Updated: Jan 25
It’s more than likely if you’re considering building a home in Redhill Forest it’s probably going to be a second home. Over the past 35 years I’ve owned six different second homes in various sizes and locations and always sold them at a profit. It’s a tricky mixture of personal interests, romance, and realistic analysis.
Better planning means a better outcome.
Either buying or building a second home is different than a primary residence. It’s usually driven by your romantic brain that envisions morning coffee looking out at the pines or a cozy fire during an evening snowfall. Next to your primary residence, a second home may be one of the largest asset decisions you make. And that’s where a great tension can exist between desire and fiscal prudence. I’ve never done a deal without first creating a spreadsheet (or several) with expenses, cash flows, and appreciation. That’s the upside, but you also need to think about the downside. The business term is called “exit strategy.” Sooner or later we move on in our interests, change of health, or family status (from divorce to grandkids). Before you get in, think about how you’ll get out.
In our own experience I look back and see how the pinball machine of life would occasionally spring us into an unplanned direction. I also witnessed friends and acquaintances who dove into house purchases with ideas and expectations only to find that in a few years that they had lost interest and sold their investment at a loss. My most critical piece of advice is: be uncomfortably realistic in thinking through what happens if “things just don’t pan out.”
Getting real about your budget.
My dad would say, “your eyes are too big for your stomach.” And, at age 10, barfing up a too big of a meal of spare ribs on the den floor after a trip to the Apple Tree Shanty, serves as a cautionary economic tale. A builder friend recently shared an e-mail with me of a prospective client’s requirements list that included four bedrooms, three baths, a workshop and indoor spa — all in 1,200 square feet. Not! With a knowledgeable glance we both knew that was at least a 3,000 square foot wish list.
Currently, in the fall of 2022, some rough rules for per square foot costs for building in Redhill are $300 for DIY bare bones, $350 for mid-range quality, and $400+ for resort quality. Excluding land costs, for a 1,400 square foot house that scales to: Low $420,000, Medium $490,000, and High $560,000. Current spec homes being built in the subdivision are in the $700,000 - $900,000 range at roughly 2,000 square feet in size. There are now a few homes in Redhill Forest well over $1 million and it’s not too crazy to believe that, in the future, larger new homes will push the $2 million dollar ceiling.
Now matter how you push, pull, or twist the line items of your building budget, sure enough it’s going to fall into one of those per square foot buckets. If you think you can save a lot of money with a do-it-yourself approach, depending on your skill level, you’ll still probably need to pay for specialized subs like plumbers and electricians. You and your contractor should be able to get a pretty solid handle on labor and materials. But remember, the number one factor that drives budget overruns is owner precipitated changes and upgrades.
When we built our Redhill house I was the architect, designer, and accountant. Early on I created a line item list in Excel and started filling in the blanks with rough estimates. You can easily find on-line calculators that provide industry averages for square footages of things like framing, drywall and concrete. I ultimately turned those line items into a chart of accounts in Quickbooks to keep track of all project expenditures. You can download my construction line item list by clicking below. You’ll also see each line item by percentage as you adjust the size of the home and the per square foot cost.
The worry about overbuying.
I remember worrying about our first second home purchase. We spent a week driving around the Vail Valley with a realtor looking at condos and townhomes in our price range. There was one duplex that we really liked, but naturally it was at the top edge of our budget. To make it work it would have required us to supplement the cost with renting it during peak ski season. We know plenty of folks who comfortably rent, but we’re just not those kind of people, so we adjusted our sights downward. Yet even at a lower budget we asked ourselves if the monthly mortgage payment meant we couldn’t take trips or would feel obligated to have to use the property for every long weekend or holiday. We found a townhome that seemed to be in the “Goldilocks” zone (just right) that we did not have to rent and didn’t suck up every discretionary dollar. Here’s what we didn’t expect — after owning it for four years we decided to move to the Vail Valley full time. We sold it for a healthy profit and bought a home down valley (sunnier) where we lived for the next twenty years. We really hit the life pinball flipper hard on that one.
Defining your use case.
How often? Who? and When? are good questions to think about when evaluating you might use a resale home or design one from scratch. If it’s just a family cabin, then (depending on your family size and dynamics) a single or 1 1/2 bath may be enough. Expecting visitors? Then a guest bath is going to make for happier guests and happier owners. Are you planning work remotely? A comfortable, well lit work area that can be isolated from other house activity should be considered. Converting to a primary residence upon retiring? Beyond the features of a home, you’ll want to think about day-to-day shopping, medical care, and social connections with neighbors.
How does the house work if you decide to rent it on a long or short term basis? Can it be expanded or reconfigured if your family grows or your kids start their own families and come back for visits?
Plan for the future.
Bringing together both the economic viewpoint and your potential use cases can help better inform your planning decisions. For instance, as your wealth grows you can make phased improvements. Here are a few examples.
– If your site is on a higher grade, excavating for a full-walk out lower level will add some incremental cost up front, but it can give you up to double the square footage for a future build out.
– With careful site planning you can pre-prepare an area for a detached garage by grading and trenching pipe for future utilities to be pulled through.
– If you’re on a very sunny site (along Bonell or on the ridge above Middle Fork) think about roof angle and house rotation to take advantage of solar panels. Even if you hold off on adding panels, build a chase from the roof down into the house to pull wires in the future.
– Carrying costs could be reduced by short term rentals. Consider the convenience of lock off areas where you can store personal effects.
