How much to build a house?

[speeder]

I know that this is a loaded question but does anyone have an example of how much it cost to build a custom home in your neck of the woods? Any details or photos, (even better), and price per sq. ft., not including the land?

TIA. Just trying to get some data points.

[island911]

What happened to the Airstream?

[Eric Coffey]

Completely rough ball park for construction/hard costs:

Plain-jane spec house: +/- $80-$100/sf.
Semi-custom w/ mid-level finishes/fixtures: +/- $100-$200/sf.
Full custom with higher-end finishes/fixtures: +/- $200-$300/sf +++.
Then you have the land/lot and soft costs (architectural, engineering, permits, utilities, etc.).

The key factor to consider is the geographic area/local market you are looking to build in. That will help narrow your budget estimates.

[winders]

Originally Posted by Eric Coffey

Completely rough ball park for construction/hard costs:

Plain-jane spec house: +/- $80-$100/sf.
Semi-custom w/ mid-level finishes/fixtures: +/- $100-$200/sf.
Full custom with higher-end finishes/fixtures: +/- $200-$300/sf +++.
Then you have the land/lot and soft costs (architectural, engineering, permits, utilities, etc.).

The key factor to consider is the geographic area/local market you are looking to build in. That will help narrow your budget estimates.

Building houses is a lot like building race cars. It costs a lot more to build a nice house on a nice lot than it does to buy a nice house on a nice lot.....

[speeder]

Originally Posted by island911

What happened to the Airstream?

Still have it, that is one piece of my housing puzzle but not really being used. Still, I call it my, "hedge against homelessness."

I did a lot of work on it over the summer and will update that thread one of these days. Might have scored another trailer as well, just need to collect it from the great north. I'm considering building a spec house or two in Minneapolis w a partner, it's a pretty hot market but I'm still not seeing the profit @ $200+ a sq. foot. That's $800k in construction costs for a 4k sq.ft. house plus maybe $300+ for the lot in the area you'd want to build in. The house I'm envisioning would sell for around $1M, give or take $100k. Doesn't add up.

I know a couple young guys in LA who have been rehabbing/flipping and now mostly building spec houses since the downturn in '08, they've gotten good and have made a lot of $$. They're not bottom feeders, they put together really nice houses. What they sell for makes no sense but that's LA RE these days.

I'm trying to figure out if it's do-able in Mpls, a much nicer and saner market but still very hot right now.

[speeder]

I should add, the numbers I tossed out above add up barely if you're building to live in it and hold it but not as a for profit operation.

[DanielDudley]

I can't make money if I break even, but even if I break even, if I get to pay myself for any labor I provided.

[Crowbob]

Around here, the minimum range is $60-100/sq'. I say minimum as in a no frills starter home not including the lot or land it is on.

[IROC]

We've looked into this. Around here, a nice house is $140-$180/ft^2 (and that is if you pick from a selection of what the builder offers). You can certainly spend much more if you want something truly custom.

[stomachmonkey]

$80 gets you a basic home, no upgrades.

$110 gets you nice upgrades, granite etc...

$150 gets you pretty much anything you could imagine, if you pay more you are doing it wrong

Gobs of land, no lack of skilled labor and weather conducive to year round building helps.

That's final retail value divided by sq ft and not what it actually costs to build.

No idea what the margin is.

[bpu699]

Totally depends on the area...

In the midwest, exclusive of major dense areas (Chicago/north burbs/etc)...

$130 gets you a basic vinyl sided house with carpeting. Some granite, but basically a cheap house with superficial add ons.

$150 gets you all the niceties you want. Granite, hardwood floors. Nicer kitchen. High cielings... Outside is better, though not "super." Think Hardiboard planking, stucco, yada, yada. Usually mass produced by a builder, with small variations to make you feel "special."

$200 is where you start getting into nicer structural improvements. Full brick, Stone. Nice landscaping. Huge garage. Sun rooms. Etc. This is custom, usually with an architect drawing parts of it up.

Then add land...

Stuff down south is cheaper, as labor is cheaper, and foundations are cheaper (no basements)...

Then you have California, which is just stupid, if the TV shows I watch are any indication. 2 million for a pool? $1 million to rehab a 3000 sf house? Then sell for 10mm. Say what?

[techweenie]

Years ago a friend was certain the path to an inexpensive house was to use overseas shipping containers as building blocks. I imagine that's about the only way to get under $100 sq ft.

There are some pre-fab house suppliers out there that can be closer to $150-175... Here in LA, with quality furnishings, its likely a minimum of $250 sq ft.

A house on my block in West Los Angeles is listed at what works out to $792 sq ft. The house on Mulholland Drive that I sold in '02 was recently listed at $2100 sq ft (it didn't sell)

[Craig T]

Speeder, I just went through this exercise with building contractors on two identified lots. One was on Johns Island, SC and the other in Hilton Head, SC. Both were water access 1 acre lots at under $100K. Building a 2,500 sq ft one story worked out to be about 25% more expensive than buying a finished house in the same area.

Most builders have good boilerplate plans for around $5000, but permits ran as high at $30K, even more with a dock permit, and can take up to a year. I see guys saying a basic house can be built for $100-$150 sq ft, but I did not find that. I'm not looking for a show-off house in retirement, but do want a decent kitchen and master bath, hardwood floors, and granite counters. About the cheapest I could get that down, even in SC, was $250 per sq. Coastal water lots in SC have some extra raised foundation costs, but that was about $20 per sq.

