Odds "N Ends - Estimated vs. Actual Costs - A Preliminary Analysis

It is safe to say at this stage that the cost overrun for our project will be formidable, even as much as twice my original estimate but still less than half the cost of contractor-built comparables.  (Reminder: click on any picture to enlarge it for better viewing.)

                                                 UNDER-ESTIMATING COST

A page from the original estimate

For a DIYer to think s/he could come even close to estimating the cost of such an atypical custom-built home is the definition of naivety if not insanity.  When the project is done, I will, as best I can, spend the time to research invoices, credit card statements, cash payments, etc. and compare the findings with my original estimate in order to quantify my naivety.  
In the meantime, it's interesting to look at our project in view of online cost estimates for home construction in the Midwest.  What follows is a theoretical analysis (read: wild guess) based upon industry averages for traditional stick-built homes having some degree of customization.  

While we avoid the cost of conventional HVAC, we add costs for French drains, the various components of the AGS system*, greater volume of concrete, insanely higher R-values for the building envelope, a free-standing energy recovery ventilating system, top-of-the-line windows and doors, ventilated (double-layered) roof and compulsive air sealing for the building envelope to name some of the unique attributes of the home.  Except for the AGS system, all of the features enumerated would improve the energy performance (and raise the cost) of a conventionally built house as well.  So it seems fair to say that not having to buy and support a HVAC system (initial cost, long-term maintenance and energy consumption) more than pays for the AGS system, leaving the cost of the rest of the building fair game for comparing with conventional construction but, at the same time, realizing that "conventional construction" is merely a poor stand-in for the lack of comparables for our advanced and enhanced project.

(Spoiler alert.  If your interest level is waning already, you might want to forego the details in the next three paragraphs by skipping to the last, summarizing, paragraph in this section.)

A quick online search suggests that the per-foot cost in the Midwest for conventional construction ran $121 in 2017, a year that fell about midway through our construction period.  A figure of $121 / sq ft would bring our not quite 3,000 sq ft build in at $363K, half of which, according to the online source, would be the cost of labor with another 10% going towards contractor profit, leaving 40% for materials.  For our project, not all labor was DIY or volunteered.  Some of it was done by professionals, including a journeyman carpenter and a plumber friend.  However, all non-volunteers, whether professional or amateur, received at least $15/hr and, more often, $20, which is what I consider to be a fair range for minimum wage.  And, since we paid separately for the materials involved with all phases of construction, including the dirt and concrete work that preceded the actual build, the excavation and concrete contractors' fees were for labor only, mirroring the wages of the others that helped with later construction.  I would guess then that the ratio of hired and contracted labor as opposed to my (sweat) labor and that of volunteers would be about 

1.5 : 8.5 or 15% for paid labor and 85% for volunteer and my labor.  How that plays out in terms of dollars is the rest of the story.

First, the generic labor cost has to be reconciled to fit our situation in order to be able to consider the other costs of construction -- materials and contractor profit.  If 50% is the generic cost for labor, the labor costs for a $363K house would be $182K.  In terms of dollars, the 85%:15% ratio for labor amounts to $155K for sweat/volunteer labor and $27K for hired labor.  Subtracting $27K from the $363K leaves $336K for everything else -- contractor profit, sweat/volunteer labor and materials.  Since there is no contractor profit to be paid, all of the $336K can be allocated to materials and to the value of sweat/volunteer labor.  Since the time has not come for a tally of the cost of materials, let's assume that their cost is what is left after valuing the sweat/volunteer labor.

So where are we now?  The generic cost of labor is 50% of the cost of construction or $182K from which we have subtracted $27K for contracted labor leaving $155K for sweat/volunteer labor.  Not having to pay the 10% contractor's profit saves another $36K which, when added to $155 savings on labor means that $191K represents that part of the cost of construction for which no cash is needed.  Or, to say it another way, $191K subtracted from the total cost of $336K leaves $145K for materials and miscellaneous costs requiring cash.

So, remembering that the generic square-foot cost of construction in the Midwest is $121, how do our figures compare?   When $145K is divided by 3,000 sq ft, our per-foot cost is $48 or about 60% less than the generic cost.  My original estimate was $34 sq ft for a smaller house (2,100 instead of near-3,000 sq ft), so, on a square-foot basis, I underestimated the cost by at least $30%.  What that translates into in terms of real world expenditures will have to wait until I do the post-build analysis but I suspect that it will prove to be somewhat on the low side.  Even so, it's nice to think that my major bucket list item -- to DIY a house -- has not only kept me enthused and in better health during my golden years but will have provided a nice return-on-investment for our heirs.

UNDER-ESTIMATING TIME

                                                    

My ability to estimate cost proved to be better than estimating the time it would take to build the house and to reconfigure the surrounding grounds, largely because I grossly over-estimated how fast I could get things done working mostly alone.  Having even one other pair of helping hands throughout construction would have sped things up, not just twice as fast but three or four times faster than working alone.

Does DIYing pay dividends?  Maybe, Maybe Not.

