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By David in Greenville, SC on 3/29/2010


In another thread in this category about basements, Kenneth makes an excellent point about the pitfall of owner-builders not knowing their limitations. We all need to know our strengths and weaknesses and plan accordingly. However, as Kenneth rightly pointed out, far too many owner-builders seem to think they are supposed to be experts in every aspect of construction and try to avoid hiring expertise when needed. Also, the idea that self-work is not only the only way to really save money but the best way to get a quality job seems to be promoted more and more here as well. While you certainly don't need to do a job for a living to do it well, you do need to know the fundamentals well and be confident in your abilities. Many trades don't appear to be that difficult, but remember, a knowledgeable professional with the right tools and great experience often makes the complex look like child's play!

Another thing to keep in mind is that The Owner-Builder Book is first and foremost a guide about how to act as your own general contractor. It is not meant to make you an expert in any area of actual hands-on construction. Nor does it promote self-work as the only or even the best way to save money on your project. It starts with the premise that simply eliminating the general contractor will save you the single largest sum of cash there is to be saved on a residential construction project. And, in all but the most extreme cases, this is true! When it comes to self-work or trying to manage a portion of the project you don't understand fully, you will never save significant money if work has to be redone!

What you have to ask yourself is are you really capable of completing the work within the time line you have established and to a level of quality you would expect if you were paying someone else. If you have your doubts, then don't do it. Also, if you are unsure of how a certain portion of your project should be done to attain the highest performance/quality for your budget, then seek help. A two-hundred-dollar consultation is far better than a ten-thousand-dollar mistake!

Bottom line is that as I look around this forum I all too often see perceived savings as the primary motivator in the decision being made. Unfortunately, little attention seems to be paid to the value of your time at, say, your regular job where you may make more than you save by doing a project yourself, but take the time off anyway. Or to the value of your peace of mind in knowing that good advice, even at a price, has helped you build a safe and quality home. Owner-building is not defined as building a home for the lowest possible price. It doesn't require a misguided foray into self-work that one may know but doesn't have the time to do or doesn't do well! Nor does it mean you have to know it all (most GC's don't!) to get the job done. Owner-building simply means using all the resources available to you to act as your own general contractor. This is what The Owner-Builder Book actually teaches, but this seems to be forgotten when the chance to save a buck at all costs presents itself!


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By David in Greenville, SC on 3/30/2010


I started this thread to make a point about the basic nature of owner-building without taking over another thread. However, I didn't just want to get on my soapbox about the slippery slope of pursuing a few dollars' savings at all costs! Rather, I would like for folks to post real bargain strategies they used or know of, so others here might possibly benefit from their experience. Of course, it would be most helpful to describe the specific situation, so that others can judge the feasibility of this approach and whether it applies to their situation or not.

One strategy that I thought of after reflecting on a situation a friend of mine was in was to get as much of your project done up front as possible. I know the temptation is strong to just build right away and leave some part of the home unfinished for later completion. Or, possibly to add to it later. However, if the real goal is saving as much money as possible, this may not be the best path to follow. I'll use my friend's home as an example.

In 2004, a very good friend (best man at my wedding - good friend) and his wife decided to build their home. After reviewing their initial plans from a local designer, I sent them a very extensive revision as I knew what they really wanted from years of hearing about it and seeing their plan book and magazine clippings. In the end they ended up using my plans but there were some things they wanted to change. They wanted to decrease the size of the living room to get the house under 2,400 square feet. Why? Well, this is the magic number my buddy decided he could afford even before consulting a builder! They also wanted to remove the sun room from the back of the home, as they thought that would be too expensive even though they really wanted it and had no idea if it would cost too much or not! Finally, they decided that the half bath near the entry needed to go because of perceived expense. I tried hard to convince them to build as originally drawn. As did my friend's father-in-law who is a professional remodeler in their town. No, it wasn't my home but I pushed anyway because I knew the original plan suited their real lifestyle and that later they would end up complaining about what they should have done instead of saving a few grand up front. Worse, I figured they would end up remodeling later at huge expense! However, they were insistent, so I redrew the plans. They did make the concession of submitting both sets of plans to the builders they interviewed. The average cost difference between the plans from four builders was $11,200 or about $67 a month at the going interest rate of the time. I'm certainly not one for basing buying decisions on monthly payment, but you'll see the point in a minute!

