The Building Project That'll Ruin You Financially
“Budget does not mean your build cost.”
Matt says it early, and it is the kind of line that should be printed on every set of concept plans.
Today we’re giving you a reality check about money, scope, and the part nobody wants to talk about until it is too late. We’re joined by Brad McEwan from Sanford Buildco, and he is as blunt as promised.
The core problem is simple. Clients show up with a number. Designers start drawing a dream. Then everyone acts surprised when the price comes back 40 percent higher.
Brad puts it plainly. A million bucks is a great budget for a million dollar house. It is a terrible budget for a two million dollar house. The maths does not care how “reasonable” the brief feels.
The other trap is thinking the house is the only cost. Hamish calls out the extra nonsense around the build that can easily be another $150k before you even start. Fees, reports, services, prelims, site works, permits. All the invisible stuff that still needs real money.
Then there is the design reality gap. Clients don’t often know what things cost, so they lean on architects and designers. But designers are stuck between the brief and the budget, and sometimes the budget is not even honest.
Hamish’s advice to homeowners is almost boring, which is why it works. Be brutally honest about the number where the project falls over. Say it out loud early. If you cannot afford the design, finding out in six months is not a strategy.
The best move is to pressure test the budget before anyone falls in love with finishes. Matt and Hamish talk through their feasibility process and why it is not a “build cost”. It is a viability check. Yes or no.
They also talk about why square metre rates are a starting point, not a promise. A garage might be “just three walls and a roller door” until it becomes concealed cladding, automation, and fancy details. An alfresco might be “a roof and a couple of posts” until it becomes an outdoor kitchen with stone, cladding, and a fireplace.
Brad makes a point that every builder and designer should steal. You can point to one item and he can skew the cost massively based on how it is installed and what sits around it. Tiles are not just tiles. Glue, grout, sealing, waterproofing, labour, layout, edges. It all stacks up.
This is why exclusions matter more than the headline number. Pricing you see online often excludes a lot of the costs. Site conditions, power upgrades, sewer depth, drainage, access. Add a few of those and you can burn $150k without touching the “house” part.
The takeaway is not “spend less”. It is “get honest earlier”. If you cannot have the hard conversation at feasibility, Brad asks the obvious question. How are you going to have it when you are under contract and rock shows up as a $30,000 variation?
This is how major projects ruin people financially. Not one big surprise. A hundred small assumptions that never got tested.
LINKS:
Pro Clima - https://mindful-builder.captivate.fm/proclima
MEGT - https://mindful-builder.captivate.fm/megt
Biz Tech Guru: https://www.biztechguru.com.au/
Connect with us on Instagram:@themindfulbuilderpod
Website: www.yoursanctum.com.au/
Connect with Matt:
Instagram: @carlandconstructions
Website: www.carlandconstructions.com/
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[00:00:00] Matt: So we're continuing on with the pre-construction series, hey?
[00:00:04] Hamish: And we've got Brad here.
[00:00:05] Matt: Yeah, got Bradley here. Yeah. So with, the whole idea is to get as much information out as possible. I
[00:00:09] Hamish: actually think the whole idea of having Brad here is that he's so fucking blunt and he makes me laugh.
[00:00:13] Matt: Yeah, I know. Um, so again, coming to you from our major sponsor, Pride Climate Built To Last Studios.
[00:00:18] Again, thanks to Kaya and Wilderness Build Co for hosting us here. Thanks, Kaya. Um, it's a nice little setup. And if it's true, we just went and got a nice little taco for lunch. You know, we brought us- It's beautiful ... some delicious food around here.
[00:00:30] Hamish: Look at you guys go.
[00:00:31] Matt: That's adorable. Awesome
[00:00:32] Hamish: date.
[00:00:32] Matt: Awesome date.
[00:00:32] Um, today we- we're talking about project feasibility. Is your project financially viable. Like, but I think the first thing that I have, Hamey, is budget does not, like your budget is not your build cost.
[00:00:46] Hamish: Yeah, look, I mean, Duane Pearce talks about that actually a lot. Does he? Yeah, yeah. He talks about, so the, the, there's the budget to actually build the physical home.
[00:00:57] Matt: Yeah.
[00:00:57] Hamish: And then there's, there's the, all the, all the other [00:01:00] shit that's, or all the, and, and to use a term that Brad uses, all the other nonsense that's around that which costs a shitload of money. So you might say, "I've got $1.5 million to build," and then go, "Right, where's the other $150,000 coming from that's gonna get you to a point where you can actually start building a home?"
[00:01:19] So that needs to be put into the mix as well.
[00:01:22] Matt: But, but it still doesn't answer the question of like, when we have a client come to us and you, we get an amount of money, or we say in our pre-com process, this is what we wanna spend, and you look at a plan, and we spoke about in the first episode of the pre-construction series where was it a, a builder said, "Oh, I think about 900," and you looked and it was like 1.6.
[00:01:41] Hamish: Well, the, the client- Yeah ... so this, this, this is the other thing that you need to manage as well, because the client has a budget, and then there's the design, and then there's the reality of do those things actually meet. Yeah. And, and from our side of things, like that's where, that's our feasibility process, is actually to work out whether or not the bucket of money you wanna spend matches [00:02:00] the design.
[00:02:01] Yeah. And I think the quicker you can actually find that out, the better for everybody.
