How do teardowns work, and do they really 'work'?

[Anonymous]

Anonymous wrote:

OP here. I guess I don't stand a chance of getting a reasonable deal if the area is full of aggressive realtors trying to make money off of novice home-buyers like me. I'm ok with paying the realtor a fee (Well, actually, I'd rather not, but I don't think I can outsmart the system as it currently stands)

OP, you seem very inexperienced to be taking this on yourself. Are you aware that one of those "aggressive realtors" can work FOR you, walk you through every step of an incredibly complicated process, WITHOUT being paid a fee by you?

Yes, I know I'm inexperienced, and reading the input from several PPs, am coming to learn that I've only considered the tip of the iceberg. And I didn't mean to bash realtors--I was contemplating a different word than aggressive, but in the end it captures what I meant as very, very proactive and goal oriented. I expect that some, but not all, would do this to the point of being self-interested rather than assisting a property newbie like me. I know at some point finding the right one will be key. I have only a weak network in DC as I've moved back after many years abroad.

I'm thinking ahead in terms of whether this is a route I should pursue and invest more time in exploring this path--or give it up as pure fantasy. (Loose plan is to rent for another year or so before home-buying. We have enough for a down payment but aren't feeling settled enough to take the plunge, nor do we yet have a feel for the lay of the land enough to make a big step.) Hence haven't made appointments with any realtors, for example. I love hearing the positive results from the PPs who have gone this route and most of you who've done it sound like you've been very satisfied. But I'm daunted now about the technicalities of building. I'm glad I am getting some realistic feedback and good recommendations from DCUMs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Additions still don't pay off the same ROI as new construction and you still have an old part that needs maintenance vs the new addition.

How long are you planning to stay? Once your new house is 5-10 years old, it will start needing as much maintenance as an older house.

What sort of things? Won't you have a better chance of having to replace items on an older home and have major problem come up like water intrusion, basement issues etc... roofing. New home come with a 10 year warranty.

HOWs are largely illusory reassurance IMO/IME.

[Anonymous]

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Anonymous wrote:And yet, those midget 50s and 60s tract homes built for the lower classes WERE STILL CONSTRUCTED MORE SOLIDLY THAN HOUSES ARE TODAY!

Are you a home builder.

We live in one of those and we have had several builders knock on our door asking if we would sell it. We tell them know, we are going to renovate and add on to it and they offer to do the work becuase those houses are so sound it is easy to add a second floor on and create a much better house than they can build from scratch.

Additions still don't pay off the same ROI as new construction and you still have an old part that needs maintenance vs the new addition.

Not sure I fully agree with that, on new construction you will often take a depreciation hit and have the already mentioned issues of new construction like settling, nail pops, etc., all of which can be frustrating -- and "new" does not mean without flaw or not needing punch list type work or even repairs.

I represented a well known quality builder in NJ who our family dealt with for many years and the owner/president of the company even told me --- to my shock & surprise -- that he did not recommend buying a new house, even one of his ... "let someone else deal with the headaches & stress and give it a shakedown cruise for a few yrs."

Depending on what you do in an addition, you can still recoup substantial % of cost, on the work we're doing on a $500k reno/addition it projects to 65-70%+ recoupment, which means net cost of only $200k or so. Overall less expensive than moving and paying a whole new set of closing costs, RE commissions, VA transfer taxes etc.

If the old part of the house is well maintained and sound (ours is), I'm not sure there's a huge difference in maint. between old & new (we have new systems already in the 62 yr. old main house).

And there is no question the quality of construction in our 1950 Broyhill house is better than almost all the new construction I see including many in the $1.5M -2M range.

new homes have 10 year warranty and 2-5 year cosmetic warranty so those issue would work themselves out and be fixed for free.

IME/IMO those HOWs are full of holes and often are illusory comfort.

[Anonymous]

OP: You sound very new to this. Just buying a house is complicated enough -- I'm not sure you will want to take on all the hassle of doing a teardown and building a new house if you are new to this.

At the very least, just go in with a builder who specializes in teardowns in the area. At least they'll be familiar with the various zoning regulations and so on.

[Anonymous]

OP, most of the PPs sound very sour on new construction which tells us loud and clear they can not afford it. Simple. I would do what another pp said and find an aggressive realtor who will work for you during this process. Some are builders and realtors. While it is true you would likely not want to be the first new house in some neighborhoods (the resentment!!!!) - there are plenty of people who now own old houses and are tearing down on the same property rather than build one, two or more half ass additions over the years. No one wants an old home that is trying to look like a new home. It will never look right. We are in the market now, so I know first hand. People buy new houses.....because they can.

[Anonymous]

We bought an old house (circa 1920) on a decent sized lot with the intention to build. The financial aspect was much more complicated than we imagined (and we're not first-time buyers). A regular mortgage will not work in a lot of these cases b/c the mortgage is based in part on the value of the structure -- in every standard mortgage contract, there is a clause about not causing harm to the collateral for the financing, essentially prohibiting you from knocking the house down.

We ended up buying with a construction loan -- but we had to have the builder, floor plans, and financing all in place in short order. The construction loan is only for one year, at which time the house better be built, or you're not going to be able to convert it to a regular mortgage. Also I believe we had to put 25% down for the construction loan, vice the usual 20% for a regular loan.

All in all, it was a painful process, but worth it in the end. With the cost of the land and construction, we're probably in it for about $1.3m but comps here are going for $1.5m, so we're still coming out ahead. Most of the knock downs nearby are being rebuilt with larger houses than we built, so we could never afford the $1.8m price tags of any of the properties built at the same time as ours.

