Episode 17: What Does It Cost? | Custom Homes with Franco Albarran

Curtis

Hey, everybody. Welcome back to the Your Project Shepherd Construction Podcast. I’m your host, Curtis Lawson. And if you’re a regular listener of this show, I know that you’ve heard me say this before, but I’m going to keep saying it because it’s so important. Here at Shepherd, we teach that every successful project has four key components which are represented by this simple child’s drawing of the house that you’ll see on your screen if you’re watching the video.

And if you’re not, just try to imagine that. Imagine like what a four year old would draw for a house. Just four lines, the floor, The bottom line, the foundation is proper planning. The left wall is your team, the right walls, communication and the roof. Protecting it all is proper execution. Have all four of those components in your project will succeed.

Take one away and it’s all going to fall down. So this is our second season of the Your Project Shepherd Podcast, and we’re making each season about 16 episodes long, which is about two months based on our current release schedule, which is twice a week on Tuesdays and Fridays. This new season, we’re going to be talking about what does it cost?

And I’ll be discussing all those things that people ask me ask architects and builders when they first call to talk about a project and with me today to talk about what does it cost for custom homes? Is my friend Frank Albarran of Albarran Architecture and Construction. Franco is a licensed architect here in Houston and he’s also a neighbor of mine. Franco, welcome to the show.

Franco

Thanks for having me on the show. Really appreciate it. Looking forward to it.

Curtis

Want to give us all a quick rundown of what you guys do and tell us about yourself and how you work.

Franco

Sure. So I’m a licensed architect. My name is Frank O’Brien. We’ve been in business about 19 years. We spent the first half of that strictly doing architectural design work for our clients’ custom homes. We did a little bit of commercial work in the beginning. We’ve kind of phased out and we strictly focused on custom homes, remodeling additions, anything that’s really unique and a kind of a one-off project.

Franco

About eight years ago, nine years ago, we added a component of building as well. And our process is what we call architect led design build. So the architect myself, who designs your project is actually building your project as well. In that way we found that it was much more beneficial and there’s a lot of value in that. The architect who designed it understands the details, the drawings, the components, can interact with the subcontractors and can make changes and decisions with you in the field quickly and more efficiently.

Curtis

Yeah, so it’s like our concept of building your team early, except as just fewer team members. You’re kind of getting your architect, your builder all in one.

Franco

Absolutely. But we also like to partner with other builders and other contractors because we do about 12 projects a year and we end up building about three of those ourselves. So the rest of the work is referred out and a lot of times builders bring in their clients and we’re it’s very clear that we’re also builders, but we’re not going to build in their job.

Franco

But we like to work with those builders because we come from it from a build a building point of view and that we will make sure we design can get built within a budget and within a timeframe that makes sense for everybody. We don’t like to be the architect that has a lot of great ideas, but yet somehow is going to be over budget or very difficult to.

Curtis

Build and that can be a big problem. So you guys having the firsthand knowledge of how things actually go together in the field and not just the theoretical knowledge is a big is a big plus, right?

Franco

Absolutely. I tell the team members all the time that, look, whatever we design, we’re going to be responsible, you know, probably or someone else. And that’s a huge responsibility. And we want to make sure that all of our clients are retaining us, that we’re able to give them that that service and that value to them and their builder.

Franco

Because as a team member, we want the builder to succeed because if he succeeds or she, then the project will succeed. And the happy client, you know, it’s just it’s great for the team all the way around. We’re very collaborative effort on our work.

Curtis

I guess if you’re like me, you probably get a lot of calls from people and one of the first questions they ask is how much do you charge per square foot.

Franco

Right.

Curtis

Now? So how do you answer that?

Franco

You know, first off, that’s a great question. I think charging I think it’s a great opener, a great conversation piece to start the conversation. I don’t let that really guide too much of the conversation. I typically what I tell my client is like, look, we price projects and then when we’re done with the budget, then we divide it by the square footage of the house and then that gives us a number.

Franco

And that’s kind of how we figured out price per square foot. But really we look at projects and say, okay, what are you trying to build and what are what is part of that budget? For example, you’re going to build a pool. Is that part of that budget or is a pool independent? Because you know, the pool, if you’re doing price per square foot and all of a sudden your costs really goes up.

Franco

Yeah, but if you’re just building the home and also depends of the components that go into a house, we tell them there’s kind of a minimum standard that we kind of would anticipate as a starting point for conversation. Not so much to, you know, drive the cost up, but rather to say, look, based on our historical projects in the past, all of our data and knowledge, this is what would be an entry point.