Of course, $157,000 sounded better than $168,000 so they built the smaller home without the half bath or sun room. Although they very much enjoyed their house, within a year the complaints of not having enough space in the living room began. As did the gripes over not having a half bath for guests, as these two people entertain more than any couple I know! As for the sun room, well, barely two years later, they borrowed nearly $20,000 and had a white-walled sun room built along the back of their otherwise red brick home! Yes, it looks as tacky as it sounds. But it gets worse. At 11% interest for 10 years the $273 a month payment is more than four times the amount they would have spent extra per month, originally. Plus, the total cost of interest drove the real price of the sun room to nearly $33,000! Three times the cost to have the sun room of the original plan integrated seamlessly into the house, plus a larger living room, plus a half bath! About two years ago, they wised up and paid off the loan, but now are talking about building a new home to address the self-inflicted shortcomings of this one!

When something like that is written out like it is here, it seems like an obvious dumb mistake. However, when people get caught up in trying to save on up-front cost without a keen eye to the future, it is easy to make these kinds of mistakes. Keep in mind that prices of materials and labor almost always go up and when a contractor has to integrate new work into what he will consider "old" work, it always costs more. Also, future code requirements could cause unforeseen problems and expenses. Not to mention the fact that very often, the future finish work never gets done. Meaning you actually spent more for your home than you needed to because you built extra space that was never utilized. Yeah, it happens, and it happens to plenty of people who just "knew" they would get around to it "someday." One more thing; wouldn't you rather enjoy a space for the life of your home rather than having a project consume your life at home?

Certainly there are very good reasons for building unfinished spaces and many will be put to good use in the future. However, from a cost savings standpoint, unfinished spaces aren't free upfront, always cost less to finish when the work is initially being done, and always cost more than you think to finish in the future. So, finishing as much of your project in the here and now is very often the least expensive way to go, even if the initial numbers look a bit uncomfortable at first!


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By Tim in North Pole, AK on 4/20/2010


David,

You bring up some really good points for all to consider. Some jobs just need to be done by a professional, because it's just too time-consuming for the amateur, and the learning curve is too steep. Speaking for my wife and I, we're building our own house because we want to own a house free and clear in much less time than would be possible otherwise and without paying out thousands in interest. Equally as important to us is the quality of the workmanship and pride in accomplishment when it's finished. After touring many newly-built homes, we were disappointed in the way a lot of the houses were built. Generally they all looked nice, but when looking at the details you could tell the work was done quickly without much regard to quality. We also want to build custom features particular to our lifestyle without paying through the nose. 

Tim

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By David in Greenville, SC on 4/20/2010


Hi Tim,

Well, it sounds like you and your wife are doing things the right way. Owning a home free and clear is one of the most freeing things you can do both financially and psychologically! And, any financial 'expert' who tells you differently is not much of an expert!

I understand how you feel after touring all those new homes in your area. It's the same way here and, really, all around the country. Speculative homes are built to bring the builder as much profit as possible while requiring as little time and effort as possible. A scenario like that always compromises quality to some degree! However, if you get the chance to tour a genuine custom home built for a particular individual to meet high expectations, then you will usually see what a certain builder and/or subcontractor is really capable of. If you still see compromised quality in a home like that, then don't hire whoever did that work!

Anyway, sounds like you guys are on the right track and I wish you good luck with the construction of your home!


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By Tim in North Pole, AK on 4/20/2010


Thanks! There are some great custom builders out there, but they're hard to come by. I know it will be a difficult task to custom-build my own home, but being raised in a poor family taught me to appreciate the accomplishment of hard work, especially when it's owned free and clear.

Tim

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By Jeff in Hartland, WI on 4/23/2010


Great thread.  I agree that it seems that the main reason for most folks to owner-build is to save money. That might be the most common initial motivation. But I think that there are really as many reasons to build your own home as there are owner-builders. In my case, I wanted to build on my own, because I wanted more house than I could get for the same price with a builder. I wanted more control over the process, and I wanted to do it because I'd never done it before. Generally, I like to create things. My hobby is woodworking, and I love creating furniture, built-ins, etc. This just seemed like a natural extension.


