Our Million Dollar New Build Fixer-Upper - Chapter 1
Chapter 1: Slow Down!
We just “finished” building our first house and we learned the hard way everything NOT to do, everything we SHOULD have asked, what kind of builder NOT to hire, and the list goes on. Our only saving grace is that another family out there thinking of building a home, will be spared the problems we had to face by reading our story. Our house building story will be broken up into a series because there are too many details to cram into one article. And just giving an overview won’t help YOU.
This won’t be your typical “Top 10 Mistakes When Building a Custom Home” blog post. This will be an opportunity for you to see our experience from start to finish without actually living it and without losing the money we did. It’ll include text, images and videos as needed. Whether you’re hiring a builder or doing owner build, our story is for you. We had a builder manage the first half and were owner builders for the second half.
Our house build tested our marriage like never before (even though we were certain it wouldn’t). The unexpected problems we had to fix along the way took so much time away from my work that my business and income dropped by 70%, causing months of recovery after moving in. The build also motivated my wife and I to start our own home building business to help prevent future families from experiencing what we had gone through. So a year after we moved in, I got my general contractor’s license.
This house build obliterated our savings, and led to masses of debt in the form of an auto equity loan, and 2 personal loans just to finish the house enough to live in safely, but still not even fully finish it. We spent over a year after moving in finishing the painting and basic landscaping.
When the house and basic landscaping is actually done, we will have gone $110,230 over budget. We’re currently at $80,230 over. The fence, additional dirt work, grass and other basic landscaping features will cost another $30,000. And this over budget number does not include the $66k of contingency that was used from our construction loan.
You would think that spending that much money would at least be made up for by us not having to spend much of our own time. Nope! We spent over 500 hours during the last 6 months of our house build keeping the project from total collapse. Some of that was spent managing subcontractors because we were owner builders for the finishing phase. The general contractor we hired only managed the build from excavation through mechanical but we still played a large role during the mechanical phase and had to be on site often during framing to make sure changes were being communicated.
Aside from managing subcontractors, some of our time was spent cleaning up messes caused by our builder and the rest was us doing actual work on the house ourselves, to save money and ensure it was done to our standard. For example, which you’ll hear more about in detail later, we spent a full week redoing the ductwork in our HVAC system because it was so horribly installed. If you’re curious, you can watch the video showing how we gave a massive upgrade to the HVAC here.
Because the original HVAC install passed local codes, which were very loose, we couldn’t force our builder to redo any of it. And don’t worry, the HVAC system isn’t the only thing we had to redo ourselves.
In addition to the extra money we had to spend, I experienced a big loss of my income because of the time I had to spend. I’m self-employed so I earned $30k less in 2023 because of the time spent on the house build and it took throughout 2024 to recover. This house became a huge financial strain that we’re still patching up. But it didn’t have to be that way.
And with all this we still had to sacrifice some things that we wanted originally. And the crazy thing is, it all could have been avoided if we knew what we know now. If we can save one family from going through what we just did, it would have been worth it. Our stress was through the roof (literally) over the last year because we had to deal with this in addition to being parents of 3 young kids.
The overarching lesson that we will keep coming back to throughout this series is to slow down! We were in such a rush, we didn’t even give ourselves enough time to do proper research to avoid some of the issues and hire better people. But even if we had slowed down, some of the problems were due to us not even knowing how to vet contractors before hiring them or how something should have been done until after.
And just having hired a better builder would not have solved all of our problems, of course it would have helped, but there is still a lot of responsibility on our shoulders to have ensured the builder was following the best processes for our house. We thought we were hiring the right builder but we didn’t do our due diligence in researching thoroughly whether he was qualified to build the type of house we wanted. We also made mistakes in some of our design choices and some of the contractors we hired during the finishing phase due to our ignorance.
To date, if you include the mortgage combined with cash we’ve spent and other loans taken out at the end, our house cost 1,004,186. And we don’t live in California. We built our house in a rural town in Southern Utah. We built in one of the lowest cost of living cities in Utah. And we did not build a mansion. Our million dollar new build fixer upper is only 3,100 square feet above ground, with an additional 1600 square foot unfinished basement. The lessons we’ve learned are helpful to anyone building a house with any budget.