Franco

And then you can definitely go up from there depending on your preference and what you want to put in at this house.

Curtis

But trying to compare that cost per square foot between two builders is almost impossible because you don’t know what one’s including. Like you said, a pool.

Franco

Exactly.

Curtis

Landscaping. Well, some builders leave out the appliance package. I mean, there’s a lot of different things that you might include that other builders don’t include.

Franco

Yeah, absolutely. You know, so I went back, I was listening some of the podcast to some of your guests you had earlier, Jeremy McFarland from Brickman Design, and he kind of equated it to kind of like buying groceries. You know, he says depends on what you put in the cart. Yeah. So the way I look at it is a price per square foot is a unit of measure that we use to build, but it’s not really what should be guiding the project.

Franco

Now we purchase things on a price per square foot tile, drywall, you know, quartz countertops, things that those items are priced are bought, and that unit. But it’s very hard to equate it because I tell a client your kitchen is your most expensive component of the house. You get cabinets, you get plumbing, electrical, mechanical, you get paint.

Curtis

Every trade.

Franco

Everything is in there. And that say 15 by 18 or 15 by 20 space, you go to a bedroom, you got walls, drywall, maybe wood floors, probably gonna be some carpet, depending. That’s like that is far less people involved there than it is over here. So a kitchen might cost 800,000 bucks a foot. But to build up that room over there might be very inexpensive.

Curtis

Yeah. And like an outdoor kitchen, which, which most people don’t even include the outdoor kitchen on their square footage.

Franco

Exactly.

Curtis

That’s that outdoor kitchen could be 20, 50, $80,000.

Franco

Yes.

Curtis

It it’s not even part of the square footage, so to speak.

Franco

Yeah. So one of the things I’ve noticed is that when I started my career early on, so I started practicing about 25 years ago, and patios were patios. They weren’t very elaborate, maybe a screened in porch.

Curtis

Concrete slab and a roof maybe.

Franco

Yeah, at the best you’d have some sort of a stone tile. But now are patios or outdoor living. Now they’re really outdoor living spaces. They’re on air condition. Some might be air conditioned. There’s going to maybe screen, then there’s going to be a countertop, maybe a sink, a bar, a TV. You’re going to have a wood ceiling. Are you going to paint that?

Franco

You’re going to stay in it. So then all of a sudden this now becomes really the cost of a living space versus an outdoor space that isn’t really equated into that price per square foot because it’s not considered air conditioned space by a cat standard, so to speak.

Curtis

Yeah, you know what? Less so. But also even your front porch, you’ve got a big front porch with tile gas lanterns, stained wood ceiling, all that stuff. Again, that, that non square footage, space costs costs more to build than a bedroom does.

Franco

Exactly. In a lot of oftentimes that’s a great example because let’s just say the house is raised, it’s in the flood plain or you’re in the heights. Then what is holding that up? Is it going to be just wood or is it going to be made out of brick or concrete or CMU? You block to sustain the weight of whatever look you’re going for.

Franco

So then the cost to build that is very expensive and it might only be an eight by ten or ten by ten. Yeah. And so there’s a lot of different things that kind of keep in mind. And when we work with our clients, we like to educate them throughout the process about what things cost and really kind of what things mean in terms of build ability and also what’s available.

Franco

You might have a really great idea, but if you can’t get something for six months or eight months or even a year, then you kind of have to start thinking of other ways to kind of achieve that same look.

Curtis

Starting with what can you spend or what do you want to spend? What can you afford to build is really the better way. It’s the price per square foot is is a good way to start the conversation. Maybe just to see if you’re in the same ballpark as the builders that you’re talking to.

Franco

Right.

Curtis

But beyond that, I mean, that’s really to me, all it is is a starting point. Absolutely. Beyond that, it has to be, hey, this is our budget. What can we achieve for this budget? Right.

Franco

Right. And oftentimes, as I noticed in our practice, is not so much what they can afford as much as what they want to afford. Right. I tell my clients, you know, you may not want to purchase a $80,000 appliance package in your house. You might decide, I don’t need that. I can do far less than that. And that’s fine because the appliance package is a great example.

Franco

It can double, and that doesn’t really affect the house in any way. Structurally, it’s just the it’s a it’s a package. It’s a feature that just adds a lot of cost to a project that maybe doesn’t need it. I mean, if you’re a cook and you really cook.

Curtis

A lot, that might be important to you.