– Think of future resale. Try to avoid being quirky. I have walked through countless homes over the years and wondered why a counter height was weird or a door opened into a piece of furniture. When I designed our Redhill house I made sure that one of our bathrooms had a tub – even though we’re all shower people. Not for us, but for future buyers, our main level powder room could be expanded for another shower.
The lasting value of good design.
Good design doesn’t necessarily mean higher cost. Increasing road appeal with color and texture (like mixing wood siding with stucco or rock), breaking up roof lines and long wall sections can have three powerful benefits: (1) Raise the quality of the neighborhood by adding architectural interest, (2) increase your personal enjoyment and pride of ownership, and (3) improve resale value.
You can trace the arc of “mountain gentrification” in Redhill through its architecture. There are old A-frames of the 80’s, rectangular manufactured boxes of the 90’s, timber frame and prow homes of the early 2000’s, and resort mountain modern of the late 2000’s. In some of Redhill’s more deeply wooded lots, expanded cabin-style architecture still offers that true “mountainy” feel of snugness and seclusion. Lots with more openness and bigger views are ideal for homes with more glass and modern design.
For many years Redhill owners relied on local builders who constructed utilitarian homes based on designs evolved from mountain cabins. Solid. Comfortable. Unimaginative. Owners weren’t too demanding, were accepting of limited choices in a rural market, and on tighter budgets. Today, throughout the mountain communities of Colorado you can see a strong and persistent trend toward the higher design that started in the resort areas. Redhill’s location and building trends puts it more on a more modern trajectory akin to parts of Summit and Eagle Counties with more glass, use of stucco, and attached garages.
Getting back to “exit strategy,” think of where your yet-to-be-built home will be ten to twenty years out and think about how competitive it may or may not be in a future resale market. Spending $5,000 for some preliminary sketch ideas with an architect that your local contractor can then turn into a plan, or $20,000 - $40,000 for fully developed drawings will more than likely come back to you in future resale value - and then some. If you’re up for doing your own leg work, there are countless home plans for sale on the Internet. They usually run a couple of thousand dollars and are delivered as digital files that can be edited.
Buy versus build.
Toward the end of the process of building our Redhill home I did a rough analysis of the number of decisions I made starting with about 20 versions of floor plan design through picking the doorstops. That number fell between 5,000 to 6,000 choices. The good news is they didn’t have to happen all at once.
For us, there was no question that we wanted to build instead of look for a resale home. Our decision was driven by stumbling across a lot with an incredible view. If we were going to take advantage of that view, we’d have to build. You may find the perfect resale that fully sings to you and is move-in ready. Yet invariably there’s always a “gee wouldn’t it be nice to change this?” list. The biggest upside to buying a resale home is you don’t have to wait long to start enjoying the many charms of Redhill Forest and Park County.
Building from scratch can get you exactly what you want. But there’s a trap there. If visualization isn’t one of your strong suits, or you really don’t have the experience (or passion) of looking at home ideas (Dwell Magazine is a good place to get inspired) you may not know what you want. Indecision can get expensive as can overlooking small details (why didn’t we put an outlet there?!).
From my first floor plan design to getting a CO it took us twenty months. We might have been able to reduce that time by six to eight months had we gone the manufactured home route. I had had some experience with that process working on affordable housing in Eagle County. I looked at a variety of companies and found one that stood out above the rest in providing a good sense of modern design, excellent floor plans, and decent finishes. The company is Ideabox in Salem, Oregon and it’s architect/owner, Jim Russell, apprenticed with one of Vail’s top architects in the early part of his career. With our local contractor we drove out to Nebraska to one of the contract plants that Ideabox uses. The quality was solid, but ultimately we decided we wanted a larger home and some features we couldn’t get in an Ideabox. However, one of the their floor designs became a large part of the DNA of our final house plan. My takeaway from going the manufactured route is that it isn’t much less than stick building a house from scratch (maybe 10% savings), but probably faster, and a good choice for those who don’t have the time or inclination to work through all the details of the building process.
If you’re going to build, finding a reputable contractor is probably the most critical decision in protecting such a large investment. Start asking around. Good sources would be neighbors (even knocking on the door asking them who built their house), realtors, and tradespeople. I found our contractor during a phone call with the local septic tank service company. Once you’ve started a conversation with a potential contractor you should find out if he or she is licensed with Park County and for how long. Ask your potential contractor how much general liability insurance he carries and if you can be added as a named insured on the policy. If the contractor employs people, make sure there is a workers comp policy in place. Ask for three references and, if at all possible, tour a couple of homes the contractor built.
Know the rules!
Finally, if you move ahead, get up to speed early on Redhill’s building rules. You can download the ACC packet by clicking below.
It can be a great journey.
Our Redhill Forest building experience was a lot of fun. It was helped by the fact that we were very patient and accepting of the rhythm of Park County construction. We had a general contractor who had a great collection of sub-contractors and happily trusted us in making both design and material decisions. Because of our careful front end planning and continual involvement in project management we avoided any nasty and expensive surprises. Our turn at the pinball machine of life once again hurled us in an exciting new direction. Who knows if we’ll put another ball in play, but for now, we feel our Redhill home is a top score.
Don Cohen is a Denver native and has built several successful companies. He has worked on major economic development projects on both the Front Range and Western slope and has forty years of experience in investing in residential and commercial real estate.