Start With a Budget, NOT a Floor Plan

It is MUCH easier to build a floor plan based on a budget than it is to chisel away at an expensive floor plan.  You will almost certainly be over budget on your construction project if you go with the latter option.

At JD Rock, we push peace of mind above all else.  If you cannot pay for your “dream home” with peace of mind, it will turn into a nightmare!  

Now, it probably goes without saying that the more expensive the custom home, the more the builder will profit. But as the builder, we are here to say that we would rather you build the less expensive home with less stress than sacrifice your peace and max out your budget.

We at JD Rock obviously do not know your personal financial situation – so it is up to you to do your homework and determine what you can afford.  We recommend a build budget at least 8% lower than what you are pre-approved for at the bank.  So, if your bank approves you for a $700,000 construction loan, we recommend not to exceed a $644,000 contract with a builder ($56K less than your approved amount). We know this sounds crazy- but by doing so, you are setting yourself up for peace of mind.  When it comes time to make finish-out selections for your home (flooring, fixtures, appliances, etc), you can feel the freedom to splurge a little.  However, don’t forget about all the sneaky expenses at the end of the project like paying movers to haul in all of your furniture.  If you are renting a home during the build, is the timing going to align so that you never pay a mortgage and rent check the same month?  If not, have money allocated for this!  Are you going to want to host a party or two in your new home once you are settled? Prepare and don’t let yourself be house rich while cash poor (all your money is locked up in your home).

Again – we push peace of mind above all else.  Your family will experience peace and joy in your home when you live within your means.  An extra 500 square feet of living area will not produce lasting joy.  Neither will a $12,000 refrigerator.  Chase peace and joy, don’t chase the Joneses.

A Simple Way to Save $ on Your Custom Home

We will say it again and again- we are here to help you enjoy the process of building your custom home, and saving money/staying within your budget significantly impacts that enjoyment. So today’s money-saving tip is pretty simple – build a two (or even 3) story home.  Why?  As of March 2023, concrete is expensive and wood is cheap (at least cheaper than it used to be).  It’s that simple.  

Let’s say you want 2,400 ft² of living area.  Here are two options to consider:

• Option 1 – 1 story

• Option 2 – 2 story (1,200 ft² per floor)

In Option 1, you’re going to spend money on a 2,400 ft² concrete foundation – as well as covering 2,400 ft² of surface area with a roof.

In Option 2, you’re only going to spend money on a 1,200 ft² foundation – and only cover 1,200 ft² of surface area with a roof.

Because concrete is the expensive beast these days, cutting the foundation's square footage in half by stacking two floors on top of each other could save you around $25,000!

We’re not trying to pressure you into a certain look, just offering some food for thought.  You can keep the exact same size home while cutting the foundation (and roof) cost in half.  This allows for a beefier budget in other areas like appliances, flooring, etc.

In a few years, these numbers could completely flip; however, we want you to enjoy your custom home build today! And today, concrete is more expensive than wood.

Peace of Mind Starts With Your Budget

I worked on 4 different Cost-Plus Contracts in 2022.  We unpacked the details involved in this kind of contract in a previous blog, but, essentially, the clients saw all of our numbers on the job and were on the hook for any overages to the budget.  For the most part, these projects all came in with budget overages of less than 1% of the project cost (which is amazing!).  However, I noticed that when clients selected their finish-out (think lighting, plumbing fixtures, flooring, hardware, all the pretty things), they wished they had a bigger finish-out budget. No matter how small or vast the budget, the client had typically obtained the largest construction loan they could afford.  As a result, they tended to feel stressed about every little decision along the way because they could just barely afford the project.  This inevitably results in a miserable construction experience for both the client and builder.  Financial strain supercharges every decision with emotion. 

On a smaller scale, consider a car- I could probably go out today and find somebody to loan me money for a brand-new Lexus with all the bells and whistles.  But because this would be a financial strain for me, I could never enjoy the car. I would need to sacrifice my current quality of life and luxuries just for the fancy car.  So I would miserably drive the car around town. Is that car really worth it? The same concept applies to a custom home. 

I would strongly advise my future clients to not max out on the largest loan possible. I would strongly advise my future clients to have some fluff in their budget so that the unexpected is less stressful and they can comfortably pick their actual favorites when it’s time to select wood flooring and bathroom tile. One strategy I recommend is to budget for 5-10% less than your max in order to establish a cash reserve. Another easy way to have breathing room in your budget is to not build the biggest house possible. If a house costs you $225/square foot, then 100 square feet would cost $22,500.  Now, some people reading this may genuinely need the larger home over a nicer finish out.  Everyone’s situation is different!  All I want to do is encourage you to not bite off more than you can chew with a loan, and remind you that peace of mind is ALWAYS better than a bigger or fancier home.  Build something you will love, not something you will regret.

5 Tips to Save Big on a Custom Home

Our primary focus as a home builder is to make quality custom home building approachable; therefore, we want to help our clients save big so that quality custom homes are accessible to more and more people.

There are several ways to save big on a custom home WITHOUT affecting the overall quality of the finished product (and possibly allowing for even more budget allocation to enhance the finish-out of the home). It really is possible! Below are five tips for cost-saving changes in your home that can allow you to splurge on the finish-out of your home or simply save more money.

1. Lumber selection: choose 2”x4” lumber as opposed to 2”x6” for exterior walls.  There is no significant difference in structural integrity between the two sizes.  Make sure you hire a structural engineer and tell them you want 2”x4” walls to cut costs.  This one swap could save anywhere from $12K to $30K.

2. Roof selection: choose a shingle instead of a metal roof.  A metal roof can cost (on average) 3x to 4x the price of a shingle roof.  Would you rather have an extra $30K to spend on the roof or the dream kitchen? I think you already know the answer.

3. General Contractor selection: Hire a home builder that minimizes overhead and focuses on a personal experience for significant cash savings. This is an intentional priority here at JD Rock Construction. As previously stated, our mission is to make beautiful custom homes approachable. We believe one way to accomplish this is to maintain a low level of entry through thoughtful consideration of all overhead expenses. 

4. Exterior wall selection: For the walls that are viewed less often (the back and sides), consider Hardie board and batten or siding instead of solid rock or brick.

5. Number of plumbing fixtures: Plumbers always charge per fixture, NOT per square foot of the home.  Therefore, it helps to be conscious of the number of plumbing fixtures you have in your home.  Does a secondary bathroom really require two sinks?  Giving every spare bedroom its own bathroom or additional sinks in a secondary bathroom will definitely cost more money.  You can ballpark about $2,400/fixture (including labor and material).  So, a standard bathroom with 3 fixtures (sink, toilet, and shower) would cost around $7,200.  

Our hope is that these ideas inspire more people to consider that a custom home is possible for all kinds of budgets!