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  • Writer's pictureoriane

Dollars & Sense: Part II

Updated: Aug 22, 2022

I am excited to announce that we are under contract with a General Contractor and have finalized a (workable) budget for the project.


There have been many sleepless nights over the last several weeks but we are officially on the way to making this project a reality. All the major budget updates below!

 

Negotiate like you're at The Souk in Marrakech

As you may recall, we ended up bidding our project out to 4 separate General Contractors which I believe allowed us to get a fairly accurate read on who was full of BS vs. who appreciated our design plans while giving us a fair price.


We ended up paring down to 2 general contractors we felt we could comfortably work with and had several meetings with each before making our final decision. When working with general contractors, especially during the bidding phase, ask for transparent pricing on the bids for all subcontractors each GC would be selecting for our project.

This ended up being quite helpful since it gave us an "apples to apples" comparison for a lot of the trades.


Push your general contractors to find areas of cost savings!

We were able to shave off $37K from the original proposal our GC presented to us by literally saying "We need to come in $40-$50K lower than this."

You'd be amazed at how "creative" they will get once you put on a little pressure.


Don't be afraid to ask them to discount their fee. If they really want the job, they can and should do that for you. I know "negotiating" is an uncomfortable tactic, but I really can't stress how beneficial it can be to the bottom line.


Ask for references.

Dollar amount aside, this is what sealed the deal for us. Ironically, we knew one person from each of our final GC candidates reference lists. This was an incredible twist of fate (which I of course took as a sign of good luck from the home reno gods) since we felt like we got a sincere review of each GC.


In the end, we signed a contract with the GC whose budget was substantially lower than his competitor. While this was a big budget win for us, it's also worth noting that his references emphasized he stuck with the budget and anticipated timeline.


Conclusion: You can't put a price tag on honesty and timeliness, my friends.

 

So, where did the numbers land?

The "working budget" -- and I'm no fool, and know this is bound to fluctuate (more than likely upward)-- is listed for you below. A few quick things to mention:


1. We negotiated. I mean, we literally sat through meetings with excel spreadsheets comparing each line item. When we saw pricing we thought was abnormally high (this might be hard to identify if you aren't as familiar with materials costs) we would (kindly) ask for more aggressive pricing or a bid from another subcontractor.


2. We were meticulous. We wanted the GC to know every detail in the house down to our trim selections and where we would install TVs, hopefully safeguarding against "big surprises" after the preliminary budgets were established. For example, the staircase we had designed references the 1900s newel and baluster combo that would have been original to the house. I knew it would be more costly since it was "out of the ordinary" by todays new construction home.

To avoid a jump in budget over staircase design, I made sure the GCs were quoting what we wanted, not what they were used to doing. Spending extra time, which can add up to a lot of extra time, speaking with subs (subcontractors) and preparing emails with photos to make sure everyone was on the same page literally paid out.


3. We underestimated. This part is no surprise to anyone who's balanced a large budget before. The market can change quickly, there are unexpected variables, your information is bad, etc.

For us, the budget was well above the original number. This was a shock to the system and for a short time made us feel like maybe we shouldn't proceed. After we sat down and reran the numbers, there will still a clear financial advantage to move forward even at a higher than anticipated cost.

*Currently, the budget does not include a new garage, backyard fencing or landscaping which we will plan for "phase 2".

 

So, where did we end up?

This is the budget for a total gut 2 flat conversion in Chicago, IL as of September 2020. Total square footage, roughly 3,500. Drum roll, please!


Demolition: $15,000 approx.

This includes the interior of our house on 3 floors as well as the removal of the back enclosed porch, and garage.


Excavation: $15,000

This will be the removal of the existing concrete garage slab and concrete foundation beneath the back porch, as well as the backyard sidewalks.


Concrete: $24,000

This is the new foundation for the addition including new footings and a new garage slab.


Structural Iron: $6,000 approx.

The New support beams in the basement and steel stairs into the backyard.


Framing Lumber: $17,000 approx.

This is the materials for new the addition and interior framing, which includes the new beams.


Carpentry/ Framing Labor: $26,000

This also included the install for all the windows and doors + trim.


Windows & Exterior doors: $21,000 approx.

This is the wood, aluminum clad, double hung with grills. Including, 27 windows + 1 solid exterior door, and 2 french doors.


Masonry work: $9,100

This includes the removal of brick for the exterior wall openings, and bricking in 6 windows.


Plumbing: $23,000 approx.

The install of completely new plumbing throughout all 3 levels of the house. All rough in materials included in estimate.