[00:02:05] Brad: Yeah. '
[00:02:05] Hamish: Cause if the client's got $900,000 and you know in your mind the moment you see those plans that it's 1.5, there's no point telling them in six months' time. You need to tell them like within 30 seconds of seeing them.
[00:02:16] Matt: And, and as, as we spoke about, clients aren't meant to know what it costs. I also feel sorry for architects and building designers where they get given a budget, um, they get also get given a brief, and they've gotta try match the two knowing that they're not gonna match. Yeah. And I think that's probably a really hard starting point to defend them.
[00:02:33] I know we always shitcan and joke about architects blowing the budget, but like for, put ourself in their shoes for two minutes, like it's quite difficult.
[00:02:41] Brad: Yeah, I don't envy their position. Yeah. You know, 'cause as we all know, clients aren't always honest about how much money they've got to spend. Mm. So if you're the designer, do you design their dream or their reality?
[00:02:54] And how do you know which one is which if they're not honest about- Yep ... the bucket of money they've got to spend?
[00:02:59] Hamish: And that, and that's probably [00:03:00] something that I'll, that I'll- Mm ... 'cause I know there is a few, uh, potential clients and homeowners out there that listen to this podcast. Be absolutely brutally honest with the amount of money you wanna spend.
[00:03:10] Like tell the building designer- The number, this project's gonna
[00:03:12] Brad: fall over,
[00:03:13] Hamish: right? Yeah, exactly. You know, what, what is the number that this project doesn't go ahead? And then it's about matching that reality versus the reality of what you actually need and what you want.
[00:03:24] Brad: Absolutely, 'cause a million bucks is a great budget for a million dollar house.
[00:03:29] It's a fucking terrible budget for a $2 million house. That's why we got you on.
[00:03:34] Hamish: That's so true, and l- let's, let's call a spade a spade here. Like a million dollars is a shitload of money. Like I don't have a million dollars sitting in my bank account, and if I went to go and build my home and I'm like, "Right, well, I've got a million bucks in my bank, I'm gonna go and build a house," like that's just not gonna cut the mustard these days.
[00:03:51] Like for a new home.
[00:03:53] Matt: Building is like w- I'll say, I
[00:03:55] Hamish: believe- And we're, we're building in 2026, right? In the middle of the year in 2026, a million dollars in my opinion is not [00:04:00] gonna build you a
[00:04:00] Matt: custom home. Cu- custom architecture is practically anything upwards of 7,000 square meter.
[00:04:05] Hamish: Yeah. I, I'd say six and a half to 7,000 is probably a,
[00:04:10] Matt: i- is probably- At the lowest end, by the way
[00:04:11] a-
[00:04:11] Hamish: and I would say if you really wanna pressure test your budget early on, I would be... That's what I'd be doing. Yeah. I reckon you could build a house for 6,000 a square.
[00:04:20] Matt: I've got one on site less than that right now. Yep. But it's been stripped out.
[00:04:23] Hamish: Yeah, and that's what I'm saying though. If you can stress test the budget at six and a half to 7,000- Yeah
[00:04:28] I reckon that's a good starting point. Yeah. But- And that in my opinion- ... what's that
[00:04:31] Brad: six and a half to 7,000 gonna get you in 18 months' time when you hit site?
[00:04:34] Hamish: Well, okay, that's, that's, that's- At 5% ... that's the, that's the other thing. But I'm saying if you, if you've got 270 square meters of floor plan and you've got $900,000 to spend, like the maths doesn't add up.
[00:04:46] Matt: And decks, garages, they're... I kind of don't count them in that space either.
[00:04:50] Hamish: Outside of that.
[00:04:51] Matt: Yeah. Yeah. They're, they're sort of like out of line items, um-
[00:04:54] Hamish: Well, okay, to give away some secrets, habitable space, we're dividing by [00:05:00] six and a half, 7,000. Yeah. And then we're dividing that by a half.
[00:05:03] Matt: Yeah.
[00:05:03] Hamish: And then that's what we're calculating our-
[00:05:06] Matt: Garage area,
[00:05:06] Hamish: yeah
[00:05:06] garages, alfrescos, and all that kind of stuff.
[00:05:08] Matt: Yeah, but that the... Yeah, but w- but the problem is they say, "Hey, we're only building 160 square meters of living space," but then there's a triple-
[00:05:17] Hamish: 60 square meters of garage.
[00:05:18] Matt: Yeah, and then
[00:05:19] Hamish: it- And there's
[00:05:19] Matt: a
[00:05:19] Hamish: 40,000 meter
[00:05:20] Matt: alfresco. Yeah. And there's- The hard thing
[00:05:22] Brad: is though, like a garage to me is three walls and a roller door, you know?
[00:05:27] Matt: Now
[00:05:28] Brad: it's becoming- And an alfresco is- A few posts ... two posts and a roof. But to some people, an alfresco's got a fancy concrete bench top and stone cladding and- Yeah ... an outdoor fireplace.
[00:05:39] Hamish: That's a good point.
[00:05:40] Matt: And- And a til- tilted garage door that's concealed with all the cladding that's automated when you drive in the gate that...
[00:05:45] Yeah. That's a good
[00:05:46] Hamish: point. Yeah.
[00:05:46] Brad: And it's, it's still a garage, it's still an alfresco, but it probably costs more than your bathroom.
[00:05:50] Hamish: Mm, that's a good point. So a cl- Yeah ... a cl- an enclosed garage with a concrete slab, we're now kind of including that in our square meter rate. Uh, [00:06:00] an open carport, that's when I think you can start, you know, taking-
[00:06:04] Matt: Creative.