The mistakes made during the house build by us and contractors is why we went over budget but the broader economic problems are the reason why the house was so expensive to begin with. The construction industry has a lot of problems and we’re on a mission with Finding Home to fix those, at least on a local level.
Since moving in, we’ve had a major chimney leak, and toilet leak and the drama doesn’t stop there.
This whole process has taxed our family greatly. Hopefully after reading our story, your experience will be much better. EVERY problem we experienced is avoidable when you have the right systems and processes in place, which is what we promise to provide if we build a home for you. Our story will give you context for why we do things the way we do them.
Let’s go back to the beginning; the pre-construction and design process. Our problems began there…
Phase 1: Pre-Construction
We’ve been planning to build a house for years and have drafted many many floorplans over the years. In the spring of 2022, we finally had the funds to start the process. Our townhouse that we’d been renting was getting smaller by the day once our 3rd child was born. Our small backyard cement patio wasn’t enough for our 2 boys’ robust energy and it was getting difficult to have to walk to a nearby park for them to play outside. We didn’t have the best neighbors and we were getting eager to leave. We let our impatience get the best of us though as we wasted no time to find a builder.
There was a builder in Southern Utah that I knew a little bit through a consulting job. I saw him as competent because he had a following on YouTube. So I called him to see if he was available to take on a new house.
Lesson 1: Don’t trust someone just because they appear competent on social media.
We met with him to “interview” him but I already had it in my head that I wanted to hire him so it’s not like I evaluated him with the right lens.
We had interviewed one other builder a year before but he died sadly in an accident. And due to our hastiness to start building in the Fall of 2022 we didn’t bother to research any other builders in the area. I did a quick Google search but didn’t give it enough time to find other alternatives.
After moving into our house, we found out about a local home builder that would have been so much better for us but did I bother to look at the beginning? No. Because we “HAD” to start building in the fall of 2022. No we didn’t, we were just desperate to have a house after 10 years of renting.
We won’t disclose the builder’s name because my intent for sharing our story is not to seek revenge towards our builder, it’s to help other families have a positive home building experience. And I can’t speak to everyone’s experience with our builder, I can only judge based on our own. Maybe he’s a better builder for a certain style of house and ours was just way out of his comfort zone. That partly falls on him for not understanding his own limitations but it also falls on us for not asking. That aside, there were still some big missteps that no builder should be falling into.
Our builder took an upfront fee to book him that was non-refundable. This also paid for him to be involved in the design process and to help us with planning. The extent to which he was involved during the planning process was simply forwarding the emails of the blueprint drafts from the architect. He didn’t ask us questions to help us consider this or that regarding our house design. Again, we’ve never done this before so we were clueless as to what pros and cons there are to certain design features. We were hoping he would educate us on that but he never did.
The mistakes we made in certain design aspects of our house will be discussed throughout the whole series, not all upfront. That’s because we’re telling our story in chronological order and many of our design mistakes we only discovered at certain points during the actual construction process. You’ll also hear from my wife on the pros and cons of certain finishing choices. And we’ll share as many pictures and videos as we can throughout our story.
Lesson 2: Don’t pay a builder a deposit unless you have in writing exactly how they’re going to help you during the planning process. They must quantify it and be specific about what help they’ll offer.
It’s okay if they want a deposit simply to book them and they have no intention to help during the design process but that has to be communicated clearly. Our builder told us his deposit would cover him helping during the design process but he didn’t. He should have been creating a rough budget from the first draft of our house so that we knew whether were within the zone of what we could afford or whether we needed to adjust the plan. He didn’t create a first budget until after we approved the architectural plans.
We would have been better off just working with an architect directly. There are so many problems that came up later in our build that could have been resolved in the blueprints from the get-go.
One of those problems was not doing a mechanical plan.
Lesson 3: Always create a mechanical plan during the design process.
This plan includes a detailed drawing of where all the HVAC ventilation is going, plumbing and electrical. If you don’t do a mechanical plan, you could end up not having the right spaces to accommodate the system you want or need. And then you may need to go back to the architect to adjust a few things. Our builder said that type of plan isn’t necessary for residential. It absolutely is. And yes, you’ll be spending a bit more money on that, but it will save you far more during the build. Later, we’ll get into the costs we incurred by not having a mechanical plan.
Lesson 4: Wait to buy your lot unless certain conditions are met.
