Before our call regarding the first budget, Shaun sent us a second revised budget. It was dramatically better. The first budget came it at $791,288. The second came down to $607,000. We were pretty shocked. Here was the detailed breakdown:
Second Budget Details
|Site Work||Budget 1||Budget 2||Change|
|Drywall and Thincoat wall||$28,175|
|Drywall and thincoat ceiling||$7,773|
|Interior doors Solid Core||$15,231|
|Closet Door System||$3,965|
|4 Fixture Bathrooms||$19,096|
|2 Fixture Bathroom||$3,177|
|Gas Fired Heating||$11,502|
|Hot Water Heating||$21,728|
|Exhaust Fan Wiring||$265|
|Hard Cost Subtotal||$551,846||$634,623||$466,000||-$168,623|
|x1.15 Location Factor||$634,623|
|Summit County Permits||$9,188||$9,188|
|Architecture Fees, Installment 1||$6,000|
|Architecture Fees Permit Set||$24,000|
|Architecture Fees Rough Framing Inspection||$15,000|
|Architecture Fees Completion||$15,000||$45,000|
|Soft Cost Subtotal||$156,665||$141,665|
|Hard Cost Subtotal||$634,623||$466,000|
|Total Build Budget||$791,288||$607,665|
It still needed some edits; for example, the asphalt driveway was deleted but without any allowance for an alternative, but it was dramatically better than the first version. So much so that we wondered whether it still represented a reasonable forecast. We wanted a budget that hit near our $600,000 plan, but we didn’t want an unrealistically optimistic budget that didn’t align with real life. Better to have a $700,000 budget and come in at $701,000 than have a $600,000 budget and come in at $701,000.
Are The Numbers Real?
We had a call with Shaun the next day to talk things over. Our big question was why the two numbers were so dramatically different. Shaun explained that the lion’s share of the difference was created by him taking less profit and doing more work. Instead of taking the best of the couple of bids, these numbers would require him to do a lot more work to police costs, particularly when it comes to materials, and hunt for subcontractors willing to do the work for something more akin to Front Range prices, as opposed to Summit County Prices.
He would also be taking a lower profit since we are still somewhat in the marketing phase of his business. He hadn’t been in the residential contracting business for very long, so didn’t have the long-established relationship with reasonable, reliable subcontractors he hoped to build in the future. That meant that hunting for the right subs and the right materials could mean our project going slower, but in exchange, he’d take a lower profit on the project. That all sounded good to us.
There were a couple of compromises. We dropped the asphalt driveway for recycled asphalt, which will mean some additional maintenance, but it’s something we could easily upgrade in the future without needing to make any other changes. We also planned to take the structural steel out of the deck, which could reduce the lifespan to something like 20-30 years, vs. 200 years, but at a significant savings. We decided to keep the wrap-around deck to the west, in part because it’s baked into the plans, and in part because it gives us the cocktail views to the west. For $10,000 or so, it seemed worth it, though we’ll keep an eye on it as we refine the budget further.
When it came to interior finishes, we talked about what standard the current numbers give us. For example, counter-tops can run from $30 per square foot to $130+ per square foot. Shaun explained that the current numbers should land us in the middle; not marble but not laminate either. That was broadly true for the other interior finishes as well.
He also explained that at some points we may have to pick up the slack with these numbers. If we can’t find a painter for the right price, we may have to have a painting day. Or spend a day cutting exterior decking. Though we won’t need to be framing or mudding drywall. That all seemed to fit with what we want to do (control the budget) and what we were willing to do. We could sacrifice a few weekends, but I couldn’t take a month off of work to do finish work. Overall, it was an encouraging call that made us feel like we were on the right track, and assured us that the newer, better, lower number was still a reasonable and achievable number.