New Homes & Rebuilds in Ocean, Monmouth & Atlantic County

Dream Homes / Atlantic Northeast Construction Nearly Famous Rebuilding Blog – 3-29-15 – Cost Overruns and Out of Pocket Expenses

Dream Homes Ltd.

Atlantic Northeast Construction LLC

Nearly Famous Rebuilding Blog –


Hello Sandsters –

Hope you are well and moving along with your project.

Today I am posting a paper I wrote for a response on the Stop Fema Now Facebook page which speaks to cost overruns and unexpected out of pocket expenses.

Facebook doesn’t allow one to paginate or use any type of spacing and I thought the blog format would be easier to digest.

Regarding budgeting and out of pocket expenses, if you have signed for a RREM grant under Path B, start with this calculation. Add your grant award, plus ICC money (assuming you had flood insurance at the time of Sandy), and any additional insurance money you received and you will arrive at your budget number.

If you have no additional funds and are unwilling or unable to borrow or invest your funds, this is the number which should drive your decisions. If you are contemplating improvements, either new or upgraded, which are not in the customary RREM scope of work, you can also include any additional money you are willing to invest in your home (either equity or debt). If you have signed your grant after 10/1/14, you will also up to $15,000 towards your design scope, in addition to your RREM grant.

If you obtain an estimate from a reputable contractor which is inclusive of the scope of work that RREM has decided is necessary to lift your house and that amount is less than your budget, you will not have to add any additional funds. If however, your budget number does not cover your total project cost, you have several choices.

If RREM assumed you needed a shallow foundation system and you ultimately need a deep foundation system, you can send them your soil boring, engineering and a revised estimate which reflects greater foundation costs and appeal your grant amount. In my experience, discrepancies in foundation design are the single largest reason for grant awards being increased. If the difference between your budget number and your project cost is not great (less than $10,000 or $15,000 as an example) often you may choose to just move forward and obtain the difference somewhere else, or cut non-essential items from your scope of work. Unless the issue is a foundation design discrepancy, often it is not worth the effort to argue the point.

The second most common reason that projects go over budget is changes that are made during the project. Changes are (unfortunately) common, always costly, and directly follow the Law of Unintended Consequences. It is rare that an item is added during a project which doesn’t affect a number of other aspects of the project.

The third most common reason is additional options that you may have wanted to add to your home for some time and are including in your scope of work. Yes, it is a great time to get that Trex deck, new room over the garage or concrete in the crawl/basement, but sometimes your budget won’t allow that. All items except for the actual foundation structure and height of elevation can be done at another time and this is an important point to remember. Any other cost overruns are caused by incorrect estimates based on unfamiliarity with this type of construction work. IE: It is very common for inexperienced builders and contractors to attempt to pass along the costs of their errors to the Sandsters. That is not a good thing at all, but sadly common. The market will weed out these folks, or they will drop out of the business, but in the meantime, experience counts. Unless the scope of work or plans change, or items are added to a project, we don’t add to our project costs when we make errors (and God knows we do make them.) We have completed over 70 lifts and we do not change our pricing in the middle of projects, but many builders do. I think that is atrocious – you are paying a professional for their skills and should rely on their ability and integrity.

Definitions & Important Considerations That Can Delay Your Project:

Lowest adjacent grade (LAG): This is an important elevation since the lowest point in your crawl space has to be even or above the LAG. That is important because even if you don’t want your crawl filled that much (so you have more storage space) you will not pass final zoning / final building if this condition is not met. LAG is defined as the lowest grade immediately next to your house. There can easily be a foot or more difference between one side and the other, or back to front, so if you wish to use the least amount of fill (maximizing room in the crawl) make sure you find the lowest adjacent elevation.

Elevation: Elevation refers to “height above sea level” and not the height above grade at the house or distance the house is being elevated. It’s easy to make a mistake with these descriptions and it causes much confusion. Example: If you are raising your home to elevation 11, your finished floor is 6 and your grade is 4.5, you are raising your house 5’ to elevation 11, or 6.5’ above grade. When you use the expression “elevating my home 5 feet” that means you are lifting it 5’ from where it is now. The expression “building or raising the home to elevation 11” refers to the height above sea level, not the distance you are lifting.

Survey: An exact depiction of what exists on your lot, from a top view.

Plot plan: A top view of what you are proposing to build, including new heights, stairs, entries, decks, etc.

They are not the same and you will need both for your project.

HVAC Elevation height in crawl space: This must be considered when planning your lift. This is the elevation of the lowest duct, furnace or air handler in your crawl space. Most townships require a minimum elevation of base flood, some townships have no restriction, some are at minimum BF+1 to the bottom.

You Tube Link to a Nearly Famous Rebuilding Seminar: If you’ve missed our seminars and can’t easily attend, here is a link

It is not edited and is about 2 hours so feel free to fast forward and skip around to watch what you like and need to know.

Remember – if you have a specific question, send me an email or a text. Don’t wait for a seminar or a site visit to clarify a point. Whether or not you are Dream Homes/Atlantic Northeast Construction client or not, I’ll always try and help you or guide you in the right direction. If you’ve sent an email or left a voice mail and haven’t received a response, try and contact me again. Messages are lost occasionally.

Note to Sandsters: Though I write this blog to help as many Sandsters as possible, Dream Homes Ltd. and Atlantic Northeast Construction LLC are new home builders and general contractors who are actively renovating and reconstructing projects up and down the shore. We actually do all of the work that I talk about in the blog. We work with private clients and Path B clients in the RREM program. Call, text or email to set up an appointment for an estimate on your rebuilding project.

That’s all for today Sandsters. I hope it helps you move forward. As always, call or write with any questions.

Stay well.



Dream Homes Ltd.

Atlantic Northeast Construction LLC

Licensed NJ New Home Builder License# 045894

Licensed NJ Home Improvement Contractor License# 13VH07489000

PO Box 627 Forked River, NJ 08731

Office: 609 693 8881 F: 609 693 3802

Cell: 732 300 5619




Twitter: foxbuilder

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