Two Flat Conversion Costs
By Pat Cardoni
Today we are going to talk money, dollar bills, rolling in the Benjamins, hard core to the floor cash. Specifically we will focus on the conversion costs associated with turning a two flat into a single family home. That is right folks, it is time to figure out what the costs of your construction project will be.
This blog is a part of a series from Pat Cardoni. You can view part 1 – “The Importance of Knowing Your Market” and part 2 – “Building Value Through Construction”. Now it is time to talk about the money!
When you determine that you are going to build or remodel your dream home it is time for your builder to give you an “estimate.” After all the projects we have completed I have learned that the word “estimate” doesn’t mean the same for one contractor as it does for another. Professional builders when asked to give an estimate are confronted with two choices.
1 – Tell the client that it is impossible to give them an accurate bid without the corresponding architectural plans.
2 – Give them a “rough bid” which is basically a guesstimate based on their experience on past projects.
I always believe in #2 in initial discussions. Why? If you don’t trust your builder from the beginning then you should be looking for someone else to work with. Utilize the experience of a professional contractor to help you determine the cost of construction. They should be able to provide you with the raw numbers that you need to determine if you want to move forward with the transaction or not. At SG Home Builders we leverage our experience and use technology to allow you to feel comfortable with us from the very beginning.
Keep in mind, that no contractor will be able to provide you with a perfect estimate, even with architectural plans and especially not for conversion costs. However, the raw numbers should only take you to the point of determining whether or not the budget is in a range you are comfortable with. To understand what you really need spend to complete your project you need architectural drawings that everyone has agreed on.
You and your builder need to be sure you talk about the finishes you want to be in your house at completion as well. In other words the same project you could do at $80 per square foot you could also do for $150 per square foot. It depends a lot on the architectural plan set that you design.
What does this mean for the conversion costs of turning your two flat into a single family home? What decisions do you need to make, and what costs are you going to be forced to pay by new code requirements. Remember, most of these two flats built in Chicago are over 100 years old, there was very little code to follow back then.
Let’s start in the basement. The City of Chicago is going to require a new water service for any major renovation project, and turning a two flat into a single family is certainly a major project. The cost of construction for this work will start you off with a cool $18-20K. How about the basement flooring. Simple enough to dig those old floors up and drop your basement height down right? To lower the floor, waterproof, and pour new cement will run your cost of construction between $20-25K.
So how are you supposed to come up with a cost of construction on a square foot basis, if you have all of these requirements to worry about? That my friends is why you need the services of an experienced contractor and an architect that knows the code requirements for the area that you are building. No offense to suburban architects, but if you are not familiar with City of Chicago requirements, then stay in your sandbox and vise versa.
Once you have the requirements and major upgrades in place, you are then comfortable going back to the traditional square footage model. If you know the square feet of your home you can get a pretty good idea of what you are looking at for cost of construction. If one floor is 1,000 square feet then your finished conversion square footage will be 3,000 square feet for all three floors. So cost of construction using $80 per square foot could be $240,000.00 and $150 per square foot $450,000.00. Just be sure you add back the requirements and upgrades for you basement.
Remember, your costs of construction can significantly change based on what you decide to put into the home once it is ready for finishes. As an investor I have made homes look fantastic using economical resources and stock materials. I have also thrown the budget out the window and elected for custom cabinets, designer tiles, saunas, rooftop decks, heating floors, and every sort of smart technology you can think of. Make sure you talk to your builder and architect and let them know what your needs versus your want list is so you can make the critical decisions early on when deciding the costs for your construction project. Can you tell which one was economical and which one blew my budget?
In the next article we will look at costs associated with adding a second story to a bungalow a brick ranch or a frame Cape Cod. Until then call me, text me, email me. I want to be your builder!