[00:06:04] Yeah, but I also had a, um... I probably might butcher this, but I had someone come to me recently who's an architect And they called me, wasn't for my job, and what they'd said is like, "Oh, we just wanna understand the process a little bit more." Not from our end. They've got a problem where the... They had a budget of, I think, 1.6, and they're like, and they're a bit frustrated the builder's price came in at about 2.4 for their first pricing.
[00:06:29] I was like, "Why are you frustrated?" And they're like, "Well, because it's over the budget." I was like, "No, no, you've designed over the budget. That's not... Why is it that the builder's fault that they've priced as per your plans and it's more expensive? If, if in the case that you wanted it to come in at 1.6, why'd you bother getting the builder to price it?
[00:06:45] 'Cause you already knew it was gonna be 1.6, and it's now more." And he, they couldn't wrap their head around, "Well, w- we've only got 1.6." I'm like, "Yeah, but you obviously don't, like-"
[00:06:54] Hamish: Yeah, and this, and this probably brings to, I guess, a s- And
[00:06:57] Matt: not to have a crack at that architect either. No, no, no, no. Like, they actually were trying to do the [00:07:00] right thing and- Yeah
[00:07:01] and understand the process, and at the end of they actually really agreed.
[00:07:03] Hamish: Yeah. And I guess this is probably under- like, you know, if there are people out there listening to what our process is, I know your- yours is like this, Matt, and I know, Brad, you're sort of heading down this path. Getting a budget estimate, a feasibility estimate before the clients have fallen in love with all the trimmings and really landed on what the window suites- Yeah
[00:07:23] are gonna be and what the tiles are gonna be, like, trying to work out whether or not that current design matches their budget. Yeah. We charge 1,200 bucks for that, and we think it... Well, we know it's pretty accurate- Yeah ... to do that really early on in the piece before you get engineering involved, before you start doing interiors, before you spend a bucket load of money with, um, the architect.
[00:07:44] Like, I, I think if, as a homeowner, if you're not doing that at those early stages, then you're-
[00:07:49] Matt: Well, so this is the part client... As if you're a client, you've picked your builder, you've set on your builder. Yeah. You've got your concept plan.
[00:07:54] Hamish: Yep, yep.
[00:07:55] Matt: And both me and you, and I've stolen a lot of this off you for my pre-con, [00:08:00] is we both send it off to two independent estimators.
[00:08:02] Hamish: Yep. Yeah. Well, I send it off to one now. Yeah. And we do one internally.
[00:08:05] Matt: Yeah. So I send off to two independent. So, so same, we're getting two numbers, yeah? Yep. I then run that against some other metrics as well. We're getting two
[00:08:10] Hamish: ranges.
[00:08:11] Matt: Yeah. So you- Two ranges ... and then I, and then you, and then that- those ranges aren't what it costs us to build.
[00:08:17] That's what the industry- Yep ... is telling you what it's gonna cost to build. So you should be able to take that to Matt, Hamish, Brad. They should all be able to build it within that range. Yeah. Now, that also is dependent on what you spend. That high number is an infinite number because, yeah, if you wanna go add concrete bench tops everywhere and, um, marble ceilings, yeah, it's gonna keep going more.
[00:08:35] It's becomes monopoly at some po- mon- mon- monopoly money at some point. But ideally, the, the goal of that, that phase of that project is can you afford your design, yes or no? Yep. At that point, if it's yes, are the bank... If you're going to the bank, are the bank also gonna lend you that money? Because if they're not gonna lend you that money, what is the point in going forward?
[00:08:53] Hamish: And what I would- Well,
[00:08:54] Matt: you can't fund it ...
[00:08:54] Hamish: and what I, my advice to give to clients is, like, don't look at that lower number. Yeah [00:09:00] Be very comfortable with that high number as well, but also know that it could go higher than that if you don't keep a lid on the fixtures and finishes
[00:09:06] Matt: and all that kind of stuff.
[00:09:06] Yeah It's a bell curve, yeah. So chances of it being the high number and the low number, yeah, it's probably s- more s- slightly shifted towards the higher number as a, as a bell curve. But you, you kind of know that there's going to be that sweet spot somewhere in the middle that you're most likely going to, going to hit.
[00:09:19] Hamish: Hey, Matty, I've been talking to a few people recently, and they're like, "You know what? You've been building with Pro- Proclima for years. Like, how do we get to where you are?"
[00:09:28] Matt: So we all started at level zero at one point, and we got there. But one of the things that Proclima have on their website is they have a library of so many details from wall to roof to subfloor to window assemblies, for multiple different windows, on how to use their product and install it correctly, and is one of the, the best resources you can find online to learn how to do this.
[00:09:48] And if you're an architect and you're not sure how to draw something, they've probably got the answer already.
[00:09:51] Hamish: And I think about, you know, 2018, 2019 when we f- we, we first started getting into this, we had to trawl through all kinds of different documents. We [00:10:00] had
[00:10:00] Matt: to make it up.
[00:10:00] Hamish: We, well, we had to make it up.
[00:10:02] It's all there for
[00:10:03] Matt: you. Yeah, the answers are free now, and social media's great. There's so many awesome videos and content out there. But the ultimate source of truth is the Proclima website. They have every single detail that you can imagine. And you know what? If they don't have it, you can email them, and they'll help you solve it.
