Pinching Pennies

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Everyone has a different idea of what affordable is. I know everyone will want to know the cost of our project. I will be posting our detailed budget within a few days. Off the top of my head I know that the total cost of construction will be $200 s/f (including land and permits). Single-family homes go for $250-350 s/f in this area. So, if we're able to complete this project at our proposed budget, it will really be a low-cost solution and a great investment. We'll also be living in a great modern home, too!

We've spent a lot of time working over our budget. This has been the most important aspect of planning our home. In fact, it's been our whole life for about four months. We researched our budget by taking bids, contacting various agencies, consulting our contractor as well as the using the means book In the end, we used the highest bids for the site work and factored them up for a cushion. The most important part of figuring out our budget was learning about the construction and permitting process so we were aware of all of the elements that are required to complete our home. David and I are always worried that we've left something out and it will blow our budget.

• Using the Free Advice and Resources Available at the LiveModern and FabPrebab Message Boards:
  • I was remiss in omitting this from my orignal version of this blog entry, so I'll make up for it by listing it at the top. Through LiveModern and FabPreFab, I discovered that this method of building was available. Through these communities I was able to access professionals such as architects, builders, artists, designers etc. The message boards, although relatively new, are chock-full of great, practical information for modern building and designing.
• Building Modularly
  • We are saving a lot of money per square foot on the structure. The approximate cost of site-built construction in L.A. County is $120+ s/f (for the structure only). Our project will run approximately $50 s/f. But that does not include cabinetry, appliances, lighting, flooring, siding, paint, sinks, delivery, engineering, design, craning, stitching of the modules, exterior paint. We decided to add those things on site so we would have more control over the cost and the design. If you add all those things the cost is around $90 -100 s/f. I can get more definite numbers when I post our budget. Also, keep in mind that there are fixed costs such as soils reports, the foundation, permits and the cost of bringing in the utilities.
  • Our construction loan requires that we pay interest on the loan while we are building. The exact amount is 1% monthly on whatever has been drawn from the loan. So, the faster we complete the home, the more out-of-pocket money we save.
  • In the long-term, building modularly is cheaper too, because modular homes are very insulated. Also, most companies will install a very reliable and energy-saving plumbing system called Pex
• Hiring a Licensed Contractor
  • We thought we could do it without a contractor until we started realizing all of the elements that are involved in building- even in the case of a modular home.
    • Our situation is fortunate in that David works in construction litigation and his employer is also a licensed general contractor and he has agreed to take on our project free of charge. He hopes to further David's job training while helping us with our house project. I know not everyone will have this kind of opportunity if they decide to build and we definitely aren't taking it for granted.
    • Before we were offered this opportunity we did take bids from general contractors. In the L.A. area, contractors' fees usually run 10-20% of the site work (the work that flows through the GC), usually closer to 20%
  • Here are things to consider with regard to hiring a general contractor if you are thinking about building: General contractors are insured in case there is an accident at the construction site; general contractors are usually able to find better deals on supplies and labor than if you were to sub-contract on your own; a contractor is a professional and can identify potential problems and mitigate all the mishaps that may occur during the building process. This is what convinced us that we needed a GC: Owner/Builder word of caution We almost got roped into one of these schemes. It's very common with modular home building. Fortunately, we first secured a loan that required a general contractor (including his sworn statement and background checks). Also, check the license status of your contractor and sub-contractors at The California Contractors State License Board
• Hiring an Architect
  • Hiring Greg to draw design plans was the best decision we made. Here's how I anticipate we'll save money in the long and short term:
    • Having Greg act as a liason between the modular homebuilders, through his plans and communication, helped us take our house plan quickly to the engineering process. Even though David and I are creative and communicative people I cannot imagine that we would be able to present our plans in a palatable form for the modular factory.
    • Greg helped us work out the window placement in a way that looked good and he factored in cross-breezes, views and the direction of the sun. Also, he knew which sizes of windows were standard, so we avoided paying for expensive custom windows. In the long run, proper window placement will result in energy savings.
    • If we decide to sell our home, we feel confident that it will fetch a higher price than the standard home in our neighborhood because it will be architect-designed. I feel that the home will have a nice flow and will be very functional which could be good selling points.
    • Having professional design plans already drafted made going through the zoning process easy. It saved us from costly delays, in that the plans were clear and completed by a professional who knew the language of the trade. In our case, we’re up against a local community standards draft plan that will probably be approved in a matter of weeks; it will restrict all new construction to Spanish style. We needed our plans to be approved ASAP to avoid conflict.
