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Talk to me about build on your lot vs. total gut job

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  • Talk to me about build on your lot vs. total gut job

    I read SHS's article on big dumb house (BDH)   {https://sidehustlescrubs.wordpress.com/2018/06/28/10-reasons-i-regret-my-big-dumb-house/} and I completely can commiserate despite the fact that I don't own a BDH.  However, it has come to the point in life where our current 1400sq ft oldest and smallest house on the block is no longer suitable for my family.  Personally, it is not the sq ft that is the problem, it is the layout, the age, some structural and supporting stuff that seems to keep dying and dying and dead.

    To keep on with the current house would require a total gut job and replacement of all the major stuff ie cooling system, roof, electrical update, plumbing, you name it.  TOTAL GUT JOB. Conservative estimate would cost about 200K, maybe? (I may need some help with the number here), to get the house to the state of suitability, code and aesthetics that would make it an enjoyable shelter for another 10-15 years.

    The other option would be to bid the current house a farewell, thank it for its service a la Marie Kondo, and start afresh by build on your lot (BOYL). We have met with some builders and the conservative estimate would be about 600K based on what we are trying to do.

    I need some advice here on what you guys think.  Also, please share the good, bad and the ugly of your experience (whether you chose the gut job vs. BOYL).

     

    Specific details.

    1. Lot value >>>> Current House. Current mortgage 85% paid off. Lot is in desirable location.

    2. Want and plan to stay in current area

    3. have considered selling present house+lot and then buying another house, however, a suitable house matching 80% of what we need/want would probably cost 3X the estimate compared to BOYL.

    4. I DO NOT BELIEVE in a forever home. The plan, regardless of path taken, would be to live in current address for another 10-15 years until the kids are grown and then move, lose the lawn, minimize maintenance and amf,yoyo.

    5. Hope with the endeavor of building is, of cos, to sell at a profit later on and reap the sweat equity of BOYL.  I know, I know, one should not see the house as an investment.

    6. personal stats: no other debt, retirement on track, employment stable enough, sandwich generation.

     

    **edited for some typos and to attach SideHustleScrubs article in text***

  • #2


    To keep on with the current house would require a total gut job and replacement of all the major stuff ie cooling system, roof, electrical update, plumbing, you name it. TOTAL GUT JOB. Conservative estimate would cost about 200K, maybe? (I may need some help with the number here), to get the house to the state of suitability, code and aesthetics that would make it an enjoyable shelter for another 10-15 years. The other option would be to bid the current house a farewell, thank it for its service a la Marie Kondo, and start afresh by build on your lot (BOYL). We have met with some builders and the conservative estimate would be about 600K based on what we are trying to do.
    Click to expand...


    How much sq footage are you getting for the 600K build.

    How much is the land actually worth versus the current house. You lose that value of the house when you demolish it and have to cart it away and build fresh.

    Can you salvage part of the house by gutting in stages and also having addition made so that you can live in it while it is being done. But you might not want to do that.

    If you demolish it where will you live while the house is being built. It will take 9-12 months to build one ( don't believe the 6 month hype, it rarely gets done in that time frame).

    There is a stress to building a new house. Everything has to be chosen by you. You will lose a lot of time on it. Be prepared for that.

     

    Comment


    • #3
      200k for gut job on 1400 sq ft sounds low.  I don't know what size you are planning to build if you tear down, but 600k sounds high unless you are planning on building a huge house.  In my area, cost for reno is roughly 200-250 per sq ft, possibly more depending on what surprises you find, what the structural engineer finds, etc.  Cost for new build sig lower due to no surprises or need to engineer work arounds.  Have you had a structural engineer look at the house, foundation, etc.?  Is it a classic house with charm and details that you want to preserve?  I would consider preserving a 1920s craftsman etc but if it's just a generic old house tear down and rebuild will likely be more economical with less surprises.

      Comment


      • #4





        To keep on with the current house would require a total gut job and replacement of all the major stuff ie cooling system, roof, electrical update, plumbing, you name it. TOTAL GUT JOB. Conservative estimate would cost about 200K, maybe? (I may need some help with the number here), to get the house to the state of suitability, code and aesthetics that would make it an enjoyable shelter for another 10-15 years. The other option would be to bid the current house a farewell, thank it for its service a la Marie Kondo, and start afresh by build on your lot (BOYL). We have met with some builders and the conservative estimate would be about 600K based on what we are trying to do. 
        Click to expand…


        How much sq footage are you getting for the 600K build.

        How much is the land actually worth versus the current house. You lose that value of the house when you demolish it and have to cart it away and build fresh.

        Can you salvage part of the house by gutting in stages and also having addition made so that you can live in it while it is being done. But you might not want to do that.

        If you demolish it where will you live while the house is being built. It will take 9-12 months to build one ( don’t believe the 6 month hype, it rarely gets done in that time frame).

        There is a stress to building a new house. Everything has to be chosen by you. You will lose a lot of time on it. Be prepared for that.

