, most are good to get 6-8% at the end. Good builders are not ripping people off.
Good luck to those who think they can build their own house. Almost amusing some think they can do what it has taken a professional years to learn, acquire good skilled craftsmen, get quality materials and maintain a reasonable schedule.
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| Name: |
lucky67
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| Subject: |
Builders 250-400/sf
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Date:
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1/28/2009 10:49:48 PM
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you must have not needed a construction--built with your own money--no bank will lend to an un-experienced, unqualified person who wants to build the house themselves--thats like getting a doctor to fix your septic problem
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| Name: |
Lakey
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| Subject: |
$100-150 for a very nice house
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Date:
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1/28/2009 10:53:21 PM
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1.The contractor license is a lending restriction with most banks if not all.
2.Everyone thinks they can build a house and they are almost always wrong. People take pride in their homes, especially when they build it themselves. That is why when they are bragging about the work and asking people what they athink about their house now that they are "almost finished" they don't tell them it is a piece of $hit and just say its nice.
3. Unless you are lucky it will cost you a lot more than the 10% you are trying to save.
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| Name: |
itisd
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| Subject: |
my take on cost
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Date:
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1/28/2009 11:01:56 PM
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The 10% to 13% builder profit that has been quoted is not accurate in my opinion. What I have found on cost plus jobs is that the builder bugets the hard cost for building material and the labor cost and labor burden. Lets say that this comes to $400,000. I have found that to this figure the builder tacks on or adds his overhead. If that builders annual overhead percentage is say 18% based on his annual volumn , he then adds 18% to the $400,000 which now becomes $472,000. Then at the end of the job he is due his 10% profit which is $47,200.
He is not just making 10% but much more than that. His annual salary, superintendent salary, office cost, truck cost, cell phone cost etc is all that makes up the term overhead.
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| Name: |
wix
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| Subject: |
my take on cost
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Date:
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1/28/2009 11:32:53 PM
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You are on the money. Cost plus jobs are a license to steal. pure and simple. Our church, really the preacher, just had to use a certain contractor and build cost plus. Took a $1.5 M project and made it a $3.2 M money pit.
Most cost +10% jobs really turn out to be 25-30% in the general contractor's hip pocket. Never figured out why the GC should make 25% on the plumber's work, etc.
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| Name: |
wix
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| Subject: |
bamaalum
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Date:
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1/28/2009 11:47:02 PM
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Depends on your banker. Looks like we may be getting back to the times where it pays to know your banker and it pays for your banker to know you. Ah, the good old days. I'm not recommending that a complete novice attempt to be a builder. If you have an interest in building and use some common sense, you can do as good a job as the average general contractor. It's your house so you want it right. Read books on construction techniques and standards so you will not be taken advantage of and you can do a better job than a GC. Think of it as a job that will pay you about 25% of the cost of the house, in savings.
Doubt you could get 100%+ mortgage on this type set up. Ah, the good old days.
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| Name: |
water_watcher
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| Subject: |
Builders 250-400/sf
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Date:
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1/29/2009 7:14:41 AM
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There is no way the homes at the Ridge were built for $65-$100 a SF. As others have said, you can build a very nice home for $125 a SF ... but it will not have all the extra's you see in the homes at the Ridge. Most are top end quality. My guess is most homes at the Ridge have a minimum builders cost of $175 a SF depending on size and extras (fluff). I would say some easily cost $200 to $25 a SF. That is why some that have not sold they are not moving off the $1.3 to $1.7 million price (of course land is in that as well).
My wife and I were at the club house at the Ridge last weekend and talking with the RE agent. She told us they sold 4 high end homes in January and they are getting a lot more interest with the low mortgage rates. She felt things are really picking up. She also told us the Russell Lands will be starting the next phase this spring. Since it will be at least 18 months from the start of the phase before houses are finished, that should hopefully be good timing with the economy. She also said that "several" lots in that phase have already been presold.
I had thought the townhomes that go for $700-$800,000 were having problems. But she said there are only 4 that are unsold and 2 resales. That is not bad.
