The past two years have been moving pretty fast, from finding a piece of land and purchasing, to figuring out how to develop it by employing several teams across multiple companies, and discovering a design partner in Stillwater Dwellings to get me to a detailed site plan and house design. I’ve unfortunately reached the first major hiccup in this journey and it has to do with construction price.
Since the pricing set of plans was completed in September, the contractor worked on roughing out estimates. I was able to meet with Stillwater and the general contractor at the property right before the holiday to go over the initial estimate, and it fell way outside what I was hoping for.
All of the costs are justifiable – my land is very steep and it will be a complex build both logistically as well as the work that needs to be done. I also sort of expected this as I saw more and more of the engineering work that went into the site design. The major miscalculation on my part was the cost of all the excavation, retaining, reinforcing and shoring that is required to make the design a reality.
Since I consider this my last home, I’m really not concerned about resale or even over spending to get exactly what I want. But there are limitations to that. With retirement potentially 15 years away, I do have to think about my tax burden as well as holding a large mortgage – and still be able to do the things I want to do in retirement. I also worry about the burden this can potentially place on my sons. Although I plan to live a long life, I do ride a motorcycle on the freeways of Los Angeles, and the thought of them inheriting a house with a mortgage that could be underwater does figure into what I eventually end up spending.
So what can be done? Stillwater is currently going through a value engineering exercise. There are certain things I’m willing to compromise on, or eliminate, to see if we can lower the overall construction costs. For example, I really don’t care if I have a backyard or not, or moving the house down the hill – I’m fine losing view, or if the back wall of the home is all retaining (eliminating any widows to the rear) – really anything that helps simplify the engineering. Although I hope it doesn’t come to this, it just might be that my land is simply too expensive for me to develop. However, there is no real rush – and things have been moving faster than I anticipated – I simply want to do things right and get the features in the home I’m most interested in. So taking the time and investigating all options is the right thing to do before making any other decisions around the land and thinking about other options.
Because of this wrinkle, we did end up cancelling the January design review appointment with the Mulholland Scenic Parkway board. This was a hard decision since we waited so long for the appointment and had a high degree of confidence that the work was meeting all requirements. In the end it just didn’t make sense to get approval on a plan that I can’t build.
I constantly remind myself that the final outcome (the house) is just a part of the journey. And the journey, so far, has been a lot of fun – with a ton of learning, mistakes, disappointment and joy. I have less of an idea on how I’ll get there, but I know what my destination is, so now it’s just about enjoying the ride. More to come…