Franco

Yeah, but if you’re somebody who says, you know, we mainly grill on the weekend, do all these things, then maybe you do that, you take that money, invest it somewhere else throughout the house.

Curtis

Yeah. Recently we’ve had a lot of issues with it. Settle down some, right. But we’ve had a lot of issues with market volatility, right? In building materials, especially lumber. I mean, it went from, you know, 300 something bucks a board foot to 1600 bucks a board for it, and then it’s back down and not sure where it is today, but it’s it’s back down pretty close to where it was before pre-COVID, right?

Franco

Sure.

Curtis

So market volatility can even swing that price per foot a very large direction amount in each direction, right?

Franco

Absolutely. You know, great example is also like appliances have chips in them. You know, there’s a chip shortage. So then that causes a delay and causes, you know, additional pricing. And so really, I think the best way to look at it is that you can price it. You can put a number assigned to that, to that category, that line item.

Franco

But then we actually go purchase that and you actually now need that material. There might be additional cost involved. Lumber is a great example. Also courts, it might be that the product you pick out is let’s just say it’s not trendy and all of a sudden over the course of six months you’re building that material becomes very trendy.

Franco

And for some reason, you know, supply and demand, there’s more demand for it. So it’s going to the cost is going to go up. So then that might cost more than what you had initially budgeted for. Or you maybe look at something else. But I think Portland budgeting is to give yourself some contingencies within that budget. And by that I mean let’s say you get a so like when we build a project, we look at the budget and we say, look at all the projects we work on.

Franco

These tend to be the categories that tend to maybe get a little more inflated because people add to them or they kind of splurge in certain areas. And I’ll use one as an example is going to be electrical. Don’t sound like a big deal, but oftentimes they might say, you know what, we didn’t consider this, but we really want to add lights to the staircase.

Franco

Okay, So now we’re now we’re adding lighting in there. So we might need another. Does that come in a dedicated circle? What kind of lights are going to be now we have to cut that light within the trim. So then there’s some labor costs there. So what we often do is we add some additional contingency within that line item and say, okay, this is the bid from the electrician.

Franco

But based on our experience, you might add more lighting or certain components to your project and we’re going to put this money here. Now that doesn’t mean we’re going to take the money unless you use it right. And if you don’t use it, you get to use it somewhere else in the project or it’s just a credit. Back to you.

Curtis

What are some other areas besides electrical that that you find are common areas where you need to build in that extra contingency or things that people often add?

Franco

Framing. Framing is a good one because we we did a project a few years ago in West you we had some third floor attic space that was left over. We knew where we can use some of it, just not we didn’t know to what extent. And they ended up using a good part of that attic space. And then when they built it out, we had actually do some re-engineering because of some of the components of that moving around to accommodate the esthetic they wanted.

Franco

And so then that, you know, so we learned, okay, you know, that any the other thing might be it’s funny but it’s shampoo niches. So in our framing package, we actually allow a number for framing those shampoo niches because no one knows where it’s going to go or how it’s going to look until we pick out a tile, because we like to make sure that talk and course out with everything.

Franco

And so then we make these niches and then we anticipate that ahead of time, this is where it’s going to go. We might be working with an interior designer and then once we know the pattern, we lay it out inert in our CAD software and then we can tell you exactly we’re going to go. But try to translate that information on a framing stage to pass an inspection three months before you install tile.

Franco

That’s a that there’s a lot of forward thinking. Yeah.

Curtis

And there’s also certain things that people, you know, no matter how well you draw it out on paper and try to envision it, it’s not the same until you’re standing in the room looking at it. Like on paper they might, they may say, Oh yeah, that 14 by 20 shampoo in my shower is fine. But in person they get look at it and they’re like, No, I need it all the way down the wall five feet long.

Curtis

Yeah, 20 inches tall. And so reframing it. And guess what? The framers are going to charge you for making another trip to do that. You know, it’s just, you know, it’s extra cost.

Franco

Or you’ve already installed maybe at this point you’ve already gotten as far as party or whatever your moisture barrier is going to be there. They have to take that out, reframe it, redo it. Maybe you might have to move some plumbing lines. So there’s a lot of things to consider as you’re building. And these are the things that we tell our homeowners.

Franco

So we have a whole list that we would ask our clients and say, these are the questions we’re going to ask you throughout certain parts of the process and the phase so we can then build it for you efficiently as possible. I don’t give them everything upfront, so I gave them every single thing they got to decide on.

Franco

They probably wouldn’t build a house. They just walk away.