         
        Click to expand...


        Per builder and our research- 600K would get us a decent quality 3000-3500sq ft new built, most are quoting $125-200/sq ft (depending on options).

        Per appraisal, lot about 400K. The building is minimal.

        Probably not be able to gut in stages, because once we start, we will be opening many many cans of worms.

         

        We have budgeted for renting while new house is under construction.

         

        Agree with your timeline of 12 months.  Agree with hidden cost.  Agree with time investment that I won't get back or get paid, aka what I call my "BOYL sweat equity".

        Comment


        • #5




          200k for gut job on 1400 sq ft sounds low.  I don’t know what size you are planning to build if you tear down, but 600k sounds high unless you are planning on building a huge house.  In my area, cost for reno is roughly 200-250 per sq ft, possibly more depending on what surprises you find, what the structural engineer finds, etc.  Cost for new build sig lower due to no surprises or need to engineer work arounds.  Have you had a structural engineer look at the house, foundation, etc.?  Is it a classic house with charm and details that you want to preserve?  I would consider preserving a 1920s craftsman etc but if it’s just a generic old house tear down and rebuild will likely be more economical with less surprises.
          Click to expand...


          200-250 per sq ft for reno?!??!  That's more than what builders are quoting for new build. That's very good to know. Tho, this is not surprising.

          Structural engineer thinks foundation is decent, but the current house already has an addition (original original house was 1100sq ft).

          Not a classic house, hence, marketability for resale is not in the current house.  Most investor are interested in our lot only.

           

          Comment


          • #6




            Per builder and our research- 600K would get us a decent quality 3000-3500sq ft new built, most are quoting $125-200/sq ft (depending on options). Per appraisal, lot about 400K. The building is minimal. Probably not be able to gut in stages, because once we start, we will be opening many many cans of worms. We have budgeted for renting while new house is under construction. Agree with your timeline of 12 months. Agree with hidden cost. Agree with time investment that I won’t get back or get paid, aka what I call my “BOYL sweat equity”.
            Click to expand...


            If the lot is worth $400K and you plan to stay there for ~15 years, demolish and build.

            Build a slightly bigger home than you absolutely need so that you can take care of unexpected emergencies like parents or in law staying at home because they get old and cannot live on their own. Have 2 bedrooms downstairs. Have an elevator put in or at least leave a space for it that can be used as closet now but converted to an elevator later. Make 1-2 bathrooms handicap /wheelchair accessible.

            Don't get too hung up on tile color, type of hardwood and cabinet and granite / quartz etc. After a year nobody cares. Build decent without going overboard.

             

            Comment


            • #7







              200k for gut job on 1400 sq ft sounds low.  I don’t know what size you are planning to build if you tear down, but 600k sounds high unless you are planning on building a huge house.  In my area, cost for reno is roughly 200-250 per sq ft, possibly more depending on what surprises you find, what the structural engineer finds, etc.  Cost for new build sig lower due to no surprises or need to engineer work arounds.  Have you had a structural engineer look at the house, foundation, etc.?  Is it a classic house with charm and details that you want to preserve?  I would consider preserving a 1920s craftsman etc but if it’s just a generic old house tear down and rebuild will likely be more economical with less surprises.
              Click to expand…


              200-250 per sq ft for reno?!??!  That’s more than what builders are quoting for new build. That’s very good to know. Tho, this is not surprising.

              Structural engineer thinks foundation is decent, but the current house already has an addition (original original house was 1100sq ft).

              Not a classic house, hence, marketability for resale is not in the current house.  Most investor are interested in our lot only.

               
              Click to expand...


              Yes, reno costs more than new build.  With a new build, you are starting from scratch, no surprises to deal with.  Surprises costs money.

              I think new build is probably the better option for you in this case.  You can get what you want without being limited by the existing structure.

              Agree with Kamban's advice above.

              Comment


              • #8
                Things are probably different in my VHCOL area, but :

                Renovation costs more than building new, because you have to work around existing structures, and new problems are constantly found.  It's easier to just tear the whole thing down.

                Both will cost around 300 to 500 per sq ft, depending on how high end you go.

                A tear down is easier to get permits for and more a known quantity due to already existing utility hook ups and zoning.  Building on raw land can be problematic.  If you're working with a builder on a new subdivision those problems are less.

                I know 3 people  who bought new houses in a subdivision built by different builders.  One had no problems.  The other two each had major plumbing disasters as the pipes had been hooked up wrong.  One had sewage pipes explode into her townhouse.  The other had major leaks.  Neither was fully compensated.  Caveat Emptor.

                Do not live in the house while it's being renovated.  Just don't.   You will be miserable and will get divorced.

                I agree with making the house ADA compliant and making provisions for an elevator.   Bedrooms downstairs if it's not a ranch.

                Where I live, full finished basements are not standard.  Make sure you put one in, fully plumbed and wired, even if you decide not to finish it.  It doesn't add that much to the cost of the house vs a new foundation.

                 

                 

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