[00:10:17] Hamish: Damn right.
[00:10:17] Matt: So use Proclima, proclima.com.au if you need to reach out to them
[00:10:24] Hamish: The feasibility for us is more saying, "You can build a house of this size in this range." Yeah. That's really what it's saying.
[00:10:31] Matt: But, with, but, but, but also a lot of the plans we get have some detail and we can understand, like we ask a ton of questions like- Yeah ... what type of cladding are you having? Which sort of should be on the plans, but what, is there any internal ceilings or timber ceilings, or what type of joinery are we looking at?
[00:10:45] Um, we're, we're never clicking a button on these things that have the low end of fittings and fixtures. Yeah. We're always going up high because the low end is your $20 Bunnings tap. Your high is probably the standard tap that we'd have on all of our projects. Yeah. Um- I
[00:10:58] Hamish: mean, there's a l- there's a level of finish that we're [00:11:00] delivering just generally in our projects
[00:11:01] Matt: anyway.
[00:11:01] Yeah, but it's also just the, the client, that's what they want. Like they say, "Oh, we want budget," but they don't want budget, budget, budget that's gonna fall off their
[00:11:08] Brad: house. No. I think there's a huge breakdown a- across the industry between what's entry level, what's mid-level, what's high end, what's luxury- Yeah
[00:11:18] what's ultra high end, you know?
[00:11:20] Matt: Yeah.
[00:11:22] Brad: It's, that's the hardest thing.
[00:11:23] Matt: High, I would say high end is what budget is. The average budget is what people would think high end is.
[00:11:31] Hamish: So ex- explain that to me
[00:11:33] Matt: again- So, so, so- ... and unpack that for me ... what, so people would say bu- like what budget is to them, the average person, whose budget means like cheap, like, but what I would say is if you were to shift on a scale, budget to them is actually what we would consider as h- like what they would consider as high end.
[00:11:47] Yeah. Our budget is high end.
[00:11:49] Brad: Absolutely agree. I had clients walk through my parents' house, which we built for as cheap as we possibly could. Yeah. Everything in that house is the cheapest [00:12:00] option for, for what we did, and just in the way it's executed, people are like, "Oh, this is really high end." Yeah. It's absolutely not.
[00:12:07] It's- Well, that's really g- ... pre-hung and latched hollow core doors
[00:12:10] Hamish: That's a
[00:12:10] Brad: really good example though ... it is as budget as budget gets.
[00:12:12] Hamish: That's a really good example of still being able to deliver a well-built home for a cost-effective number, and I guess that's a testament to you though because you can make shit things look pretty.
[00:12:26] Matt: Yeah.
[00:12:26] Hamish: Not everyone can do that though
[00:12:30] Matt: Probably not.
[00:12:31] Hamish: Yeah,
[00:12:32] Matt: that's what I'm saying. But, but I think probably if you're, if you're a... I think there's probably... We've got to look at this from three aspects, so I'm gonna kinda write this down. So you're a client, this process is gonna look different to if you're the builder, and it's also gonna look different to you if you're an architect.
[00:12:43] Brad: If you're a client, too, and you've put pen to paper before you understand what things actually cost, you're probably too far down the road.
[00:12:50] Hamish: You, you know, that's a really good point, actually.
[00:12:52] Brad: You know what I mean? Mm. Like, if you're perusing through Instagram and Sanctum Homes pops up and you think, "Fuck, that Kangaroo Ground job that Hamish [00:13:00] did looks sexy.
[00:13:01] I wouldn't mind that," it's probably worth a phone call. "Hey, Hamish, roughly what was that house worth?"
[00:13:06] Hamish: Yep.
[00:13:06] Brad: And straightaway before you've invested any time, any money, other than, you know, sliding in someone's DMs, you've got a rough idea whether you can actually afford that or not- Yeah, it's a really good idea
[00:13:16] before you've wasted all the time. And it's like, how many times do we see... I've had a project where they demolish the existing house and then realise they were millions of dollars over their budget.
[00:13:26] Matt: Oh. I've had that too. We had a project as well where they demolished the house. Um, we come in at- I think
[00:13:31] Brad: it was the same one-
[00:13:32] Matt: Yes
[00:13:32] 'cause
[00:13:32] Brad: it, it went across everyone's desk.
[00:13:34] Matt: Yeah, 3.4 mil I came in at. I know two other builders I know- Ham, where
[00:13:38] Brad: was
[00:13:38] Matt: it? Uh, yeah, yeah, it's the same one. Yeah. Yeah, the Essendon East. Yeah, yeah, yeah, yeah, Essendon. Ascot
[00:13:43] Brad: Vale.
[00:13:43] Matt: Yeah, yeah, Essendon. So what had happened is I'd come in at 3.3 or something. I was like, you kind of have to shop around.
[00:13:49] All the builders, a- the actual it was the cheapest, by the way, uh, at, at that point, and they'd already knocked the house down.
[00:13:55] Brad: Yeah, and their budget was two.
[00:13:56] Matt: And the architect was like, "Oh, I could get my normal builders. [00:14:00] It's 'cause it's a passive house."
[00:14:01] Hamish: Great. Get
[00:14:02] Matt: your normal builders involved. That's exactly what I said.
[00:14:02] Yeah. He goes, "Oh, they're not interested in this one." I was like, "Oh."
[00:14:05] Hamish: Great, because it's not a $2 million job.