Curtis

I think people see new construction homes on the market and I’m talking about infill, new construction. So like a new construction, an existing neighborhood, they see a spec house on the market and they’re like, Oh, I can afford a new house. And then they talk to us about building a custom home and they’re like, Well, how can it be so much more for a custom home?

Curtis

The spec, the spec house is on the market over here for, for for this price. Right, Right. So what are those differences between a spec house and an A production Sorry, not production, a spec house and a custom home. You know what’s what’s the difference there? Why is it so much more to build a custom home?

Franco

It boils down to quality. And I’m not going to say quality is going to be, you know, really bad or terrible on a spec house or is it kind of a basic quality? One would expect. But let’s take lumber, for example. So if you’re framing a custom home, typically custom builders, as you and I are going to want to use premium material like the duck fir.

Franco

So that’s going to be much more it’s going to be better, it can weather better, it’s going to get wet. And so something that dries out, maybe one’s not going to warp or shrink and swell a lot, something that’s more dimensionally stable. So that would say that’s Doug fir and then you might even do some other let’s just say they’ve got a 12 foot tall wall.

Franco

Now, you and I had this discussion on one of your projects where you were investigating, lighting some lvl studs. Yeah. So you’ve really had that nice dimension and stable lumber. Yeah.

Curtis

A straight wall on a tall on a call ceiling. Because when you.

Franco

Start taping and floating that on drywall, you’re going to see the waves and the oil casting. So in, in the spec house they might do all that at a southern yellow pine, which is fine, perfectly acceptable. Engineers will accept it. But you know, if it gets wet, it tends to work, tends to shrink in the soil and the framers don’t like existence.

Franco

That kind it’s kind of brittle. So it’ll kind of snap a little bit easier and it’s fine. But over time, you might, you know, if it gets, what, a few times and dry and within that process when you start to hang drywall, so you’re going to have a little bit of, you know, wavy walls and depends on how if you get a texture, have a little bit of texture, it’s fine.

Franco

But if you want that nice, smooth wall, you almost have to go to a better wood framing product. And that’s one example that drives cost.

Curtis

Yeah. Or, or some spec builders might even use like a number three grade lumber. Yeah. Which is, which is going to give some really wonky walls.

Franco

Yeah. And we, you use just like bracing. You know the other thing that I think drives cost within a spec house would be let’s just take kitchen cabinet hardware or cabinet hardware under Mount Glides If you do the nice underground cave glides or anything like that. Bluhm Those are going to be very expensive, I’ll say, paying your your gold standard.

Franco

Yeah.

Curtis

20, $25 a pair.

Franco

Yeah. And then if you have what let’s say of 100 of those each, do the math as a really quick. Yeah. Versus the regular slides or glides that are very basic. Maybe they’re about two bucks a pair. Right. And so then there’s a huge savings that you don’t even see. And it’s also how you build the cabin. Is it a frameless cabinet?

Franco

Is it going to be kind of what they call lit more cabins, the built in the feel that a trim. So there’s many ways that and then as we educate our clients to understand that we say look these things are not wrong. There’s nothing wrong with these at all. But this is an option if you want to go that route.

Franco

But if you want this look, based on the photograph for shown me in that image on Pinterest or how’s this? Is this you know, this is kind of that level of detail.

Curtis

And on the building performance side of things, the spec house is probably not going to be built with, you know, like a zip system sheathing and spray foam insulation, and they’re not going to go through kind of the same energy rating and testing that we might do on a custom home. It’s, hey, we’re going to use the cheapest materials to get this thing done as fast.

Curtis

And she was possible because that’s the name of the game. An investment real estate is get it on fast and cheap and maximize profits, because usually there’s an investor who wants to make a return and that builder wants to make money too.

Franco

So yeah, and it’s they have to take into account length of the time on the market, how long it’s going to be under the private interest payment. And the other thing, aside from materials, might be the quality of the subcontractors that is going to really drive that that cost. So I go back to framing again. So we use that example, the framer who’s going to build a spec house the way he is going to frame it and build it is going to be different than the frame.

Franco

He is a custom home, but the cost, the labor costs are going to be very different. But it depends again on what you know, there’s a whole level of service that goes with it because the framer for a spec house is just going to show up frame and move on versus a custom guy. He’s going to ask you questions and say, Hey, I noticed a few little things here.

Franco

Can we work these out ahead of time? So I don’t have to rebuild this component twice or three times. And so that’s the kind of it’s it’s a whole mindset about building a custom home, not just your architect or your builder. It’s your whole team all the way down, your subcontractors. It’s how they approach building to be efficient as well.

