BIG NEWS FOR IDO!

When the dust settles there may be quite a few existing commercial buildings selling for a song and a dance.

That is why when I send out a bid saying this bid is valid for 30 days, and now 30 days can mean 10% increase in material costs. I just got an email saying insulation, rock, and steel are expected up another 8-10% in April. That is on top of the steady increases since October. It is crazy how projects are moving along. Mostly due to low interest rates, but it is going to hit a tipping point soon if it doesn’t slow down soon.

James Holst wrote:

Long story short costs have exploded for nearly all materials. For example, the steel needed to complete this build went up $100,000 since last fall and to get to that number I had to make some major compromises in the materials being used. That’s not a typo. $100,000 in 3 months.

I’ve heard there is a shortage of steel. Didn’t really pay much attention until now.

buckybadger wrote:

Smart choice. Your business will be better for it in the long run. It’s better to walk away or hit pause than make a financial mistake.

Many people are finding themselves in a similar situation on a smaller scale with residential builds. The perfect storm of Covid supply shortages coupled with historically low interest rates and billions of dollars inflating the economy have brought many to this same point.

We’ve got a spot to build a new home and stand to make money selling our current house but are choosing to wait. With the increases I’m not slapping an additional $100k onto the build cost. Interest rates are low and drive the demand to spend, but it doesn’t change long term valuation. Locally here we are running into issues with people wanting to build and take advantage of low interest rates, but costs are absurd. Banks are pulling back as the valuation of a 4 bedroom 2 bath home in rural MN with mid-tier finishes is tough to value and finance at $500,000 even if it now costs that to build it. People are going to end up being upside down in their homes again like the last housing market collapse, but for different reasons this go-round.

I do work for the local yard here in town on the side. 2×4 studs are at $8 and they are hard to even get. Treated lumber is worse. They sold a semi load of 4×4 posts in less than 48 hours last month to contractors and average Joes walking in the door. The waiting list for durastrand and other sheathing products is like Packers season tickets.

Sorry to hijack James but is any kind of lumber hard to find or is it just certain structural wood products like studs, plywood, etc? I need to put new trim in my house, have finishing wood products gone up too or are they more commonly found?

mojogunter wrote:

That is why when I send out a bid saying this bid is valid for 30 days, and now 30 days can mean 10% increase in material costs. I just got an email saying insulation, rock, and steel are expected up another 8-10% in April. That is on top of the steady increases since October. It is crazy how projects are moving along. Mostly due to low interest rates, but it is going to hit a tipping point soon if it doesn’t slow down soon.

<div class=”d4p-bbt-quote-title”>James Holst wrote:</div>
Long story short costs have exploded for nearly all materials. For example, the steel needed to complete this build went up $100,000 since last fall and to get to that number I had to make some major compromises in the materials being used. That’s not a typo. $100,000 in 3 months.

Last year to this year, our raw steel price is up 110% and still rising.

eyeguy507 wrote:

<div class=”d4p-bbt-quote-title”>buckybadger wrote:</div>
Smart choice. Your business will be better for it in the long run. It’s better to walk away or hit pause than make a financial mistake.

Many people are finding themselves in a similar situation on a smaller scale with residential builds. The perfect storm of Covid supply shortages coupled with historically low interest rates and billions of dollars inflating the economy have brought many to this same point.

We’ve got a spot to build a new home and stand to make money selling our current house but are choosing to wait. With the increases I’m not slapping an additional $100k onto the build cost. Interest rates are low and drive the demand to spend, but it doesn’t change long term valuation. Locally here we are running into issues with people wanting to build and take advantage of low interest rates, but costs are absurd. Banks are pulling back as the valuation of a 4 bedroom 2 bath home in rural MN with mid-tier finishes is tough to value and finance at $500,000 even if it now costs that to build it. People are going to end up being upside down in their homes again like the last housing market collapse, but for different reasons this go-round.

I do work for the local yard here in town on the side. 2×4 studs are at $8 and they are hard to even get. Treated lumber is worse. They sold a semi load of 4×4 posts in less than 48 hours last month to contractors and average Joes walking in the door. The waiting list for durastrand and other sheathing products is like Packers season tickets.

Sorry to hijack James but is any kind of lumber hard to find or is it just certain structural wood products like studs, plywood, etc? I need to put new trim in my house, have finishing wood products gone up too or are they more commonly found?

At our yard prices on everything from structural products to finishing products have jumped. The inability to find them varies from item to item. You could walk into the yard here and find trim, doors, etc. but expect to pay roughly double what you would have paid for them 1 year ago.

