The bank I am using is a local bank, which seems to be the only one that will still allow an average guy like me to get a construction loan and be the general contractor without a builders license. To be clear on this, since the housing bubble came crashing down, banks have significantly altered their lending practices so if you are reading about the great experiences of owner builders be aware that things have changed in the last couple years. Most big banks will not give loans to owner-builders anymore unless they have a builders license. If you are going to find one, it's best to start with local banks. I called almost every bank in our area and found one, which happened to be the same bank my Dad got his construction loan from and happens to be in the same town as we are intending to build. Kalamazoo County State Bank is reviewing our loan request right now. One of the things I love about small communities is that you are more than just a number to them. I happen to know the CEO of the bank and went to school with the children of the board members. So we hope to get a phone call next Tuesday telling us we're approved for the loan and then we can start getting really cooking on this.
Why does it take so long? My last post here was nearly a month ago when I was lamenting the length of time it was taking to get contractor bids for the shell of the house. A lot of those issues are still valid. Builders simply don't move very fast and, while they don't have a lot of business right now, all the building trade workers have contracted their businesses. So even though there isn't a lot of work, there's a lot less people out there to do it so it still takes a while. The perception is that you can throw them a bone and they'll snap it up like starving dogs and that is simply not the case. Like in many other industries, quality is winning out, so a lot of the companies who are noted for quality work have plenty while those who are not are actually more desperate. For the entire market, that is a good thing. During the housing boom, just about anyone who could pass the test for a builders permit was out there calling themselves a builder when they actually knew very little about building. This pushed some good quality builders right out of the market and into other markets like remodeling, high end, luxury housing, special trades like cabinetry, and so on.
I contacted 7 builders on the job for the shell. Some people would question if I'm really an owner-builder if I am getting the entire exterior done by someone else. However, one of the first things anyone will tell you if you are going to be an owner-builder is to know your own limits. While I am confident that I can do most of the exterior work, I can barely find time to post on this blog, so roofing, siding, and framing a house in a timely fashion is out of the question. The exterior work needs to be done fairly quickly so it doesn't spend a couple months exposed to the elements. That's why I've got a builder doing that work. Based upon the first quote, if I had been able to do it all myself I would have saved about $40,000 in labor and contracting fees, so it's not chump change to have this all done. That number includes excavation, foundation, framing, siding, deck, roofing, and driveway. If I have someone else dig my drain-field and sewer that will be roughly another $3000. Those are just labor costs and it equals about 1/2 the cost of the materials. So if you are trying to estimate cost and you are just trying to ballpark the numbers, take your building plan to any building center. They can give you an estimated cost for materials, then multiply that by 50% and you'll get a rough idea of the labor cost. Those figures can change by area, but for Southwest Michigan I've found that to be fairly accurate.
Other things I have explored but gave up on were things like metal roofing. I have been told metal roofs cost about 3x the value of a traditionally priced, dimensional-shingle roof. That doesn't factor in lifetime or anything like that, just straight cost which is not truly an apples to apples comparison. What I found in reality is that for our roof, which is roughly 50 squares, it was going to cost about $25000 just for materials. There are also many things to consider before going that route. For instance, steel roofs, while quite durable, are not warrantied against rust. Any time you cut or scratch the roof, it will rust eventually. Other materials are not as durable, but resist rust and are cheaper. You also have other considerations like underlayment, type of fastener, and so on. If you want to put a nail right through your roof to fasten it like you're building a barn... be my guest. After all, it's your roof and your house and that is the cheapest way to go. In the end, we're going to do a traditional, 30 yr dimensional shingle which will probably last 12-15 years, but then we'll have to make the decision again if we want to go another 15 years or drop the money for a metal roof. Who knows, the technology may be 100% different by that time. I did find a fantastic company in American Metal Roofs and they would probably be the company we'll use if we decide to go with that. But it's a bridge we'll cross when we come to it.
In general, that's the philosophy we are taking with most of our our decisions. If it can be easily replaced, we're going with the lower quality option and choosing to replace it in the future. That means hollow core doors, Ikea kitchen, gravel driveway and so on. A lot of owner-builders thumb their nose at decisions like that, but here's the deal. If you're like me and you don't know for sure that you're going to be in the house in 5-10 years, it's silly to spend the money on that stuff because you're not going to get it back if you have to sell it. Eventually, we'll put in nicer cabinets and solid doors, but it's simply not something we're prepared to do right now.
We did have one minor setback. We had an overhead, bare wire running across the property which we thought we could just have the power company move. To do that it would cost another $3-4,000 plus the cost/time to remove the trees. With the regulations today, you should basically remove the trees that are near power lines because they are eventually going to die anyway. New regulations require branches to be 20' from the line which means they have to cut significant parts of the tree away. You might as well cut the trees down and replace them with shrubs that will grow to be less than 10' tall. So we have the decision of moving the house about 20' to the north and east, which will extend the driveway but possibly require less in the way of excavation... or we can leave it there and cut down a bunch of trees and spend extra money to have the line moved. Moral of the story, pay attention to what is overhead when planning the place to put your house on your land. It's not cheap to move it.
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