We bought a lot a month after we paid the deposit to our builder but we didn’t have architectural plans yet or a budget. And we ended up spending $15k more on the lot than we would have spent if we waited 6 months because the housing market dropped in value (which we couldn’t have predicted). So we’re not saying to try and predict house values to decide whether to buy your lot at certain times but we also spent a couple thousand dollars in extra interest to hold the lot for those 7 months before we started building. Some people will say that it’s easier to design the house when you know what lot you’re building on but for us, we already knew what type of lot we were looking for, which was 1/2-1 acre on flat land in a development where you could build a basement. That’s all we needed to know to design the house. But because of our hastiness, we jumped the gun on buying a lot too early.
Now if you fall in love with a property and you can’t imagine building your house anyone else, then it may be worth it to purchase the lot to guarantee you have it and you’re okay to pay extra interest to get it before someone else. But it‘s also important to have a real estate agent analyze the current market and whether there’s a lot of competition or not. So our advice here is not universal. We wish that we would have waited to buy our lot because it turned out that the competition was extremely low and we started building 6 months later then we thought we would but we don’t regret the lot that we did purchase. I would say, that you need to get more details about the development as well before buy the lot because we didn’t know the sewer lines were so shallow and so we ended up needing to install a sump pump in the basement for when we have a future bathroom down there. That’s extra cost that we could have used as leverage to negotiate a lower sales price on the lot.
Don’t let the fear of missing out cause you to make decisions too quickly.
Lesson 5: Before you approve the architectural plans get a detailed budget from your builder (especially if the architect is charging by the square foot).
We ended up spending another couple thousand dollars for the architect to update our house design after we approved it, because our builder came back with a budget that was way too high. Our builder told us we needed to review the architectural plans and approve it if there were no more changes. Then he was going to do a full budget. Do not let your builder do that! Get the budget from him before you approve the architectural plans. It’s on the general contractor to factor that extra budgeting time into his fee.
In our case, the budget came back not $100k over, not $200k over, even more than that, which you’ll read about shortly. We ended up needing to pay the architect extra money to shrink our house because we had already approved the plans before getting our budget from the builder.
So after the architect signed off on the final plans, our builder proceeded to update the budget based on the smaller house and when we got the updated budget back from the builder, it was the same! And the most annoying part is, we literally handed the architect a floor plan that we already designed ourselves and he basically copied and pasted it and finessed the technical specs so it was to code. So we already saved him a ton of time in the design phase, yet we still had to pay more than his normal fee.
The design and planning process should take just as long as the build itself if you’re designing a custom home. We only gave it 1 month. At Finding Home, we know how important the pre-construction process is because we experienced first-hand exactly what it shouldn’t look like. So we will not rush this phase and you’ll realize later in the construction phase how important it was to slow down during planning.
Let’s take a step back so you can understand all the details regarding the sequence of events that took place during the design process for our house and then we’ll explain how it should be done…
On July 27, 2022 we met with the architect and builder and gave him our floor plan ideas.
On August 3rd in the morning, the builder forwarded the architect’s draft of the main floor to approve before moving on to the second floor. There were some minor adjustments to the exact dimensions of rooms and spaces that architect made, but overall it was the same floor plan we gave him that we sketched up on an Ipad app.
On August 3rd in the afternoon, we emailed back our adjustments to the main floor. That’s right, only a few hours later we had “thoroughly” reviewed his drawing.
On August 9th the architect sent over version 2 of the plans with the main floor adjustments, second floor first draft and basement.
On August 10th we sent over a few changes to the 2nd floor and a couple more on the main floor. We also specifically stated we wanted enough wall room around every door for 5-inch trim. That didn’t end up happening during the build and we could barely fit 3 1/2 inch casings around a couple of the doors. This was because we didn’t get zoomed-in enough specs on the floor plan to realize there wasn’t space. We even sent a second email showing pictures of what we did not want regarding door trim and the architect and the builder missed that detail. This is not acceptable with a custom home.
We also ended up with windows too close to our fireplace to fit trim after rock was installed. I mention these examples of fine-tune details to back-up why you must slow down during the design phase so you catch these things. And 3D renderings are a must to see exactly what the floor plan actually looks like. At Finding Home, 3D plans are standard.