In a hot RE market, you better budget $250 per sq.

[aigel]

In my area (East SF Bay suburbs) it is $250 / sf for something decent if on a flat lot. If any earth moving / retaining walls etc. come with it, you can exceed that easily. The $250/sf are basic, no sub zero appliances or $50k bathrooms included. I imagine LA is similar unless you are in the center or the very fringe like the inland empire or high desert.

G

[creaturecat]

Vancouver: over $1000/square foot for a 105 year old tear down dump in a bad neighbourhood.

[MRM]

Denis, I know a lot about building high end houses on spec. Call me if you'd like. There are two keys to making money doing it. The first is to build on an absolute premier lot. Location is everything. People will pay extra to get the location they want. They won't pay extra to get a nicer than normal house in a poor location. The second is that the cost of land acquisition drives all economics on the project. Everyone knows what a finished project will be worth on any given piece of land, and everyone knows about what their cost of construction is. The competition in the marketplace drives the price of land up to the point that it is just barely worth it to a developer to take the risk. If the land is priced lower it sells before the rest of the market knows about it or it gets bid up to market level. If it's priced too high the land sits on the market.

So to get a deal that will allow you to make a good return on the project, you have to know something that the rest of the market doesn't. Either there is some hair on the property that the market is overreacting to and you know you can resolve for less than the discount the land is giving to the marketplace, or you have to know how to put something with more value onto the lot than the rest of the market, or you have to know that your cost to build is less than the rest of the industry. If you can work with an architect who can produce a unique value added design on a premier property and do a lot of the work yourself, you might be able to do well.

I know a builder in Florida whose business plan calls for buying ocean front lots on Palm Beach Island and building spec mansions. As one example, he spent $10 million on one lot and spent $6 million building a 20,000 square foot main house and a smaller carriage house. He then sold the house for $42 million. That's the kind of land to improvement ratio you're looking for to have a sure thing. This builder later went bankrupt when he did a project where he bought a less than premium lot and over-built the house to try to make up for the lot location. People will buy a location and customize the house to fit their tastes, but they won't buy a fabulous house and change their taste to fit the location.

[Tervuren]

Originally Posted by techweenie

Years ago a friend was certain the path to an inexpensive house was to use overseas shipping containers as building blocks. I imagine that's about the only way to get under $100 sq ft.

There are some pre-fab house suppliers out there that can be closer to $150-175... Here in LA, with quality furnishings, its likely a minimum of $250 sq ft.

A house on my block in West Los Angeles is listed at what works out to $792 sq ft. The house on Mulholland Drive that I sold in '02 was recently listed at $2100 sq ft (it didn't sell)

Another idea is to buy up industrial shelving and use it for verticals. It will be an incredibly strong box structure, put a roof on top and add siding. If I wanted to make a mega garage I would pursue this path. Tall ceilings for a good car/truck lift. Could put in a lower ground level shelf rack around it, then a balcony level shelf rack above it.

[icemann427]

Maybe spend a couple thousand on a house plan you would consider building from a book of plans, getting two or three sets to bid out the major subcontracts. The bigger sub costs are rough plumbing, concrete, lumber, framing, roofing, rough electric, windows, drywall, and painting. Get at least two bids for each item. You can pretty much guess at the costs for finish plumbing, finish electric, cabinets, etc. by going to the big box stores.

Make sure you know what ALL your fees and permits will be. You really don't need a general contractor if you can find decent subcontractors and can supervise and schedule their work. One thing to consider, though, is can you obtain construction financing without a general? Most banks require about 20% of the total costs to be borne by the borrower, so you will have to put down that amount prior to a funding.

If you do the aforementioned footwork, you will know within about 10% what your costs will be.

[speeder]

Thank you all. I was looking more for specific construction costs but RE prices per sq.ft. are informative as well.

And Mike, thanks a lot. I'll definitely get with you when I get back there, should be soon. You're not kidding about location. The guys who are making big $$ are in the really high end and know what they are doing. I know a guy out here in LA who bought a tear-down in an incredible location a few years ago. It's in the "bird streets" above Sunset, for anyone who knows LA. He paid something like 2.2M for the property, it actually sat on the market for a while because it's an expensive proposition to build there. It's on a bluff on the end of a long private driveway.

The last I heard, he hadn't started yet but the plan was to spend around $4M demolishing the place and building an amazing modern house w infinity pool, etc. He would then sell it for $12M, (a lot more now because prices have skyrocketed since he bought it), and even I can do the math on that one.

The trick is doing it on a budget and scale that a little guy like me can swing.

[jorian]

Hard and soft costs combined in our local markets run from $150/foot for a rental condo and $300/foot for new house in a desirable neighbourhood. The sky is the limit in terms of luxury homes in the best areas.

I finance a lot of construction projects and the most successful guys buy the land right. You'll never make up for a poor land purchase through cheaper/quicker construction. Many people also underestimate the time value of money. Here in Vancouver permits can take over a year for approval. Longer if you're building multifamily. If you have debt on the project that can kill profit.

I assume you are building to flip. A reasonable developers profit in my market is 13-15%. I have seen 20% but that is largely due to density bonus or up-zoning of some sort on the land. A good friend of mine is a builder in Seattle and regularly gets 30%. He builds to a price in a defined area and always builds flat roof (or shed roof) modern.

Best advice I can give is know your market really well and don't over pay for the dirt. Mike is absolutely correct. Good luck with your project.