Curtis

Just one last comparison. They talk about what the difference is between even that in a production home. So think. And so you go from a spec house infill to a production setting. What are those differences even like in price.

Franco

Yes.

Curtis

Or, or what do you get for that price difference?

Franco

Well, I’ll put it this way. My lumber supplier, he only does custom side, but he’s got some production side as well. And he jokingly said he’s like, you know the custom guys, when you guys get a lumber delivery, he’s like, you guys are checking everything and make sure everything is, you know, perfect what you were looking for and you’ll you’ll send some things back because maybe that’ll meet your expectation.

Franco

You’re framers. He’s like production. They’re happy they got lumber. So I think that kind of sets the tone. And a lot of times those project managers might be managing 30 or 50 home 50 homes at one time. Yeah. So what level of detail can they pay attention to? There’s a lot of autonomy with the subcontract designer versus a custom home.

Franco

There’s not a lot of autonomy there. There is some to the subcontractor because you need them to do their job and you don’t want to get in their way. But there’s also a lot of back and forth in communication of what are you seeing, how do you feel, How’s this looking? Do you have any concerns? So it’s it’s a whole different mindset.

Curtis

And those guys are also buying in bulk. I mean, they’re buying the same tile. Probably buy that multiple container load. Yeah, the roofing material, everything. They’re buying that stuff. And there’s this huge economy of scale and they’re building that same floorplan over and over. They may have five Floorplans.

Franco

Yeah.

Curtis

And they’re building the same floor plan. The subcontractors give them a massive price break because they’re, you know, they can build those in their sleep.

Franco

Yeah, absolutely. I mean I had a friend that used to work at a I don’t think he was an architect, he was a designer and worked in his office in putting together these plans. And they knew exactly how many sheets of plywood they would use per project. And if they ended up using one or two more sheets per job, they would ask questions like Why are using more?

Franco

And it isn’t. It didn’t seem like a lot, but let’s just say plywood was, I don’t know, ten bucks then nine bucks. And then you have that over 300 homes a year, letting it into the production builder’s profit, especially.

Curtis

When those prices are up to 60, $60, a sheet for the same plywood.

Franco

Right? Yeah, but but they’re like you said, economies go. They can buy there, they can pre-purchase. They say, hey, I know I’ve already committed to 300 houses this year. I can buy all that lumber now and I can stored in a warehouse. I can do what I need to do with it, protect it, and then use it when I need it.

Curtis

I mean, I think that the difference is I mean, they are the economy of scale, but I think, like you said at the beginning of this, the the quality and what they’re putting into it is the biggest difference or one of the biggest differences. If you have a production home builder or even kind of like a larger spec home builder who’s trying to also slide into the custom market, kind of the build on your lot custom market.

Franco

Yeah, I see those, especially in our neighborhood.

Curtis

They’re bringing that same production quality level to a custom home. Right? And I think that also skews people’s view on what they should be able to get because they’re like, Oh, I talked to I can’t say any names on here, but I talked to such and such builder. They have this Build on Your Lot program and they told me that they can build this house and in this neighborhood for 150 bucks a foot.

Franco

Yeah.

Curtis

And I would say sometimes they can and sometimes they can’t. In fact, I, I took some pictures and video today on a job site. I actually posted a couple on LinkedIn the other day. I think you saw and it’s a about a $2 million house in Bel Air, Texas, which is a few blocks away from here. And this is a national or regional, at least production builder who’s kind of got into this, built this build on your lot market.

Curtis

And the whole house is sheathed with type II thermal power basically a waxy cardboard.

Franco

That’s in that.

Curtis

Sheathing. It’s got the cheapest possible vinyl vinyl windows that you can buy.

Franco

Yeah.

Curtis

And I was over there today snooping around, taking some photos because I can’t help it. And just the quality of work that goes into that is absolutely horrendous. I was in there watching the Trim Carpenters run door casing and I’ll put some videos of this soon, but none of the monitors come together on the corners. And if they do, they’re like askew.

Franco

And that with a painter can send that out, right?

Curtis

Yeah, that’s why I said that. That’s what we call it. Good enough for the painter, right? Yeah, the painter effects that use some caulking.

Franco

Yeah, exactly. But he’s your buddy. No. And so I think really what it comes down to is that mindset in terms of how you build things in custom. It’s what what the term implies. I tell our clients, building custom is like working with an architect and a custom builder is like having a suit or a dress made to your liking.

