Michelle Kaufmann Designs modern modular homes are quite cost competitive with other equivalent high-end, high-performance, architecturally designed homes. Construction time savings also offer costs savings as well.

The goal of the MKD Budget Builder is to help you start to develop a relatively realistic budget for your Michelle Kaufmann Designs modular home project, either a Glidehouse™ home, a Sunset® Breezehouse™ home or a Custom Modular home. The answer to the above question will vary depending on your budget when compared to construction costs determined by your preferences for an MKD design and finishes, your individual lot's characteristics, and the geographic location of your lot. The MKD Budget Builder will help you build a project budget, but the numbers you enter into your budget are based in large part on the amount and quality of the homework that you do for your particular building situation. In other words, there are a number of budget questions that MKD cannot answer for you yet, simply because we don't know enough about your particular project until we are in contract with you and finish Step 3 of the MKD Process. In the meantime, you can use the guidelines below to determine if you are "in the ballpark" to build an MKD modern modular home.

Overview

While MKD can quickly and accurately predict the modular portion of the project (factory construction costs) for standard floor plans, these costs will usually account for only about 50%-60% of your total construction budget. The other portion of your construction budget will be comprised of all site-specific construction costs—the foundation, utilities, and button up work, as well as transportation and installation of the modules—which can vary widely depending on your site and its location. Finally, there are also other “soft costs” involved, which are incurred before any construction begins and only some of which we can accurately predict. In both of these latter two cases, construction and “soft” costs that are specific to your site and location will need to be researched by you before you can know if you are really in the budget ballpark for building a Michelle Kaufmann Designs modern modular home. The MKD Budget Builder will help you make the first cut before you delve into your research project. (Note: The budget numbers below assume that you are building one MKD home for yourself. If you are a developer, interested in building numerous MKD homes, the numbers will be quite different. Contact us for assistance.)

Based on our experience of building the Glidehouse™ home over the past two years, we're finding that most Glidehouse projects are being completed for $175-$250/sf, all construction costs included for a typical home, for projects outside the San Francisco Bay Area or the Greater Los Angeles Area. For these and other higher construction cost areas, the range of total construction costs may be $225-$300/sf or more. This total construction cost range includes the factory construction for the home based on a standard floor plan, and assumes that all interior and exterior fixtures and finishes are standard, your lot is flat and has all utilities to the lot line, and is easily accessible by our delivery trucks. Note that while the lower end of this range will rarely be breached, the upper end may be, depending on any number of factors that are almost all related to your specific site. If your slope is steep and in a major urban area, your total construction costs will almost always exceed this upper range, and can be significantly higher. This will be true of any kind of home that you build on this lot.

The major variables in this range relate to the site-specific construction (foundation, decks, utility tie-ins, etc.) on your lot. Sloped lots are more expensive, as are lots that require a well or a septic system. Of course, your actual site-specific construction costs will depend entirely on what your local contractor will charge for their work (i.e., your local labor rates). This range of total costs will be a bit higher for smaller homes—most of the same infrastructure (HVAC, kitchen cabinetry, other high cost items) are the same as in larger homes (3br/2ba and larger), but $/sf costs are calculated based on a smaller building.

We don't have a lot of data yet to project the cost of a typical Sunset® Breezehouse™ or mkSolaire™ home (the first Breezehouse was built in May, 2005), but are estimating that it will be about $200-$250/sf, based on all of the above factors, for projects outside the San Francisco Bay Area or the Greater Los Angeles Area. For these and other higher construction cost areas, the total range of construction costs may be $250-$325/sf or more. Included in this total construction cost range is the $150-$175/sf factory cost, including construction of the Breezespace. The upper end of this factory construction cost range includes the folding glass Nanawalls at both ends of the Breezespace. The higher total construction cost range is due to the larger building footprint for the Breezehouse: thus all site costs will be higher.