[00:14:06] Matt: Yeah, yeah, exactly. Funnily enough- Yeah ... I've driven past. It's getting built. I love... And I've seen that this person is on social media complaining about a lot of the things that are being done in the house.
[00:14:15] 'Cause, yeah, they've... To get to that price, you take things out and cut corners. Ham, I'm about to go on a journey with systems, and I'm working with James from BizTech Guru, who he was a guest on our podcast.
[00:14:25] Hamish: He was, and I've actually done a lot of work with James in the past, and it has transformed my business from just being this classic clusterfuck of a building company to a systems-orientated focused business.
[00:14:38] Matt: And what he's, from understanding it, all focused on builders. And- Yep ... we're going to be doing a live webinar with him coming up- Yep ... as part of this, and it's gonna be a big introduction to systems and how it can improve your business.
[00:14:49] Hamish: And you know the beauty about it? It is gonna be absolutely free. Yeah.
[00:14:53] So keep an eye out for the dates. Uh, this is gonna be a really incredibly valuable workshop to not miss out on.
[00:14:59] Matt: Yeah, [00:15:00] so either shoot us a DM, um, check the show notes, but we'll put a link below here to show you how to sign up. So- Cheers ... make sure you sign up
[00:15:10] Hamish: Brad, I actually think that's the best advice that anyone could give. Like, before you start doing anything, like you, we have like an information overload right now. There is no reason why someone can't just get on the phone and start asking questions.
[00:15:24] Matt: Yeah.
[00:15:25] Hamish: And, you know, even b- and be- get educated. Like Amelia Lee- Oh
[00:15:28] big shout out to what she's doing. Like what she's doing to, for homeowners around the country is absolutely incredible.
[00:15:34] Matt: I think everyone looking to build should actually do that for the f- S-
[00:15:38] Hamish: my best clients-
[00:15:40] Matt: Yep ...
[00:15:40] Hamish: some of my best clients have been, uh- Best questions ...
[00:15:43] Matt: ha- yeah
[00:15:44] Hamish: Yeah ... have, have gone through Amelia's home method.
[00:15:46] And in fact, uh, Hamish and Tinuke, who you met, uh- This is the
[00:15:49] Matt: last time she's gonna shout out before she got to sponsor the podcast. Yeah,
[00:15:51] Hamish: okay, sorry Amelia.
[00:15:52] Matt: But, but... Yeah,
[00:15:54] Hamish: that's all, that's all it... So-
[00:15:55] Matt: No, but it's actually makes our life easy, 'cause she educates them.
[00:15:58] Hamish: Yeah, yeah, yeah. Yeah. An educated client for us [00:16:00] is great.
[00:16:00] Yeah. Because then they're not getting bill shock.
[00:16:03] Matt: Yeah. Yep. And she's got a process, and it's, it's worked.
[00:16:05] Hamish: And
[00:16:06] Matt: it- It's tested h- maybe thousands of times.
[00:16:08] Hamish: And what you're saying, Brad, actually takes a little bit of the pressure off the architects and designers because the clients have a realistic idea of what things are actually gonna cost.
[00:16:17] Matt: Yeah.
[00:16:18] Hamish: Gone are the days where you can build a home for 5,000 a square meter. Yeah. And, and- Like it just doesn't happen ...
[00:16:22] Brad: when you're asking these questions, ask what's included
[00:16:25] Matt: in that. Or ma- no, what's excluded is even more important. Like find out what- If- ... what is not gonna be included ... for sure. Because like- Because
[00:16:31] Brad: a lot of the pricing information you see can exclude fucking shitloads of stuff.
[00:16:37] Yeah.
[00:16:37] Matt: So I'm gonna, I'll be h- so we, we've looked at this whole preconstruction method, uh, prefabrication, preconstruction, um, like predesigned homes. All right? Yep. Yeah, yeah. We've done a fair with Alter Eco. Now when you're trying to put a number against it, that's really hard. So I can say, "Hey, this is gonna be $900,000," but let's assume it's on a, an A class site because we don't know what the soil is.
[00:16:58] Yeah. Let's also assume that [00:17:00] it's got beautiful drainage. Let's also assume that, uh, there's nothing around it, the access is great. Let's also assume that our foundations aren't deep. Um- There's
[00:17:09] Brad: no power upgrade.
[00:17:10] Matt: Yeah, no power upgrade. It's already got three phase with a pit there. Uh, the sewer's only, I don't know, I don't know, a meter deep, so quick, quick connect in.
[00:17:16] It's already been upgraded. The thing is by the time you add on all those extras, there's 150 grand gone instantly. Mm. So yeah, there's a lot of, these, those exclusions are quite, um- They, they, they add up very, very quickly They can add up, they can add up, yeah, yeah And, and there's a me- there's a reason why, uh, you look to the volume build industry, they have their set price because they know all these extras that come on, and it's just getting you through the door to have the conversation
[00:17:38] Brad: Yeah Okay But even a lot of their pricing excludes- Yeah
[00:17:40] you know, site fees or site costs or- Yeah ... you know, whatever else. And it's like, yeah, I've had a project that I did, um, where the client supplied a hell of a lot of stuff, e- expensive stuff, windows, you know- Yeah ... every finishing fixture, like hundreds of thousands of dollars of things, but then told people the build cost was what my [00:18:00] contract price was, which is so fucking far from reality.
[00:18:04] Hamish: Yeah, okay.