Franco

You pick up the fabric with put on you, the measurements are taken, the inseam, everything is cut to fit you and to make you look the best as possible. Within that, that realm. And that’s exactly what building a custom home is and working with an architect or a builder that’s going to care about those details because it’s also their reputation.

Franco

You know, they’re known for producing quality work independent of style. And so if it’s something that that they’re they also want to be proud of the work. But it’s also a team effort that how you build is really more of a mindset and how you get there than it is. And quality is very important, but I can have the best quality subcontractor, but the mindset isn’t there.

Franco

We’re not going to able to get to that part.

Curtis

As I like to say, you’re building a prototype and so this is the first time this house has ever been. Design is the first time this house has ever been built. So we are figuring things out on the fly. If if I build this exact same house again next month, I can do it cheaper, right? Probably because now we’ve worked out all the bugs.

Curtis

Yeah, we don’t have to allow as much contingency because we know it will. It’s going to be. Yeah, right. But no, we’re going to build this thing one time. It’s a one off prototype. If you go to any company that does design on any kind of product, the prototypes are always going to cost more.

Franco

Exactly. You know what? I’m glad you said that because so I think when the homeowners selecting a builder in this regard is, yeah, it’s a one off prototype, but we should be interviewing that builder on a site from quality is our process. How does our process allow for that one, our prototype to give you the best result in the end.

Franco

And I think that’s one of the things that we overlook in that price per square foot when people want to go to a when they think about cost, it’s kind of a run to the bottom and you’re going to get a builder, in my opinion, whose process can’t deliver that product in the end. And it’s not his fault because he maybe it isn’t is the team doesn’t have the experience and he just doesn’t know or she doesn’t know how to achieve this.

Franco

But if you go to a quality builder who’s got a very good process, they can build to produce that for you in your expectations going to be met 100%.

Curtis

So shifting gears a little, in addition to the actual cost of building the home that we’ve been talking about, what are some out-of-pocket expenses that people should expect to incur even before they ever break ground? Because a lot of times you’ll have, you know, several months, maybe 2 to 6 months or more before construction starts, which means probably before their bank loan kicks in.

Curtis

Right where they’re paying out of pocket for, you know, architecture and what else.

Franco

So architectural fees would be one, engineering fees in engineering and can vary. And by that I mean you’ll need at least a structural engineer to design the foundation and the framing plans. You may need several if you’re going to have any sort of a drainage on your property or you live in the floodplain and you’re doing something a little unique and a little unique doesn’t mean anything.

Franco

Crazy City Houston is really kind of cutting, you know, there being a little more strict about building in the floodplain. So there might be some of that to consider. The other thing to consider might be, are you going to hire a building performance consultant, someone who’s going to make sure you achieve the energy efficiency that you want within your house?

Franco

The things would be MEP engineer. You don’t need a residential, but maybe we had a client who had really bad allergies, her and her son, and so they hired a mechanical engineer to design their system. It was all sheet metal construction for the ductwork. Very expensive, but it’s what they needed because otherwise they wouldn’t be able to live in the house.

Franco

So that’s something to consider because that’s not something that’s standard on a on a typical project. Other thing to be interior designer is that something is going to be in. At what point you bring in the interior designer. We prefer it be sooner rather than later. We’re not having to undo a lot of what we’ve already done. So there’s a collaborative effort there.

Franco

And are you going to hire a landscape architect, maybe a pool designer, lighting designer. Lighting designer, Yeah. Oh, there’s a lot of people that get involved in the process. But I think if you hire a very, very good architect, they can take some of those components and they can design some of these components and maybe they can execute them.

Franco

And a lot of times you can get some very quality subcontractors like my landscaper is a great example is don’t necessarily need a landscape architect, but we can design some outdoor living spaces and then he’s able to kind of back into it and tell you based on his experience and what he’s done and how he builds things, he’d say, okay, we can do this and that and the other.

Franco

And then I do have a friend of the landscape architect, and sometimes I’ll run things by him. He’s like, Yeah, you hit the nail on the head. He’s is, you know, that’s exactly how I would do it. So there’s some of that. You know, you can bring in as many consultants as you want. We’ve worked on projects where we were doing gyms and they bring in a gym, consult someone who just strictly do that.

Franco

Maybe someone’s going to lay out your kitchen, the kitchen designer bathroom. So there’s a lot to consider or you don’t have to make it that complicated and just kind of pick your team architect, builder, interior designer. And we have three very good people who can collaborate. You’ll be able to, I think, get everything kind of find a solution, everything that comes up.