A Custom Modular home by Michelle Kaufmann Designs may be more or less than the Glidehouse/Breezehouse estimates, depending on the exact nature of the design. For example, if your Custom Modular home has less glass than a similar sized Glidehouse or Breezehouse, it will be less expensive to build in the factory (wood walls are less expensive to build than glass walls). In all cases, we will not be able to predict how much your custom design will cost at the factory until we actually go through the Introductory Contract (Step 3 of the MKD Process), with a key element in the design process being your budget. Michelle Kaufmann Designs specializes in modern design for modular construction, and thus is quite adept at getting the most for your building budget. Having said that, however, if your Custom Modular home is designed using a similar architectural program as the Glidehouse and/or Breezehouse, it will generally be a bit more expensive to build as you cannot take advantage of factory savings from MKD standard floor plans. The exception to this rule is if you are a developer, and interested in building in volume.

After you complete your initial budget calculations, you may be saying to yourself, “I can build a new home for less than this!” That may be true, but in almost all areas where MKD homes are now offered, you will not be able to build a home to the exact same design and specification as an MKD home for less. Our experience with the Glidehouse in the San Francisco Bay Area is that it takes 30% more money and almost twice as long to build a site-built Glidehouse as it takes to build the exact same Glidehouse in a factory using the MKD Process.

Note that any modification of a standard floor plan will affect the cost and timeline of every step of the MKD Process, now matter how minor the modification. MKD clients who want to modify or customize standard floor plans need to be aware that the effects on your building budget cannot be estimated until the end of the Introductory Contract. If your budget is tight, sticking with a standard floor plan is one sure way to reduce both the budget, as well as the uncertainty about what floor plan modifications will have on your budget.

The Details

Please note that this overall range is for all of your construction costs, after the home is permitted to be built (please see below for “soft” costs, those incurred before construction begins). This range accounts for all construction costs, including:

• All factory construction costs. Included in the factory construction are all structural, electrical, plumbing and mechanical systems, all bathroom and kitchen fixtures, etc. In an MKD home, the finish coat of paint is on the walls, the flooring is installed, and all glazing is done before the modules leave the factory (except the Nanawalls in the Breezehouse). The factory cost will vary a bit by floor plan. Again, this factory construction cost will be 50%-60% of your total construction budget. If you include a lot of amenities or upgrades in your home, your total ballpark budget will be higher than the range. Note that major kitchen and laundry appliances are not included in the factory cost. The factory cost of your home—$140-$165/sf for the Glidehouse™ home, $150-$175/sf for the Sunset® Breezehouse™ home—will be lower than a site-built home of the same fit and finish. This lower cost often more than offsets the cost of transportation and installation, the only construction cost that is unique to the modular building process.
• Transportation and installation fees, to deliver and set the factory-built modules on your foundation. There are many variables that will affect the cost of transport and installation, including the size of the modules, state and local jurisdiction issues (which may require special permits), and last but not least the location of the factory in relation to your site (and the actual route driven—it’s often not the shortest route because of bridge restrictions). A good “ballpark” figure to estimate the transportation cost is $10/mile/load (a module is usually a full load). The delivery of 15’6” wide modules (an upgrade on all Glidehouses, but standard on all Breezehouses) will require extra permitting and pilot car costs. Also, note that larger homes will have higher delivery and set fees because they are comprised of more modules, and homes built on slopes or on lots with other physical constraints will require the use of a crane to install. Because there are so many factors involved, it’s almost impossible to give you a useful range of these costs, but they can be as little as a few thousand dollars for a small home on a flat lot near a factory to $50,000 or more for a very large home on a challenging lot far from a factory. Most standard 2- and 3-br MKD homes have been delivered and installed in the San Francisco Bay Area for $20,000 to $40,000. We have included these costs in the total construction cost ranges of $175-$250/sf for the Glidehouse™ home and $200-$250/sf for the Sunset® Breezehouse™ home listed above.