[00:18:04] Matt: That's why I was really conscious working with Grand Designs when I said what it costs. I was like, "Yeah, it cost me 980 at my price" Cost, yeah Because that is not what y- I couldn't build it. That's the cost to me.
[00:18:15] Hamish: Yeah, to, to, to you-
[00:18:18] Matt: The, my trades that I've- ... to, to you- ... looked after
[00:18:18] Hamish: me ... with, with people who are giving you comp stuff and all that kind of
[00:18:21] Matt: jazz Even if I built this for you at cost, I still couldn't do it at that price- Yeah, that's what I'm saying
[00:18:24] because my trades are looked after me, and I got a l- I got some free stuff along the way. So I also think that as a client, you gotta come in educated. I do think Amelia's, uh, podcast is, uh, podcast and her home method is a great starting point if you're a client- Yeah ... listening, but also- Under-
[00:18:37] Hamish: Undercover Architect
[00:18:38] Matt: Yeah, but also, um, picking the right architect too is understanding, like for me is ask, if you're a client, ask your architect like, "Hey, how have you gone in the past getting projects to, to site?
[00:18:48] Like from the budget to what they build cost, what are you finding that you're within the range? Can you prove that? Um, how many jobs have you failed to go ahead with because they couldn't meet budget?" Like they're the questions I wanna know if I'm a [00:19:00] client because if you have someone, "Oh, only 50% of our jobs get to site," well, yeah, you've got a problem.
[00:19:05] Yeah. You're, you're a toss of a coin whether yours does or not, but yet you've invested the money.
[00:19:10] Hamish: Yeah. Look, it's no secret that I do a lot of projects with Maxa Design, and I've had so many challenging conversations with Sven over the years about cost. But one thing I think they do really well, and I know Alter Eco are the same, uh, they, they are having conversations with the client saying, "I don't think you have enough money to do that.
[00:19:29] I'm telling you right now." Oh. And, and but then just educating them- Exactly ... along the way. So we've got this project at the moment, which we've just gone through feasibility and now we're going into, um, uh, documentation, which we can then, you know, do a detailed costing on. And I know Sven was saying the narrative with the client is- What, the number you came to us with, this doesn't reflect that.
[00:19:50] Like, this is going to be- You've added
[00:19:51] Matt: more now ...
[00:19:52] Hamish: this is going to be more. So by the time the client got to me, and I agreed with Sven, and then the numbers were [00:20:00] agreeing with what Sven was saying, it wasn't a shock to the client.
[00:20:03] Matt: Mm.
[00:20:03] Hamish: So they're making decisions based on the fact that they know it's gonna be more.
[00:20:07] Matt: Yeah, just because you get that pre-construction number doesn't mean if you add everything in, it's still the same number. If you add the ply ceilings and timber wall paneling- Yeah ... and now we've doubled the flooring cost, and now we've got 100 by 100 Kit Kat tiles instead of 600 by 600.
[00:20:19] Brad: Yeah. Yeah. And I think that's a really challenging part of the conversation, 'cause you incrementally add these little things, but at the end it's a huge number.
[00:20:30] Yeah. Whereas like really you need to be having this conversation where every ridiculous minuscule thing that the client adds, it's like g- give me more.
[00:20:40] Hamish: Y- yeah, and yeah,
[00:20:40] Brad: you- You know, reach into that bucket of funds and-
[00:20:42] Hamish: Yeah ... allocate more in there. You know, you know you're gonna be spending more. Yeah. And I think, and I think as long as, as long as the clients know that, and then as long as everyone's on the same team when it comes to
[00:20:51] Matt: that stuff.
[00:20:51] Communication. We've said it how many times? Oh, well- Communicate it. Don't be afraid to say- Yeah ... "Hey, that's gonna cost more."
[00:20:55] Hamish: Yeah. And also, you know, if you're a designer listening to this, don't just think, "Well, I'll just [00:21:00] hope for the best and hope the price is, you know-"
[00:21:02] Matt: The same ...
[00:21:03] Hamish: like think about- Or come out
[00:21:04] Matt: the wash kind of thing
[00:21:05] Hamish: think, think about the relationship that happens if you're just saying, a- and even as a builder, if you're s- as a builder saying, "Oh yeah, we could probably do it for that," knowing deep down inside it's gonna be more. Like, tell them straight up because y-
[00:21:18] Matt: You're gonna get caught out at some
[00:21:19] Hamish: point ... 'cause what's gonna happen, and I was saying this to a fellow this morning I was having a chat with, it's always harder to hear it for the first time.
[00:21:27] So if you're a builder telling a client that it's 1.5 million and I've got a million bucks to spend, it is a lot easier for them to hear it the second time on another builder-
[00:21:35] Matt: Mm ...
[00:21:36] Hamish: when they're telling you it's gonna be 1.5, because they don't have all the context before that. They're probably gonna end up going with that other builder, and I've got examples of my business where I've done that, and I've come in as the other builder that's told them.
[00:21:48] Yeah. And I've built the house.
[00:21:50] Matt: Yeah.
[00:21:50] Hamish: So just be honest with people, even if there's a risk of the project that's gonna fall over. Uh,
[00:21:54] Matt: yeah. But I think, yeah, so we'll touch the builder. We can't touch on the builder issues. Let's put ourselves in [00:22:00] the architect and building designer.
[00:22:02] Hamish: I'm sure they'd love for us to-
[00:22:04] Matt: No, but like-
[00:22:04] Hamish: to come in on their behalf ...