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| Name: |
Swimmer27
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| Subject: |
Pure Propaganda
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Date:
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1/29/2009 7:59:07 AM
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That ranks right up there with RL trying to convince the masses that 2007 was its second best year EVER! Just so there is no confusion, I don't beleive a word of it. when your sales don't aren't tracked through the MLS you can claim them to be anything.
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| Name: |
woodman60
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| Subject: |
Builders 250-400/sf
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Date:
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1/29/2009 9:17:31 AM
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The market much be significantly better on the lake than I thought. Great!
My initial post was to see if most people thought the price of construction on the lake was out of range with....say Eclectic, Alexander City. It appears that there is a 'lake premium' that has been calculated into the cost of building on Lake Martin and I would think most second home or resort communities have this (beach, mountains, ski and golf areas). My point.... a 5000 sq ft house in Alexander City new construction might cost $125 / sq ft. turnkey.... but, move the SAME house just 15 miles south then it cost $150 to $200 / sq ft. or an additional $125000 to $375000 more. That is a lot of gas money.
Why does the SAME lumber, windows, tile, granite, Hardi plank, rock, wire, insulation, ect. cost so much more only 15 miles away?
I dont mind paying a fair price to have the work done, but with $$ in short supply, some compromise will need to happen before I will pay the surcharge. I will bid the house out turnkey and see what the price will be but i will also get bids from outside of the Lake Martin region. Will go from there. Just my thoughts
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| Name: |
Swimmer27
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| Subject: |
Builders 250-400/sf
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Date:
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1/29/2009 9:39:00 AM
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It's simple. They have done it in the past becasue they couuld. The assumption is that if you are building on the lake then you are rich and can afford it, and if you weren't and couldn't, you should just go away. It has been a phenominom as long as I have been here though. My Dad always said the price tripled if they could see water.
My advice would be go for it. NOBODY is going to look out for your interests like you will.
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| Name: |
roswellric
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| Subject: |
Buy-don't build
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Date:
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1/29/2009 9:44:18 AM
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You can buy cheaper than you can build ...if you can find what you want of course. Builders at the Ridge and elsewhere are reducing prices significantly. Bargains abound and they won't last forever. But if you build be sure to pay the subs & suppliers, count the materials and get the waivers and inspect the results. These are dangerous times for buildiers...and you.
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| Name: |
roswellric
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| Subject: |
Builders 250-400/sf
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Date:
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1/29/2009 10:35:04 AM
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I have done it and did it for the same reason. The market was too hot at the time, the builders were making big bucks and wanted a premium of 35-40% to fool with me. I figured I couldn't make that many mistakes and I didn't.
You will need to figure your subs will charge you more since you are a one time customer. Really good competitive subs are probably still getting work and you'll pay a 10-15% premium and more if you don't know pricing. You will also be a fill in job. That's disruptive to your timing. When one sub gets out of step it fouls up the ones in line.
Distinguishing between a good sub and a "handyman" is the tough part. Some local guys will tell you that they can do everyting and they can't. Let's face reality. High production subs are not anywhere near Lake Martin. You really need some contact in the building biz to go through the selection process. Sorry for the rambling and good luck!
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| Name: |
roswellric
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| Subject: |
Your take on cost
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Date:
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1/29/2009 10:44:03 AM
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You are sure right about the concept but I don't know abou the %'s. Overhead is surprisingly high to most customers. A prudent builder will build in his overhead right down to potty time as a cost. Profits are after costs. You don't want a builder that doesn't know all his costs before the job starts bacause he'll take it out somewhere else.
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| Name: |
roswellric
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| Subject: |
my take on cost
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Date:
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1/29/2009 10:47:15 AM
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Because supervision is a cost like anything else. BTW Standard across the board markups like that are not generally accurate anyway. Some levels of subs need less supervision than others.
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| Name: |
Talullahhound
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| Subject: |
Builders 250-400/sf
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Date:
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1/29/2009 5:35:11 PM
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I've been through the Ridge twice recently and it appears that a number of houses are under construction. I know at least one huge house that was unfinished and deserted a few weeks ago is now marked sold and is being completed. (This was a Legecy builder home).
It really doesn't surprise me that The Ledges (townhomes) would sell -- they are really lovely and don't look much like townhomes. Definitely not your run of the mill at all. I've never been inside, but I have seen pictures and they look really first class.
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