Second Budget

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 2Change
Footing Excavation$9,826$48,845$45,000-$3,845
Foundation Excavation$6,543


Sewer Trenching$12,843


Utility Trenching$13,262


Foundations



Footing Excavation$4,368$65,747$35,000-$30,747
Concrete wall$22,053


Concrete Slab$2,729


Asphalt Driveway$28,021


Framing



Floor$22,788$75,632$75,000-$632
Exterior Wall$27,571


Shed Roof$10,744


Interior Partition$4,664


Exterior Walls



Wood Siding$54,243$145,499$106,000-$39,499
Insulation Cavity$13,851


Insulation Exterior$11,115


Windows$37,566


Entrance Door$4,190


Sliding Door$2,900


Garage Door$2,656


Roofing
$19,371$21,000$1,629
Shed Roof$16,844


Interiors
$104,543$53,000-$51,543
Drywall and Thincoat wall$28,175


Drywall and thincoat ceiling$7,773


Interior doors Solid Core$15,231


Closet Door System$3,965


Flooring$23,484


Subfloor$4,619


Stairways$7,660


Specialties
$90,531$60,000-$30,531
Kitchen$20,263


Range$2,965


Range Hood$1,440


Dishwasher$1,370


Refrigerator$1,685


Sink$1,690


Garbage Disposal$519


Fireplace$6,047


Deck$42,744


Mechanical
$63,828$47,000-$16,828
4 Fixture Bathrooms$19,096


2 Fixture Bathroom$3,177


Gas Fired Heating$11,502


Hot Water Heating$21,728


Electrical
$20,626$24,000$3,374
Electrical Service$1,868


Lighting wiring$1,936


Switch wiring$3,080


Receptacle Wiring$3,057


Disposal Wiring$81


Dryer Circuit$129


Exhaust Fan Wiring$265


Light Fixtures$7,520







Hard Cost Subtotal$551,846$634,623$466,000-$168,623
x1.15 Location Factor$634,623







Soft Costs



Civil Engineer/Survey$2,500
$2,500
HERS Consultant$2,200
$2,200
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
Profit$27,592
$27,592
Overhead$55,185
$55,185





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.

Compromises

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.

Owner Work

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.