[00:22:05] Matt: yeah, I, no, I, I think the hardest thing for me is where I get really, not upset, I just don't think architects and building designers should be telling the client what it's gonna cost. They can, they can, they c- they've got to extract the budget and they've got to be like, "Yes, you can afford it," or, "No, you can't afford that."
[00:22:20] But you can't be saying, "I think this is 1.6 mil." You shouldn't be saying that because what happens, like based on what? Because one, oh, w- what projects we've built in the past. Oh yeah, this one was built for 1.6. Okay, that was two years on, let's add 10% because inflation. Also, the question I would ask is, was the build profitable for the builder?
[00:22:39] Yeah. Did they make money on it? Are they still around? Like- Yeah ... so- You
[00:22:42] Hamish: know, I think just a shout-out to Ben Callary, who I know- He's awesome at this ... who I know you do this. And, and, um, he shows the clients a range of projects of similar finish, of similar size- Yeah ... and then says, "This is the contract price.
[00:22:57] However, that was three years ago, that was two [00:23:00] years ago, and I haven't talked to the builder since- Yeah ... to, to find out where it was." So here's a guide, here's an idea, but there's, it's not, there's no committing to, well, the architect saying it's gonna be this.
[00:23:12] Matt: Yeah.
[00:23:12] Hamish: It's with all these caveats and all these like, well, you need to double-check with the builder to actually make sure that it's gonna be that price.
[00:23:19] Matt: But also, like this, they could be looking at, as the site conditions as we just said, like one could be in Sandringham on beautiful sandy soil, and then the other one's in Williamstown where we're hitting rock and the water table.
[00:23:29] Hamish: Mm.
[00:23:29] Matt: So like, there, there could be 100 grand difference just in the slab itself.
[00:23:33] It's-
[00:23:33] Hamish: Or
[00:23:33] Matt: you're out at Bubbs
[00:23:33] Hamish: ch-
[00:23:35] Matt: Yeah ... chooch- chilling away- Yeah, exactly ... at the rocky ... like pro- project location, like there's so many factors. I, I started writing them down. I think I got up to 50 things once that was like, what will change the project
[00:23:45] Brad: cost? I just gave up. But, like I've had this conversation, um, I, I can't really say clients 'cause I'm, I've back to back to back to houses for architects where it's the architect's house, but like around cost.
[00:23:59] Yeah. [00:24:00] And I'm like, "Point to something in the house and I'll tell you exactly how I can skew the cost of that massively." You know? And not even with, not even with just- Oh, let's
[00:24:09] Matt: do a plaster ... "
[00:24:10] Brad: Oh hey, here's the tiles I've picked. They're $45 a square meter." "Cool. Are we using Davco, Keracol glue? What grout?"
[00:24:16] Matt: Are they natural tiles?
[00:24:17] Are
[00:24:17] Brad: they silicon sealed? What silicon are we using? Yeah. What's the process here? Do I have to clean them, seal them? What am I using for that? Am I going to Bunnings and buying the cheapest shit off the shelf or am I finding the best product? And I could skew that exact tile that they look at and goes 45 bucks a square meter, I could skew the price of that by hundreds of dollars a square meter on that one item.
[00:24:34] Yeah. And I can do it on literally everything you can point to
[00:24:38] Hamish: And you're, so-
[00:24:39] Brad: It's a good point ...
[00:24:40] Hamish: so, so you're saying that in a way to demonstrate that even though something's one, a, a number on a bit of paper here, that could change depending on how it's installed or how, you know, what other things kind of surround it.
[00:24:52] Matt: Yeah, absolutely. Yeah. Well, just, yeah. Yeah. A 600 by 600 tile on a wall- Yeah ... put on a floor, it's wonderful heating tile and there's an extra cost. Yeah.
[00:24:58] Hamish: And that's probably- You mitering
[00:24:59] Matt: it? Yeah,
[00:24:59] Hamish: yeah. [00:25:00] And, and that's probably a really good, um, point about how you can execute lower value items and still make them look really high-end, because that's who you are.
[00:25:10] Matt: Yeah.
[00:25:10] Hamish: Whereas someone could take a $45 a square meter tile and install it as a $45 a square meter tile.
[00:25:16] Matt: Yeah, you could spot fix it, slap it on the wall, happy days. And, and- Cheap as shit ...
[00:25:19] Hamish: yeah, happy days,
[00:25:19] Matt: yeah. Yeah, drummy as hell and- Yeah ... probably pop up in a few years. Yeah. But that's what you paid for.
[00:25:23] Hamish: I've got a question for you, Brad.
[00:25:24] So you've obviously gone through, you know, a, a couple of years of, let's say, personal growth.
[00:25:30] Matt: Mm-hmm.
[00:25:31] Hamish: And, uh, there's probably things that you've learned over the last couple of years that you're not gonna do moving forward. If someone came to you now with a set of plans and they had a, a number and they had, uh, a set of drawings and you're like, "Well, hang on a minute, this doesn't quite add up," what's, what are the kind of conversations you're having with clients now?
[00:25:51] Brad: Oh
[00:25:54] No idea. I haven't had... I, I've, I've actually had a couple of conversations, um, [00:26:00] around like, you know, more with designers around like what my process would be, and obviously I don't have the historical data that, you know, a bigger builder has that's done more projects. Um, the stuff that I'm doing's fairly bespoke, as crap as that word is.