Some special notes about transportation fees:

• Many potential MKD clients in California are waiting for MKD to establish a relationship with a California-based factory so that their transportation costs are minimized. While MKD will continue to explore relationships with California modular factories, you should know that most modular factories in California do not typically do high-end residential construction. Rather they specialize in building modular classrooms and other commercial projects such as office buildings, motels, gas stations and the like. Also, it is very difficult for them to meet the price points that have been targeted by MKD, primarily because the cost of doing business in California is so much higher than in other nearby states. In fact, the cost of doing business for these factories in California is 20% higher than it is in Washington, and 30% more than it is in Oregon. Thus, while it may be more expensive to transport the modules from factories in these Pacific Northwest to California building sites (even in SoCal), that cost is more than offset by the cost savings in the actual construction process that is afforded by these factories being located in more remote, lower cost structure areas.

• Many other potential MKD clients, interested in living lightly on the land, do not like the idea of using additional fuel to transport their modules from a distant factory. The fact of the matter is that the majority of the construction materials that will comprise your home will be sourced in the Pacific Northwest, even if it is built by a factory (or a site-built contractor) in California. Usually, the cost of transporting construction material is built into the cost of that material at the point of sale closest to you, so you never see that cost. The modular factory, obviously, cannot do this, because they have to account for different final destinations for their product, and the transportation costs will vary widely for each project. Thus this cost is broken out. In the end, however, you are paying approximately the same transportation cost as though your home were actually built in California, either by a factory or by a site-built contractor. In fact, you are probably paying somewhat less, because you are paying only for the materials that are actually used to build your factory-built home, less the sometimes considerable costs for wasted, damaged or stolen material at the job site for a site-built home.

• Finally, in making your decision about whether to wait for a California factory to build your home in California, you should consider the cost of simply waiting. While the factories that MKD uses in the Pacific Northwest have generally held to the pricing structure since the beginning of 2005, the site-specific construction costs for homes in California, particularly in the San Francisco Bay Area and the Greater Los Angeles Area, have risen dramatically since then. MKD does have some prospective clients that have actually seen the overall cost of their projects increase far beyond the cost of transportation from a remote factory alone, simply because they are wanting to save money by waiting for a California factory. In other words, the increased cost of their site-specific construction has far exceeded the cost of transportation while they are waiting. And although there has been a slight softening in the real estate market in some areas of California, the demand for local construction services remains quite strong. MKD doesn't anticipate this inflationary pressure to be relieved anytime soon. Therefore, you must balance the continually-rising cost of local construction with the actual cost of transportation from a remote factory when considering whether or not to wait for a California factory to build your California home. It's simply impossible for MKD to make any prediction on when that will be, even though MKD continues to work hard to develop a relationship with a high-quality and cost-effective factory that is much closer to the major urban markets in California.
  

OK, back to the other construction costs:

• Site preparation, for excavation and grading of a building pad. If your site is steep, or needs retaining walls or special drainage systems, your ballpark budget will be toward the upper end of the total construction cost range.
• Foundation. An MKD modular home requires a stem wall foundation (a crawl space is required, a slab on grade foundation is not acceptable). If your foundation is on a moderately sloped lot, or if you would like a basement, your foundation costs will push your ballpark budget toward the higher end of the total construction cost range. If your building site is on a steep slope, you will definitely be above the range. Other factors may significantly affect foundation costs as well, including poor soils or unstable slopes. Note that the typical foundation for a standard Breezehouse floor plan will cost more than the same number of bedrooms in a Glidehouse, as the building footprint includes the large Breezespace. This is especially true the steeper the slope of the lot. Foundation costs are particularly difficult to predict without further investigation, and often the largest "surprise" cost of any building project. If your site is not flat, it's prudent to consider getting a soils and/or geotechnical report done as early in the MKD process as possible. These reports should have a foundation system recommendation based upon the soil and slope conditions. While the foundations will still need to be designed and engineered, the soils report will give your local contractor more information to provide rough budget numbers.
  