• Using the free services of IKEA's home furnishing consultant.
  • We made an appointment with the consultant at our local IKEA in Burbank. She was really professional, nice, had great taste as well as good storage ideas. She helped with us space planning, lighting, storage, kitchen and bathroom design. Plus, she worked within our stated budget.
• Buying from IKEA
  • Don't knock it... IKEA's got some great modern stuff at really low prices. We're planning on purchasing our lighting, sinks, bathroom/ kitchen cabinets, wardrobes, and misc. fixtures from them. I know this will have a positive impact on the look and cost of our house. The challenge will be to find items that don't scream "IKEA!"-- like the Tullsta chair or the Klippan sofa You've seen these a million times on all those lame surprise design shows...
• Building with Fasttrack Foundation Systems
  • If you plan on building modularly and want an industrial look for your foundation, this is the ticket. Plus, it's really strong and affordable. It's approved for seismic zone 4 as well as flood zones.
  • Another good thing about this foundation system is that it be completed in one or two days.
• Building in a rural area
  • Val Verde, Ca is where we currently live and also the town where we're building. It is rural, but within an average commuting distance of downtown L.A. Plus, we don't have such a hectic lifestyle and have all the comforts of living close to a city.
  • We live less than a mile from our building site. I hope that this saves us time and money during the building process. It will be very convenient for me to visit the site daily and since I have a young child, I appreciate that it won't disrupt our schedule as much.
  • If our lots were located in L.A. proper, or even Pasadena it would have been much more expensive. Our choice to stay in our little town will probably pay off in the long term too. Property values are going up and up as more people are seeking a rural/equestrian lifestyle.
• Landscaping with natives
  • I started becoming interested in native landscaping after I read this article published by the Audubon Society. Like everybody else in Southern California, I thought that the chaparral was ugly and that landscaping included going to a nursery, picking up some sod, flowers and mulch and removing the weeds. I didn't even occur to me that there might be another way.
  • At first I was worried that using the native plants in our area would not fit the modern house that we were dreaming about. Actually, now I think it will be best for our modern home since modernism promotes nature and conservation.
  • Bringing in our water will cost approximately $15,000. Believe it or not, we actually saved money with the local water agencies because our irrigation plan was conservative. Since we plan on using plants that belong in our landscape, we won't need much supplemental water. This was a great site for researching our local natives If you live in California, you can even research native plants by typing in your zipcode.
    • Water bills can be expensive if you have plants that need regular watering. If you're interested in more information about this visit be water wise or the Theodore Payne Non-Profit Nursery; I plan on planting many of our plants from their seed shop, it will be a really inexpensive option.
• Choosing all electric appliances
  • We plan to retrofit the house with solar at the end of 2005. We decided to wait until we had the money and also knew what our energy usage would be. This way we won’t have to pay the cost of bring in natural gas and taking it out (and the appliances) at the end of next year.
• Building an uncomplicated roof
  • Our roofscape is a composite of flat and shed style roofs. Individually, each modular unit has a simple roof. I hope we’ve eliminated the need for complicated engineering or trusses that are seen in traditional roof pitches.
• Using a standing seam metal roof
  • Since we’re in an unincorporated area of Los Angeles our zoning codes come from the L.A. County Title 22 One design element that is expressly prohibited is a roll-formed type metal roof. So we couldn’t use a corrugated metal roof, but they did approve a standing seam metal roof It has a nice clean look and it is fire resistant, long lasting, energy efficient and inexpensive.
• Eliminating built-in closets
  • Our home will only have a small built-in linen closet and a mechanical closet. We anticipate that we'll save money in the framing costs and that we'll have more floor space.
  • In place of closets, we're planning on placing an IKEA custom wardrobe in each bedroom and the entryway. I think it will help us stay organized and eliminate clutter and the trap of having too many things.
• Building small
  • The square footage of our house is the biggest and smallest it could be. We cannot build it any smaller because we've had to maintain a loan-to-value ratio of 75%. Since homes are appraised based on square footage, we literally could not build any smaller because our appraisal would have come in too low to secure the loan. The bank wants to see that you'll make a 25% profit (in other words, 25% equity) when your loan is converted to a mortgage. We also couldn't build any larger, because our budget was at its max.
  • Our house plan is 1446 s/f. I like the idea of living in a smaller home because I think it's all the space we'll need and use. It will also be less expensive to heat and cool a smaller home.
  • Not only will we be saving money by building a smaller structure, we'll be saving money in permits too since some costs are structured on a per-square-foot basis.
• Paying the extra fee to expedite our permits
  • The fee to expedite our permits is $1000. I think this will be a frugal decision since the longer the construction loan is open, the more we'll have to pay.
• Using the existing fence
  • We already have a chain link fence on two of the four sides. It's not the most stylish, but it works!