[Anonymous]

We purchased a tear down in Arlington in 2008. The lot was a quarter acre on an okay street. We paid $340k. We built a new home with NDI. The site work cost us about $60k, but that was on the low end for site work. The base price of the new house was $220k. We spent about $40k on upgrades, I think. Would have liked to have had another $20-$30k for additional upgrades.

So, total cost was about $660,000. We got a four bedroom, three 1/2 bath house with a screened in porch and one-car garage. Granite in kitchen and hardwood floors on the first floor. We specifically chose a design which we thought would not stand out like a sore thumb on the street. We've had a LOT of compliments from people in the neighborhood, so I think we did ok in that regard.

Our house is now appraised over $750,000.

[Anonymous]

Anonymous wrote:
OP, most of the PPs sound very sour on new construction which tells us loud and clear they can not afford it. Simple. I would do what another pp said and find an aggressive realtor who will work for you during this process. Some are builders and realtors. While it is true you would likely not want to be the first new house in some neighborhoods (the resentment!!!!) - there are plenty of people who now own old houses and are tearing down on the same property rather than build one, two or more half ass additions over the years. No one wants an old home that is trying to look like a new home. It will never look right. We are in the market now, so I know first hand. People buy new houses.....because they can.

Overgeneralizing is never a good idea... We could pay cash for $1.5M+ but choose not to .... so speak for yourself, OK?

[Anonymous]

Anonymous wrote:We purchased a tear down in Arlington in 2008. The lot was a quarter acre on an okay street. We paid $340k. We built a new home with NDI. The site work cost us about $60k, but that was on the low end for site work. The base price of the new house was $220k. We spent about $40k on upgrades, I think. Would have liked to have had another $20-$30k for additional upgrades.

So, total cost was about $660,000. We got a four bedroom, three 1/2 bath house with a screened in porch and one-car garage. Granite in kitchen and hardwood floors on the first floor. We specifically chose a design which we thought would not stand out like a sore thumb on the street. We've had a LOT of compliments from people in the neighborhood, so I think we did ok in that regard.

Our house is now appraised over $750,000.

How many SQRFT and which model? $60k seems a bit high, is that because of arlington zoning costs?

[Anonymous]

Anonymous wrote:In Arlington you can get a tear down in the $550k range (further out on Lee Highway by Lee Harrison shops). Builders build for about $80-$100 per square foot. You could definitely do something with Stanley Martin Custom Homes for about $1 million. Nothing fancy, but adequate.
A lot on John Marshall just sold for $1.1 million. They tore down the house, and I assume that they are going to build 2 new houses. They will probably be about $1.4 million each.
It's much cheaper to build your own because you have the risk, not the builder.

Just passed by this today. The foundation isn't even put in, but there is a sign up saying the new houses will be listed at $1.395m.

[Anonymous]

How many SQRFT and which model? $60k seems a bit high, is that because of arlington zoning costs?

60K for all site work? Seems very low to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We purchased a tear down in Arlington in 2008. The lot was a quarter acre on an okay street. We paid $340k. We built a new home with NDI. The site work cost us about $60k, but that was on the low end for site work. The base price of the new house was $220k. We spent about $40k on upgrades, I think. Would have liked to have had another $20-$30k for additional upgrades.

So, total cost was about $660,000. We got a four bedroom, three 1/2 bath house with a screened in porch and one-car garage. Granite in kitchen and hardwood floors on the first floor. We specifically chose a design which we thought would not stand out like a sore thumb on the street. We've had a LOT of compliments from people in the neighborhood, so I think we did ok in that regard.

Our house is now appraised over $750,000.

How many SQRFT and which model? $60k seems a bit high, is that because of arlington zoning costs?

House was 2400 sf and we've now finished the basement so probably 3000 sf total.

NDI recommended we budget about $80,000 for site work. Permits are Definately expensive. They are now telling clients to plan for even higher than that. We lucked out bc we were building in 2008 and things were cheap. The tree guys, demolition guys, etc were desperate for work. And we had no significant issues with our lot.

[Anonymous]

Pp here. Our NDI model was the Westover, with a few modifications.

[Anonymous]

OP, a couple things that haven't been mentioned yet:

-One option is to go with a builder who specializes in tearing down and rebuilding on a lot, and has experience walking property owners through this process. This is generally thought to be easier/saves some headaches, but it can be more expensive for the quality that you get. These builders' prices may be $100/sf (low) on some of the bigger sf houses, excluding land and sitework. (Some builders that do this -- quality varies-- are New Dimensions/NDI, AVN, Classic Homes, Stanley Martin Custom Homes.)

-An alternative to the above is to go with stock house plans, a general contractor, etc. The upside to this is maybe you'd get house plans you prefer, better quality, and a better price. But the downside is that there may be more hassle - some general contractors may be fly-by-night, there may be disputes, etc-- your first time building a home will be a major learning curve. There could be major delays, cost changes, etc. This could happen using a builder who specializes in teardowns too--- but they'd have more of a history, and more of a reputation to keep in working with property owners.

We live in a North Arlington neighborhood that (surprise!) has lots of teardowns and infill construction going on. There are also lots of renovations going on at any one time. I like it; it keeps things from being stagnant. I don't like all of the houses in a neighborhood to be from the same era, whether its the 1960's or the 2012's. Some neighborhoods are obviously more aesthetically pleasing than others but of course you pay a price for that. Most everywhere in North Arlington is great so its hard to go wrong.

[Anonymous]

anyone use foxhall homes? How do they compare to NDI, ANV etc...