• Utilities. The lower end of the total construction cost range assumes that you are on city water and sewer, and that utility hookup costs are based on utilities being at the curb. If you require a well and/or a septic system, your ballpark budget will be higher.
• Button up. These are tasks completed by your local contractor after the MKD team has installed the modules on your foundation (a complete task list is provided early in the process). Usually this will take a local contractor a month or so to do. Most of our projects for standard 2- and 3-br floor plans have seen button up costs of between $10,000 and $20,000, but the final task list for your contractor will depend on which MKD home you build.
• Garage and decks. Though MKD can design and engineer a garage (or carport) and decks for your home, it is almost always more cost effective to have these built by your local contractor. Check with them to obtain an estimate. We have included the construction of a basic 2-car garage and small decks in the total construction costs ranges above, however costs for these items can vary significantly based upon site constraints and design.
• Landscaping. Our ballpark budget range assumes only that you require a driveway and sidewalks. Other landscaping should be included in your budget, but we do not include it here as other landscaping is usually not be required to obtain your certificate of occupancy. Steeply sloped driveways with retaining walls can be a significant cost factor in developing a site, regardless of the type of home you place on the site. When considering steeply sloped sites, you may want to discuss possible cost ranges with a local contractor with experience in sloped sites in that particular area.
  
• General contractor fees for site-specific construction. An MKD modern modular home is not a do-it-yourself project. The vast majority of our customers retain the professional services of a competent general contractor. General contractor fees are included in the total construction cost ranges above.

Again, all of the above costs are included in our total construction cost ranges listed above. Not included in this ballpark range of total construction costs are the following:

• Appliances (for the kitchen and laundry areas, you could spend a few or many tens of thousands of dollars, your preference)
• Solar or other “off the grid” energy generation systems. These costs can be estimated by an competent contractor, and are complete dependent on your current and anticipated use of energy, as well as the supply of energy (amount of sun, wind, etc.) in your environment.
• Lighting fixtures (pendant lights at dining room and kitchen island, all others included above), window treatments, and furniture
• Pools, hot tubs or reflecting pools. Pools and hot tubs are best designed by a local provider. Please work with them on obtaining estimates. MKD will work with the pool or hot tub provider to integrate the design with the overall project.
  
• Other landscaping (lawns, gardens, fencing, etc.)

These are all of the construction costs for your project, most if not all of which can be included in a construction loan. Before any permits are let to start construction, however, there are other “soft costs” incurred, many of which you may be able to include in your construction loan (or have them applied to your down payment):

• Reports. These are required reports necessary to work with Michelle Kaufmann Designs on your home. Included are a site survey and a soils report. There may be other reports required by your local jurisdiction, such as a geotechnical report, septic or percolation test, etc. The other reports you may be required to provide are generally determined by your local building and/or planning department. Please check with them for sources (and costs) of these reports.
• Architectural and engineering fees. Michelle Kaufmann Designs, in Steps 3 and 4 of the MKD Process, will design and engineer the entire building. These fees will total from $25,000 to $50,000 or more, depending on whether a standard floor plan is customized, the size of the home, and the slope of the building area (see the MKD Process for details). For all standard plans on flat lots the fees will be at the lower end of this range, and are half the fees charged by most architects for a custom home. For most completely custom modular designs, your will be at the upper end of this range, from 10% to 15% of the overall construction cost. Note that all Structural Engineering of the actual home is included in this range. Civil Engineering and Septic Design may be required for your particular site, and these fees are not included in this range. These services are usually contracted directly by the owner. Please work with a local provider to obtain cost estimates. Other engineering, beyond that which is required to obtain a building permit, may be required for your site.
• Local Permits and Fees. Michelle Kaufmann Designs will handle the permitting of the modular portion of your home at the state level (it should be under $3,000), but your local contractor will need to obtain permits for the site-specific construction on your lot, based on the stamped engineering drawings provide by MKD. Your local building permit will cover only the site-specific construction, and thus be less than a building permit for a completely site-built home. These building permit fees will vary tremendously by location, from a few hundred dollars in rural areas to many thousands of dollars in coastal urban areas. Depending on your site, you may also be subject to other local fees, such as well and/or septic permits, local impact fees (to cover expansion of school, water and/or sewer districts), etc. It’s incumbent on any prospective homebuilder to do their homework to determine the full range of local fees that will be required before any construction starts.