Curtis

Yeah. Then there’s those small costs that kind of add up like a like a soil test, a geotechnical surveys. You might have multiple surveys done different types of surveys.

Franco

Yeah. I mean a good one is I tell my clients now is that if your surveys older than five years get a new one and get a topographic survey, it gives you the elevation points on your lot and go ahead and do an elevation certificate even though you don’t need it. We’re seeing that the city, Houston is kind of requiring that more.

Franco

So while they’re doing the survey, it’s very inexpensive to provide that water. So otherwise for the survey to come back just to do that is much more expensive. Yeah.

Curtis

So at a bare minimum, you’re looking at your architectural engineering, right? You know, surveying and soil testing. Those of four components are kind of like your bare minimum.

Franco

Sure.

Curtis

And then it’s adding on from there. So, I mean, I usually tell people to expect, you know, between their architectural fees, engineering fees and that kind of those core components, you should probably expect, obviously, depending on the architect. Right, Because architectural fees can range widely, too. But I tell people, hey, plan on 30 to 70 or maybe even 80,000 for all of those components out of pocket.

Curtis

Right. At a minimum. And it may be if you add in there’s other consultants we talked about that maybe 100 grand that you have out of pocket on a custom home.

Franco

Yeah, depending on the size of the custom home and also depending on the level of service your architects can provide. Sure. And by that I mean is it just design plans and some city plan. So kind of the bare minimum permit and then your builder, someone like you is going to have to figure out a lot of details.

Franco

So that says that architect, we don’t like to do that. We rather give the builder a proper set of drawings with enough detail to actually understand the project and how it works. So but that’s also it’s fee driven. So provide more detail, obviously greater fee, more time. Yeah. And then is your architect going to be involved during construction?

Franco

If they are? More than likely it’s on an hourly basis. There’s going to be not a minimum, but I would say you would budget so much a month. Where those funds are going to come from is going to come from the loan, or is it going to come from out of pocket? And the interior designer, depending on how their their fees are structure, whether they’re purchasing items and selling them to you or they’re just billing you for hourly basis?

Franco

There’s a lot of other I’m into a whole nother podcast just on that, I think.

Curtis

Yeah. I guess to wrap this up, can you really effectively answer the question, what does it cost to build a custom home?

Franco

I think the answer is yes, you can, you can. And the answer is going to be that there’s a lot of variables that go into it, but there is a starting point. And I think for a custom home and we didn’t really talk touch too much on it, but I would say in the Houston market you would probably start about $275 a square foot and go up from there.

Franco

In my opinion. Navi building in the floodplain, maybe you look at it 300 and up. So it’s a very but a lot of that again, back to the analogy of what goes into the basket in the in the shopping cart, what’s.

Curtis

In the bag of groceries.

Franco

We know it’s salmon, but is it salmon now organic and coming from some other source? And, you know.

Curtis

The wild caught Alaskan salmon or farmer is Norwegian.

Franco

Yeah well, there is if for some reason, you know somewhere in a lake in Texas. So a lot of those components drive the cost unfortunately.

Curtis

Yeah. So the key is for the consumer to understand, you know, kind of what’s included in that price per square foot that they’re getting from builders. And then more importantly, just keeping in mind that that is a rough initial guide number. I mean, we’ve actually had people come back to us after after I hear that this happens, they come back to us and they’re like you said, we could build for $300 a square foot.

Curtis

Now this is $350 a square foot. Mike Well, yeah. You mean you added in the $15,000 built in pizza oven in your kitchen? And I mean, what do you expect?

Franco

Well, yeah. And I think again, those are great. So those are things that I tell my clients like they, they affect cost but they’re, they don’t affect the build of the home in the way that I mean structural components. We always like to tell our clients let’s build the best thermal envelope for you that we can. That’s feasible that you want to afford because I can’t come back and fix walls and windows and roofing and things.

Franco

I can come back in maybe in ten years and maybe remodel a bathroom, upgrade a bathroom because you have little ones and you know, when do something nicer. A little bit later we can do that. But the kind of the the jewelry and the house jewelry that usually the stuff that I can now say can be replaced. But the components and makeup of home, again, thermal on the walls, foundation, roofing, those are the things that we can’t come back and redo.

Franco

And so we rather build those. This is to the best that we want, that the client wants to, and we educate them along the way to make sure they can make great decision about.

Curtis

Things like appliances and light fixtures. Are easy to replace.