*not included---my crazy expensive taste in faucetry....ie, shower systems and lavatory faucets. We did everything in unlacquered brass which is pretty pricey. This ran us another $5K which was not included in the GC's numbers.


Heating & Ventilation: $17,500

Our two new furnaces, new AC units + new ductwork.


Electrical: $23,000

Install new electrical service as per plan, plus install of all new light fixtures.

*not included....my crazy expensive tastes in lighting...this number is still TBD


Roofing & Siding: $18,000 approx.

We went with Hardi board siding and a new rubber roof to match the existing roof, new gutters and downspout for the addition.


Millwork: $26,000

This includes all the new interior doors, casings, moldings, and hardware.*we are considered "high complexity" with the trim package, you could definitely do less here.


Trim/Millwork Labor: $15,000

This work will include installing new interior doors, casings and baseboards. We will have built-ins, and install new hardware for all the doors, bathroom vanities and kitchen cabinets.


Drywall: $18,000

This will cover the basement, first and second floors.


Insulation: $12,000 approx.

Since we will be gutting the first and second floors to the studs, new insulation will be put in on these floors, and the basement where needed.


Painting: $16,000

Includes doors, casings, all trim, walls and ceilings with Benjamin Moore, using 3 coats.


Hardwood flooring: $13,000 approx.

We went with 3 1/4" white oak hardwood flooring on the first and second floor.


Stairs: $13,000 approx.

Reference my above note regarding its 1900s reference, so this cost is per our design and may not be the considered standard for a new staircase cost.


Tile: $21,000

This is the installation and allowance for tile materials, including labor to install tile in all bathrooms in the basement and laundry room.


Countertops: $10,000

This was the “GC allowance” which included quartz for the bathrooms and granite for the laundry room and kitchen.

* GC allowance-the number the general contractor estimates into the budget that you will spend on a specific material. This is often based on other projects. If you spend less than the allowance budgeted, you get the difference in cost back. If you spend more, this is an out of budget expense.

We are going to do marble in a lot of these spaces, so we know we will be over the $10,000 allowance.


Glass, mirrors and shower doors: $3,500

This number will also vary for each build, and will cover the large walled mirror in the master bathroom, and the shower doors for the master bath and basement shower.


Kitchen cabinets: $23,000

We have chosen fully custom white oak, quarter sawn cabinets that are inset style drawers. We have 22 linear feet of cabinetry on one wall, and 12 feet of cabinetry on the island. We do not have any upper cabinets. This also includes the panels for the dishwasher and frigid.


Pantry Cabinets: $4,000


Appliances: $20,000 approx.

The appliances in the kitchen were something I desperately did not want to compromise on. This number is high because I wanted to budget for the higher end.


Bathroom Vanities: $5,000

The bathroom vanities will all be white oak, some will be double sink, others single. 2 bathrooms in total.


Master bathroom builtin closets: $3,000

This is probably on the low-end of closet builds and is in reference to the INTERIOR specs for the closets. Our closet will span the space of the bathroom, which is currently 18ft.


Closets interiors (including laundry room): $3,000

Basically, this includes a shelf and a rod for each closet. We will beef the closets up with closet systems down the line and will likely go with Elfa or Ikea due to options and affordability.


...and the unsexy expenses you don't think about....


Low Voltage: $5,000 approx.

This is the hardwiring for your internet, speakers and home security systems.


Construction Dumpsters: $2,000

An annoying but very real cost you have to plan for.


Temporary fence: $800

This is required by the city of Chicago, and I would assume many others, during construction. We were able to save a little money here by keeping our back yard fence on the sides and only use temp fence for the back of the yard.


...and finally, the biggest expense of them all....the General Contractor fee...


GC fee: $60,000.

Make sure you understand how your GC manages their fee. In our case, we did a flat fee for their project management services, which means this number will not fluctuate. But a lot of times this will be structured as "Cost Plus", meaning that if your budget/expenses go up, so does the GC fee. Generally speaking, you can expect to spend between 10-15% of your overall budget on these fees.

 

I again want to stress that there are many high end finishing choices being made with this budget and you could certainly save several thousands being more conservative in areas.


I'll let you all whip out your calculators to do the final tally here, but what we can all agree that this project budget is quite a bit larger than what had originally planned and discussed. Without getting into the yawn worthy details, we did end up deciding to finance this project through a construction loan since we were able to get an excellent rate which actually lowered the interest rate on our original mortgage.


Accordingly to the meticulous excel spreadsheet work Chris has upheld throughout the bidding process, this puts us at roughly $183/sqft. My hope is that this paints a realistic picture of the costs associates with a project similar to this for anyone out there looking to do something similar.

Its certainly information I'd have liked to have!




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