Finally ready to start..

The initial bids..

The builders have spoken and I have bids from a variety of them. They range in size from individuals to even a full blown business that has an office with a front desk, finance and marketing departments (Hint:They were the most expensive). Here they are..

1. $581,000 - Original quote was $399,000
2. $544,123 - Original quote was $367,750
3. $526,608 - Original quote was $325,000
4. $487,650 - No original quote
5. $474,775 - Original quote was $306,475

Needless to say, I was fairly shocked to see the increase in prices from what was originally quoted. I knew I had added some things and was expecting a price increase, just not to the extent of what happened. So what happened?

The majority of increase occurred because of the addition of the large front and rear porches plus trellis covered in bluestone. In addition the stone veneer added to the columns and outside. In all this probably increased the price around $70-80k.

Second, I added miscellaneous work that wasn't originally quoted including another fire place, interior trim and crown molding, entry door, skylights, master bath finishing items, and other misc items. This amounted to ~$32k.

Lastly, the builders themselves generally had increases in the areas of plumbing, electrical, siding, and windows amounting to ~$38k.

So in a nutshell, I added most of it while some of the other estimates went up in part because the economy is better for builders and subcontractors (late 2012 vs late 2013).

Finding more money..

I knew I either had to make serious cuts in what I was doing, take on more work myself, challenge the builders on their prices, or find more money. Perhaps do all of them.. After some exploration I decided that the best thing in my situation was to go ahead and refinance to pull some cash out of the equity of the home and then reinvest that back into the home. I'm simply not willing to drop the expensive porches & trellis from the design and so minimally need more to fund that.

So I'm ultimately pulling out $185k in equity by refinancing to cover the increases in cost and taking on a larger mortgage payment. I believe in all likelihood that i'll more then get the money back if/when I sell when I look at the price of homes in my neighborhood of a similar size to what the new home will be. Fundamentally the home will increase in value substantially more then the amount i'm investing to do this renovation.

I also plan to use these bids to leverage the builders to be more aggresive on their bids. One builder already dropped his markup 3% and mentioned challenging his subs on their prices so obviously there is wiggle room in many of these bids. 

Choosing a builder..

While I wait for my architect and the town to do their part to get permits from the building department, I need to choose and move forward with a builder. From the above quotes, I ruled out #1, #2, and #5 immediately. The first two due to their high price and the last one due to how well they communicate. #3 and #4 seemed like what I was looking for.. Individual builders who had been in busy for two decades+ that had the experience and track record doing this work without the overhead of a larger business.

I was hoping to go with #3 but given his price was substantially higher then #4, I was leaning towards #4. However after some conversations it was clear that #3 was willing to lower his price to the same as #4 while #4 wasn't offering any reductions in his price. So the choice became clear.. Given price was the same, and assuming references and background checks checked out, I was going to go with #3 who'd been helpful and who i'd liked from day one.

I went to look at homes completed by both #3 and #4 and here are some photos of some recent jobs done..

#3:

#4:

Both to my eye seem as though they can build a new home and do additions that blend well with the old structure. I figured since they don't control the design, the appearance of the homes was less important then what the home owners would tell me although it's good to see some nice looking homes in the mix using some of the same craftsman style and materials that i'm looking at using.

I called a few references for #3 and all of them gave glowing reviews of working with him and the quality of the construction of the home. I tried to ask questions such as "if you had to choose one area that the builder could improve upon, what would you choose?" to force them to speak negatively about their experience in some fashion. However even that didn't yield much. They all seemed genuinely positive about their experience even ones who'd lived in the home a year plus.

At this point I've decided to move forward with #3..

Wrapping it all up and getting started..

At this point I still don't have a start date and i'm back to waiting.. I am essentially waiting for:

1. The town building department to review our response to their comments, approve the design, and give us the go ahead to draw permits.
2. The builder to work on restructuring pricing to be in line with my budget and to draw up a schedule

Once the town and builder do their respective parts and I get a start date, it should take roughly 4.5 months to complete. However, we are entering the rainy season here in California so that my disrupt things a bit.

On my next update I should have a schedule, better understand my costs, be done with the building department approval, and perhaps even start posting photos of the demolition..