But don't get me wrong, I have absolutely no doubt that an owner can almost always build an identical house cheaper than a builder can. But the house the owner builds isn't the house a builder would build. Did we really save money by building our own house? No. But we definitely got more house for the same money. Our budget was our budget. We would have spent the same amount on an existing home, on a home built by a builder, or on a house that we built ourselves. Because we built the house ourselves, we got exactly the house we wanted, the features we wanted, the layout we wanted, the materials we wanted, and the construction techniques we wanted, in the location we wanted, for the price we wanted (almost). We wouldn't have gotten all of that any other way. 

I believe an owner can save money in three ways by building their own house: 
  1. Removing the project management and builder profit from the cost of the house.
  2. Saving on material costs by smart shopping. 
  3. Saving on labor costs by doing work themselves. 
I managed the project--which saved me about 10 to 15 percent of the cost of the project. I also did the majority of "finish" work myself, which saved me another 10 to 15 percent. I installed the hardwood floors, installed structured wiring, installed about half of the tile, milled my own trim work and did the majority of finish carpentry, caulked and painted both the interior and exterior, and with the help of family, did the staining and varnishing. Would I have gotten better results by hiring professionals for each of those trades? Almost definitely--at least for most of the trades. I also would have saved a lot of time and sanity. But then I couldn't have afforded the house I wanted. I would have had to sacrifice on the size of the house, the materials, the location, or some other aspect to pay for all that labor. 

I'm continuing to take a similar approach with upgrades after the fact. I'm finishing my workshop now, and doing even more trades on my own. I just finished wiring and installing drywall, and now I'm mudding the drywall. Once it's done, I'll mill and install the trim, and build built-in tool cabinets. I expect that 900-square-foot workshop will cost me less than $2,000 to $3,000 to finish. I'll do the same range of work in the rest of the basement, and I'll bring our finished workshop/basement in at less than half the cost for twice the square footage as many of our neighbors. On these projects, I'm saving money. 

Jeff

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By David in Greenville, SC on 4/27/2010


Some good points raised so far. Thanks for the input!

Two of the most popular topics discussed here are saving money and energy efficiency. A third topic that's not far behind is being environmentally friendly. The methods for achieving the goals of these topics are virtually unlimited and discussed at length on this forum. However, there is one method for attaining some level of all of these goals that is rarely discussed directly as an option. It works in every case and in both the near term and the long run. It is simply REDUCING THE SIZE OF THE HOME!

Now, now, before you go get your torches and pitchforks to hunt me down with for uttering such blasphemy, please understand the following. I believe that it's your money, your home, and your life; build what you want! However, there is no denying the fact that all things being equal (are they ever really?) a smaller home costs less to build, less to own, and less to maintain. It also uses less energy and typically less water. And, whatever resources you use to build your home with, a smaller home will simply use less of those materials. Please understand, I'm not suggesting that anyone build a one-bedroom one-bath hovel. There is no point in building your own home if it doesn't meet your needs and satisfy at least some of your wants. What I'm suggesting is people take a second look at what they "think" they need and see if there is any way you could live without it happily ever after. For someone building a 2,000 square foot house, it may be tough to find any wiggle room. But as square footages climb to 2,500... 3,000... 3,500... 4,000 square feet and beyond, most people have entered the realm of want and whimsy versus actual need. I would certainly never fault anyone for building what they want. However, in a forum called "construction bargain strategies" I felt it was important to point out one of the most effective cost-reduction and energy-saving methods out there. It's probably also the one people want to consider the least.

On the other hand, I have heard more than a few people say something like this. "Well, we found the plans that have everything we want in a home. There's more room in it than we really need, but I'm sure we'll find something to do with it." That's in addition to the couples I know who have 2,800 to 3,700 square-foot homes that don't have any furniture in at least one room and basically "invented" a use for other spaces just because they had them. In other words, if they didn't have the space they wouldn't miss it! And most will tell you so! How much money in construction costs and additional energy and maintenance savings could people in these situations actually save? Of course, after the fact it's hard to quantify. But over the course of, say, five years, it's not hard to imagine $20,000 plus, all costs considered. And that's for the home with the least unutilized space! Plus, that's just the direct cost to the homeowner. That doesn't take into account the reductions in natural resources needed to provide energy if these homes were actually the size the owner really utilized.