Franco

Yeah, just pop them up, up and back in. I mean, I rather much do that and say, Hey, hey, Franco, now we want to change out that that set of windows and put in this magnificent sliding glass door, whatnot. I was like, Oh, that would have been a lot easier to do that. You know, three years ago when we were here, we could now we have to reengineer, be rip things out and then are you living in the house?

Franco

Because if you are, it’s, you know, that’s adds a whole another layer of complexity to that. Yeah.

Curtis

I think people have to be careful also not to to trick themselves into believing something that’s not realistic. So for example, if three builders are giving you prices of, Hey, we started 275 303 20 a square foot, right? And then a fourth guy comes along and says, No, I can build that for you for $200 a square foot.

Curtis

People want to believe that. They’re like, Man, I know there’s somebody out there that can build it for what I want to spend. I can feel it. I know it’s true. And so they trick themselves into believing that.

Franco

And then they get what they you know, what my wife found recently? We purchased a new vehicle for her. So we we did our research and yeah, you can find a less expensive, but then you go look at what’s available at that price point that really what you’re looking for in terms of a there’s a basic package to it, but depends on the amenities you want inside of it.

Franco

And so then that costs unfortunately costs money. So then you have to be realistic about what am I getting for that price? And a lot of times I tell people, go and tour these houses or go look at some of these projects in the construction and see what the builders are providing. Because if he has a clean job site, more than likely he’s someone who is going to take safety into account.

Franco

But also that tells you his process and how we build, because it’s like you take more pride in the work that you’re doing if you go, I’ve seen a lot of houses where I drive by and their stuff it. I mean, there’s junk everywhere. And I just think to myself that that’s the outside of the house. What is going on in the inside that that structure that I can’t see?

Franco

And is that reflective of the quality that’s going into the home now? I’m not saying I’m not trying to talk bad about, you know, dirty job sites because they all get like that from time to time. But the point is, there’s a lot that goes into it other than just that’s what that price per square foot equates. It’s kind of a loaded question.

Franco

There’s so much that goes.

Curtis

Into it, but there’s no magic formula to get to get the same thing for cheaper. You know, you can’t you can’t expect to buy a filet mignon for the price of a Big Mac.

Franco

No, of course. Yeah. I mean, well, maybe. But what are the filet mignon come from? How long has it been sitting out? All right. I think part of it is also it’s it comes down to, you know, it’s it’s either going to be size, so quality or scope. And by by quality, you mean to what level we’re building.

Franco

And by scope I mean how big. So if I have a client that says I’ve got $2 million to build a 4000 square foot house, then I’m like, okay, that’s a great quote. You know, that is a great quality for the amount of scope. But if I have to then double that house or take that 2 million, they say have a million for four for 4000 square.

Franco

Now we cut the quality in half and that goes into everything it me as an architectural design. I’m not cannot do these large expansive openings with a lot of glass and multiply doors. You might do a little bit simpler. We may not have big broad overhangs with the woods off underneath it that are staying out of wood. We might something that maybe it’s pine, it’s going to get painted.

Franco

There’s a lot of that we may not do. Stucco might be going to another part of like a Hardie panel or, you know, so and we may not do flat roofs. We may have to go to a pitch roof with a shingle and or something else, because, you know, at that price point, you know, we can do so much more, but it just comes down to scope and quality.

Franco

Yep.

Curtis

Well, I think that’s about all, all we have for today. And I really appreciate you coming today and being with me.

Franco

Yeah, I appreciate it.

Curtis

Before we close, go and tell everybody how they can contact you, your website, your social media, all that kind of stuff.

Franco

So you can find us on the web. Al Brown Architecture and construction. You can also find us on Facebook and on Instagram. And, you know, you Google us, you’ll see our homepage there and it gives you all the information you need and look forward to hopefully hearing some of these folks and also working with you in the in the future.

Franco

And thanks again for letting me be on the podcast.

Curtis

Yeah, thank you. We’ll be sure to link all your information and our show notes on the YouTube notes so people can find you. And if you’re in Houston, you want to build, definitely you put Franco and his team on your list to interview and see if they’re a good fit for your project. And thank you guys for joining us again today on this episode of the Your Project Shepherd Podcast is the start of our second season.

Curtis

We hope that you get some valuable information to help you make the right decisions in your journey to build, remodel or buy a home. If you have any questions about this topic or anything really, you can email them to me at podcast at your project Shepherd dot com and we’ll discuss those at the end of each season. I hope you’ll join us again next time.

Curtis

Bye bye.