Taxes on your home will depend on your local jurisdiction. For some states there is a sales tax on 40% the factory cost of your modules. In California our sales tax ranges from 7.25% (the state tax, with no local add-ons) to 8.75% with local add-ons: you only pay 40% of this amount on the modules (this reduced tax often offsets a significant portion of the transportation costs). Often this tax will be included in other costs, not broken out as a separate line item. Be clear with your contractor from whom you purchase the modular portion of your home about how the state and local use taxes are paid.

Finally, you will want to budget for contingencies. Your lender will require that you have a contingency line item in your budget, usually no less than 5% and often 10% of all construction costs. This is to ensure that unforeseen costs do not cripple your ability to finish the project. Unforeseen costs can arise at any stage of the process, especially as the project may take up to a year to complete. For example, gas prices are much higher now than they were at the beginning of 2005. These will result in higher transportation costs than were budgeted at the beginning of 2005. Similarly, constructions materials costs keep rising (they rose almost 20% in 2004 and 2005), and will continue to rise due to the construction boom in the Gulf Coast states recovery process. While MKD and other contractors can refine estimates before construction actually starts, there are usually other unforeseen construction costs beyond anyone’s control that will arise during your project. It’s prudent to have a line item to account for these costs.

For More Information

When trying to determine whether an MKD modern modular home is feasible for you, we recommend contacting a lender first. They can usually tell you the same day how much you are qualified to borrow for a land and/or construction loan based on your credit record and credit score. Use this figure (and include your cash down payment amount) or the amount you are self-financing with cash, as your total budget maximum. Then build your expense budget using the guidelines in this document. Your total construction costs will most likely be in the range above. Add your soft costs, those that you will incur before construction ever starts to complete your budget.

For your convenience, we have prepared a budget template (in PDF form as well as a Microsoft Excel worksheet) where you can start budgeting your project (we may ask you to submit your budget before proceeding with the MKD Process). Please also note that a major goal of the Introductory Contract (Step 3 of the MKD Process) is to develop a much more refined budget (verifying numbers that you provide in the MKD Budget Builder Worksheet), including estimates from the factory for building, transporting and installing the modules on your site as well as estimates from your local contractor for all site-specific construction. These estimates are obtained after all design work is finished for your home, including foundation, decks and garage schematic plans, as well as a site plan. The Introductory Contract can usually be completed within 8 to 10 weeks for all standard floor plans, and the budget numbers derived from this effort will be based upon much more information specific to your site conditions and house design. However, as with any design and construction process, until the actual bids are received based upon the approved permit documents, all budgets are subject to change. If you make modifications to any standard floor plans, the Introductory Contract (as with all other steps in the process) will take a bit longer. While exposure to cost increases for the site portions of the project are similar to a traditional stick-built process, the factory-built portion of the project has been relatively predictable to date. This reduces the exposure to cost increases on roughly half the project as compared to a traditional stick-built process. A final budget will be prepared after all civil and structural engineering is completed in Step 4 of the MKD Process, based on actual construction bids and before any construction begins.

To start the process of building your MKD modern modular home, contact Marshall Mayer, marketing and sales representative for Michelle Kaufmann Designs, by providing details about your project (the inquiry form is on the MKD website, but your inquiry will be received and reviewed by LiveModern).

Also, be sure to subscribe to the LiveModern News to receive updates about Michelle Kaufmann Designs (free LiveModern membership required).