I understand the desire to have more than necessary. We all have a little "what if" running through our veins, and I'm no exception. However, I've reached the point where I know what I absolutely will use regularly. What I will use enough to make it worthwhile to include in a home. And, what I dream about but know if I really had it, I would never make enough use of it to put in a mortgage! Sure, I will have at least one "what if" room and I wouldn't mind a walkout basement. But what I would like more than a basement or "bonus" room (like it's free) or dedicated home theater is a home I can easily afford. Preferably, a home I can pay off quickly. As I have said in previous posts, the home I have designed for myself meets all my needs, includes my most desired wants, and includes nothing I don't want! It is as small as I can be comfortable and happy in for a long time to come. I have two alternative plans based on the same basic layout in case of site issues or an unforeseen increase in budget : ) But those are also as small as they can be and still be useful, livable, and desirable. Oh, by the way, they range in size from 2,430 to 2,890 square feet, so we are not talking 1,000 square-foot 1920's cottages here!

This isn't an idea everyone will like or be able to incorporate. But it is an effective "construction bargain strategy" that will reduce your upfront cost as well as virtually every long-term cost associated with home ownership. Something to consider!


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By Pat in Arnold, CA on 5/3/2010


We are right in the middle of trying to take the step to start construction or just to forget it. It's NOT encouraging when foreclosure properties (some brand new energy-efficient homes) are running $76/SF, and the price to build is at $165/SF. We can buy a new foreclosure for $308,000 on five acres, and 2,750 SF. The price to build our home (bids are just about all in) is just under $700,000 for 2,100 SF on 2 1/2 acres. It's craziness. The foreclosure has top-of-the-line everything, including solar hookup, high-end windows and doors, slab granite everywhere, etc. However, the lot isn't what we would like. These kind of prices make it very difficult to build.
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By Jo-Lynn in Issaquah, WA on 1/24/2011


I've always thought that one of the most important traits of a successful owner-builder is to know what you don't know, accept that and be realistic about needing to have outside assistance to do those things you can't reasonably (physically, experientially, wouldn't enjoy so wouldn't do the best job at) do yourself.

My husband has been disabled for the past 6 1/2 years. We're about to build the house we'll need to stay in until we can't anymore, so I've spent a ton of time (years!) thinking about what we need, what works, what doesn't work, how my physical capabilities will likely change over time and result in needing to do things differently, etc. Those things are accounted for in our design. We couldn't have gotten a non-custom home to include those things, at least not at a cost we could afford. That said, for us it's about getting more house than we could afford otherwise.

I'm a good judge of character and I understand that shaking a sub's hand and getting along with them over a conference table is nothing like dealing with them on a job -- it's also no substitute for checking all of their references to a fine fare-thee-well. So I'm more than willing to do due diligence now and reap the benefits in the finished product. Can I paint? Yes. Can I lay tile? Yes. Can I install cabinet accessories? Yes -- so I will. But I know that I'm not a finish carpenter, roofer or framer, so I would never attempt those things even though I know there would be a huge savings. I love to save money, but if I were to be unhappy with the house and its finishes, I would kick myself daily and that's no way to live. 

I think I'm pretty realistic -- I will be happy to put in significant oversight effort to save the money that would have gone into the GC's pocket and I'll use many of the strategies I've read in The Owner-Builder Book to get the best labor prices I can as we move along the timeline. Many of the subs I plan to use have made recommendations of other trade subs (I will vet them well before using, but it's at least good to have names of people these good folks aren't afraid would harm their reputations) and have offered tips about timing of reaching out to various trades to maximize savings. I plan to realize every penny I can from shopping smart and obsessively -- mostly online because of the 9.5% tax here in our area. To be able to shave that nearly 10% off wherever possible will also be a big help. 

You raised some good thinking points -- thanks!


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