I understand things have gone up because of Covid, low interest rates, stimulus money, supply & demand, etc. BUT everyone that is handling materials are also reporting RECORD PROFITS! Tells me all suppliers are upping their normal profit margins. So if they all add 10% it is not hard to figure why everything is priced out of this world right now. JMO

1/2″ ply over $40
3/4″ ply over $55

Attachments:

1. Plywood-pricing.pdf

Eelpoutguy wrote:

1/2″ ply over $40
3/4″ ply over $55

That’s $4 a sheet cheaper then what is moving off the racks here. You’ve got yourself a steal!

Sorry to hear that James.I think you made a wise decision.
Keep your chin up better days ahead.

Eelpoutguy wrote:

1/2″ ply over $40
3/4″ ply over $55

Menards
1/2 $34
3/4 $37

May want to lower your standards for a bit.

munchy wrote:

<div class=”d4p-bbt-quote-title”>Eelpoutguy wrote:</div>
1/2″ ply over $40
3/4″ ply over $55

Menards
1/2 $34
3/4 $37

May want to lower your standards for a bit.

$50.48 before the 11% but still cheaper!

https://www.menards.com/main/building-materials/panel-products/construction-panels/sheathing/plywood-sheathing/3-4-x-4-x-8-plywood-sheathing/1231182/p-1444431334153.htm

$42.48 before 11% rebate here in Rochester

:edit:

Hmmmmmm…..I just scrolled through a few stores up there and they’re all $42.48. How is it an $8 difference for you EP?

Unless my contractor account makes that big of a difference?

Attachments:

1. 

   Screenshot_20210310-194037_Menards.jpg
   

munchy wrote:

May want to lower your standards for a bit.

Gonna need some serious plywood beer goggles for those standards

Eelpoutguy wrote:

When the dust settles there may be quite a few existing commercial buildings selling for a song and a dance.

Exactly. I know this doesn’t compare the vision of designing it yourself, but man they are vacancies all over the place in commercial property. A retrofit or a structure already up may just be a better deal in the long run anyway.

Deuces wrote:

<div class=”d4p-bbt-quote-title”>munchy wrote:</div>
May want to lower your standards for a bit.

Gonna need some serious plywood beer goggles for those standards

Possibly, but for standard exterior wall and roof sheathing, honestly anything that meets building code standards will be fine.

Hey James, see how much the old Gander in Eden Prairie is going for! You’d have ALL the room in the world for everything you’d want and even underground parking!

munchy wrote:

Hey James, see how much the old Gander in Eden Prairie is going for! You’d have ALL the room in the world for everything you’d want and even underground parking!

BK and I are going to go in on that location “halvsies.” IDO gets the retail space to convert into offices and studio. BK plans to flood the parking garage and raise catfish.

It’s important to utilize and diversify, I know some people in hydroponics for those catfish.

With Hamms on tap? Sweet!

James Holst wrote:

<div class=”d4p-bbt-quote-title”>luttes wrote:</div>
Have you thought about trying a crowdsourcing initiative? Not sure how big the IDO fanbase is, but, you’ve got 90k subscribers on YouTube, $3 a piece and you’re to $250,000.

With respect… if a deal isn’t good enough for me to spend my money on it… I’m not going to ask anyone else to spend their hard earned money on it.

Do know I appreciate you taking the time to offer the suggestion.

I’d have to agree with James.

Maybe I’m assuming here but it may be a generational thing. My ornery old man jumped out and got all worked up when crowdsourcing was suggested.

Earn your own money and pay your own way.

Hard work pays off. Maybe not on your schedule but it’ll happen.

Deuces wrote:

It’s important to utilize and diversify, I know some people in hydroponics for those catfish.

‘Green’ Catfish?

munchy wrote:

<div class=”d4p-bbt-quote-title”>Mr.Beads wrote:</div>
It’s important to utilize and diversify, I know some people in hydroponics for those catfish.

‘Green’ Catfish?

Was thinking more along the line of “Catfish and Herbs”.

There are alot of smokers on this site.

BK and I are going to go in on that location “halvsies.” IDO gets the retail space to convert into offices and studio. BK plans to flood the parking garage and raise catfish.
[/quote]

You guys are killing me!

Seriously tho,,,, wait for this to settle down.

Awesomeness ! Keep up the Great work !

tweed

That is fantastic. It has been fun to watch your success grow out of hard work.

Congratulations!

People need to read the whole thread not just the first and last post to get the whole gist of the thread.

Well im late to the party and completely missed this thread but congrates IDO crew, well deserved.
Edit: As dutch said read the hole thread, which I didnt do until after I posted, but in due time you will get the well deserved new building!