I really did think early on that it would take only a couple of years, maybe three, to build the house.  If it could have been done that quickly, the sweat equity figure that I used above would mean that my wages would have been $57K to $85K per year.  All well and good except that construction by the time it is completed will have taken at least eight years.  Divide the $170K sweat equity by eight and $21K per year might be okay for us retirees but nothing to write home about otherwise.  So I guess the lesson here, based upon these wild-guess figures is that a person should think twice about quitting his/her day job to build a house this unique, complicated and time-consuming.  Either s/he should keep the job and hire a contractor or stick to a more conventional design such as using structural insulated panels (SIPs) that could in fact be DIYed in 2 - 3 years.  The problem with having our house professionally built is that it would be hard to find a contractor who would be willing to undertake the risk involved with a ground-breaking, non-standard project unless the owner was willing to contract on a time-and-materials basis which would probably open a bag of worms for the owner.

Dirt Work

Having never sat in a track loader, I was ill-equipped to appreciate the amount of time it would take to move dirt around for our passive solar design.  Digging into the hillside to site the house was time-consuming because of the volume of dirt that had to be moved with a 6' wide bucket and the fact that each bucketful had to be carted to the storage area behind the excavation at least 100 yards away rather than swung to the side as is typically done for basement excavations.  Lots of dirt had to be rearranged in connection with earth sheltering and for the insulation-watershed umbrella of the AGS system.  Contouring the surrounding grounds to funnel run-off to numerous rain gardens also was time-consuming. 

Salvaging lumber from one of several tear-downs

According to the hour-meter on the track loader, I spent 415 hours operating it or about 52 eight-hour days.  Within the context of my original estimate of two years and using 2,000 hours per year as working time, 415 hours would have consumed +/-10% of the total construction time.  As it turns out, 3% over six years is still not inconsequential.

Pre-Assembled Wall Trusses 
I began tearing down old houses and

Jig with truss in process.

out-buildigs  and de-nailing the salvaged lumber a couple of years in advance of starting construction.  Later, when the weather interfered with the dirt work, I worked under shelter using some of the lumber to pre-assemble 30+ wall trusses for the 15" thick exterior walls.  These pre-construction tasks took hundreds of hours, mostly for processing the salvaged lumber once it was on our property.

 Altogether there were seven French drains as long as those
on the left; all were covered with filter cloth as is being done 
to the one in the middle; notice off to the left the edge the 
huge dirt storage area behind the building site.  (Click on 
 the picture for an enlarged view.)

French Drains

Knowing that the thermal mass under the house would have to remain dry for proper performance of the AGS system we enlisted the help of a soil engineer.  On his recommendation, a contractor drilled and sank four peizometers quite a few feet below the anticipated location of the AGS conduits.  Two years later during an especially wet spring and early summer, ground water rose sufficiently high in the peizometers to threaten the future AGS conduits.  The seven French drains that

Friend, Pat, laying a conduit that starts at the white
PVC pipe angling up from the trench behind the footprint
of the building and ending at the location of the future
 front foundation of the house and later to be connected
to the yet-to-be-built solar collector. 

were necessary to mitigate the problem were installed before final excavation for the house.  They took only one day with a large crew of family and friends assisting the excavation contractor but assembly of the drains from plastic culverts ahead of time took me considerable time.

AGS Conduits

Collector shell ready for backfilling the gap between it
and where the front foundation for the house would be
 situated.  By the time the picture was taken, solid PVC
pipes had been laid and buried, joining the black  AGS
 conduits with the solar collector.  Notice the terminal
ends of the conduits in the distance.

Trenching and burying the nine AGS conduits also was easily done in a single day by the contractor with several of us helping.  The time consuming part was connecting them to the solar collector on the south and managing, late in construction, the terminal ends on the north which stuck out of the ground several feet initially.  

Solar Collector Shell   

Construction of the solar collector shell out of dry-stacked concrete blocks that were fiber-bonded-cement-parged and connecting it to the AGS conduits took several weeks mainly because of heavy spring and early summer rains, and was way more physically taxing in the summer heat than I anticipated.  Once it was completed, the conduits run to it and the open pit between it and the footprint of the house backfilled, construction on the house could finally begin.

UNANTICIPATED COST OVERRUNS

The amount spent on contracted dirt and concrete work prior to the carpenter phase of construction was indeed a major surprise.  The cost of concrete itself was somewhat anticipated but the amount paid to contractors for the final excavation and pouring was beyond pale or so it seemed to me at the time being unaware of the size of their capital investment in equipment and the seasonal nature of their work in our climate.

Once that expensive phase was behind us and we started the carpenter phase, most of the overrun was for unanticipated labor and for inflation.  Otherwise, we were doing familiar things that hued reasonably close to the original budget.  Labor costs started rising when I found that I needed a second pair of experienced hands for such things as setting trusses, sheathing walls and roofs and installing metal roofing, siding and soffits as well as for some of the drywalling and blowing insulation.  The 8 years after groundbreaking in late summer 2016 was a long enough span to see inflation of the cost of materials.  For example,  the price of 1/2" drywall rose by 33% between the time I did the estimate in 2014 and actually purchased it in 2019.  The rice hulls for insulation went from $1,400 per truckload to $5,000 due partially to inflation but also other factors (as explained in one of the posts on insulating). 

And there was an exuberance factor.  I found it too easy to have the mindset that, "Oh well, we are already overbudget, so why not spend a little more for upgrades on X,Y,Z.".  This tendency manifested primarily while wrapping up the interior for such things as flooring, bathroom fixtures, kitchen and laundry appliances and lighting.

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*For those who have not followed the blog enough to know about the Annualized GeoSolar system that will provide year-round comfort in the absence of conventional HVAC, click on the title under "Featured Post" near the top of the left column.