Here’s what the main floor looked like at this point so you can see how it’s very difficult to notice the inches of a space. For example, we couldn’t tell easily from this sketch how many inches there are between the door frame and the wall when you only have the basic dimension of each room:
On Friday August 12th, our architect sent us the final drawings for our approval with a first rendering of the exterior.
On Monday August 15th in the morning, we emailed our final changes to the architect and builder. And here’s a very dumb thing we said in our email, “We’ve scanned every inch and looked very closely at everything so this should be the last changes.” Nobody could possibly scan every inch in 2 days with zoomed-out plans that don’t even have all the measurements listed. If we had known then what we know now…
By the afternoon on August 15th, the architect sent over the final plans for one final review.
On the morning of August 16th we spent a few hours going back and forth with the architect on some last changes to the exterior design of the house. Then by 2pm in the afternoon, we sent our approval email. We were so rushed! Such fools! We weren’t under any legal deadline to approve the plans by a certain date. We were too hasty to get the ball rolling so we could start building in time to dry in the house before winter and our builder didn’t try to slow us down either and joined the fast train.
He immediately sent the architectural plans to the engineer to produce engineering plans for a few thousand dollars. At this point, we still did not have even a rough budget from our builder. Architectural plans are enough to create a close-enough budget.
So we received the invoice shortly after for the architectural plans for $5,729. I wish that was all we ended up paying.
For the next couple weeks, we emailed back and forth with the builder on some details on finishing choices so he could put together the budget. On September 19th, we got updated pre-approval numbers from our lender that gave us a budget of $600k. We shared this information with our builder and at this point he still had no comment regarding our house design and the budget of it.
On September 21, our builder, for the first time, commented on our budget, 36 days after we approved the architectural plans and sent them to the engineer. He said this in his email, “I noticed the basement is much bigger than original. I did not catch this. We need to reign in square footage. Right now you are just over 5,000 sq. ft. I think we need to pull the basement and do a stem wall and then pull the single car garage.”
I’m thinking…we just paid the architect and approved his plans, and you’re now telling us over a month later that our house is too big. And the engineer was already working on our engineering plans as well. You see how he said, “I did not catch this.” That’s because from the beginning he wasn’t paying attention. That should have been a huge red flag to fire him but our blinders were up.
Over the next couple days, I was asking questions about what needed to be cut and pressing him for the actual budget cost, which he had yet to provide. And one of his responses was, “I started doing takeoffs and I could not understand why things were so much and some bids came in higher than expected. I then looked at the square footage and added it all up and 5,000 square feet is too much to fit within your budget.”
I’m thinking, you just barely noticed the square footage of our house?? It’s listed on the first page of the blueprints! He didn’t have to add things up. Only in hindsight did I realize that this meant he really didn’t even look at our blueprints until the end of September when he was getting bids, a month after we had approved the plans with the architect. He wasn’t going to start on the budget until we approved those plans and was even waiting for engineering plans before finessing the budget.
Make sure that if you ever build a custom home, that you setup the expectation with your builder that the architectural plans will remain pending and a work in progress until you have a budget breakdown. Also expect that you’ll likely need to go back to the architect a few more times after the engineer has a look and after mechanical plans are drafted. It should be a circular feedback loop between the architect, structural engineer, mechanical, engineer, builder and you. For our house, it was a costly linear process. If we knew then what we know now…
On September 24, he finally sent us his budget, and it was $970k without land. Our budget at that time was $650k with land and the lot was $125k. So we were about $400k over budget. If he had created this initial estimate before we approved the architectural plans, and before the engineer created their plants, we wouldn’t have spent a couple thousand dollars extra during the design phase.
It became immediately clear that we would not start building in October of 2022. So how did we respond to his budget being so high and what happened next? To be continued in Chapter 2…
If you build a custom home through us, you won’t have to experience a stressful design phase like we did. The process will be slower, more meticulous and we’ll use 3D construction software to see your house from every angle and resolve issues before they’re built. Communication between the architect, engineers, us and you will be circular until every detail has been thought through and every problem resolved before a shovel ever hits the ground. It’ll save you thousands, if not tens of thousands of dollars during construction. And you’ll read more about the problems we faced during construction because of a lack of planning in later articles. But you may still want to consider just building one of our plans that already has all the kinks worked out. Let us know if you want to meet for a free consultation.