[00:26:16] Um, you know, so like, yeah.
[00:26:19] Matt: Isn't everything bespoke these days?
[00:26:20] Brad: Yeah. Bespoke carpentry. My stuff, my stuff's actually bespoke. I know. Um, but yeah, how do I- Wank-
[00:26:26] Matt: wanky handles?
[00:26:27] Brad: Yeah, wanky handles. But yeah, how, how do I have that conversation? Oh, the job with the wanky handles, I was like, the client gave the designer her budget, and I said to the designer, I haven't worked with a designer ever before, I was like, "Send me a project that you did recently, and I'll have my joiner price it, and I'll have my tiler price it, and then y- you figure it out from there."
[00:26:53] And the client's budget for joinery was 45 grand, and the joinery was 45 grand.
[00:26:58] Hamish: Wow.
[00:26:58] Brad: And I was like, "This [00:27:00] is fucking perfect." Jesus. Because before Jarna the designer drew a damn thing, I was like, "Here's a project that you did. Here's where my joiner came in," and she sort of roughly worked,
[00:27:12] Matt: worked
[00:27:12] Brad: it
[00:27:13] Matt: out- Yeah
[00:27:13] off the bat. That's a great way of doing it. Yeah, it's a really good way of doing it. I don't want to make my traders do extra quoting work, but, it, yeah, if you're wanting to know, like, "Oh, what can we do in this job?" Like, let's look at a past project that you want to copy. Um,
[00:27:24] Hamish: yeah. Yeah, I mean, I feel, I feel like, yeah, it's a probably an interesting point you, you say, like, now as we're going through feasibility, because we're using a, a different approach now, you know, shout out to Carl, we're using Wonder mater, and the data that that's spitting out, I, I'm not hanging my hat on it, 'cause I'm literally going through every single line item and then massaging it to my business.
[00:27:43] So I, you know, some- there's been some joinery items in there or some, um, electrical items in there where I know from past projects that number's not enough.
[00:27:51] Matt: You've al- yeah, you've got to know your numbers- Yeah ... and what things cost, and you can't just get these quotes from these people and go, "There you go."
[00:27:57] Oh, present to the client. You've actually still got to review it.
[00:27:59] Hamish: No, [00:28:00] you've got to re- Like, I've been, I've spent, I've spent, um, I'm presenting a cost tomorrow, and I've probably spent two days going through the data and the outputs of Wonder mater and making sure, referring to the plans, and making sure that I'm like, "Yeah, I reckon this is right."
[00:28:14] And again, this is just feasibility.
[00:28:16] Matt: It's, is your... This is, I get, this is where I get really upset with people is feasibility is, is your project viable? That's all it is. Yes or no? That's all it is. It is not a build cost.
[00:28:24] Hamish: That's, and that's all it
[00:28:25] Matt: is. That is it. C- can you afford, at the moment, for what you want here, barring, we haven't got preliminary engineering- Yeah
[00:28:31] we haven't got any reports, we haven't got PHPP and soil testing, interior design. Can you afford what you think you want a- as it stands right now? Yes, no. It's just, that's it. There's two options on the ar- S-
[00:28:41] Hamish: so it's interesting. I've got these nice fluffy nonsense documents that I present to clients, right?
[00:28:47] Which I think have value. But at feasibility, the only thing that actually matters is the first page- Yeah ... which says, "This is how much I think that design's gonna cost." Yeah. Everything after that [00:29:00] is kind of irrelevant, 'cause the plans are so, like, at preliminary stages.
[00:29:04] Matt: Yeah.
[00:29:05] Hamish: I include all the other stuff in there because I, I do like to demonstrate how the price gets built up.
[00:29:11] But really, the only thing that actually matters is the range.
[00:29:15] Matt: Yeah.
[00:29:15] Hamish: Does this range here fit with how much money you want to spend?
[00:29:19] Matt: And, and if it's out-
[00:29:19] Hamish: And it al- also should just be in a conversation there.
[00:29:22] Matt: Yeah. Yeah, like, and, and, and back to where we have ended conversations, not, "Oh, what can we do to get down?"
[00:29:28] Like, hold on. Can you afford the range? No. Yeah. What do we need to get it? What are the goalposts? Yeah, yeah, yeah. Oh, we're at one point, we're at 1.6, we need to get to 800. We're not getting there. We're not getting there. We're just not getting there. I don't- If it's
[00:29:37] Hamish: 1.6 and say we want to spend 1.4, you're like, "Happy days, let's crack on."
[00:29:41] Yeah,
[00:29:41] Matt: yeah, cool. Let's, yeah. Yeah, like-
[00:29:42] Brad: Well, again, it depends how it's designed. Are there crazy things in there that you can cut or substitute- Yeah ... that constitute big-ticket items? Then probably you can shave that- Yeah ... amount out. But if it's already a bare bones- I- totally ... sort of thing- Yeah ... you're just not getting there.
[00:29:59] Yeah,
[00:29:59] Matt: totally. Yeah, and I think [00:30:00] you've got to be really honest with you. And, and, and as we talk about this feasibility stage, at that point there, you've maybe spent, I don't know what it costs us with an architect or anything, but you maybe spent 10 grand getting some design done, roughly. Hypothetically, you spent two grand with a builder around that, maybe.
[00:30:13] Yeah. Probably 1,200, two grand, yeah. Yeah, yeah, you're less than that. Okay, so you spent 12 grand to understand is your project feasible. Do you get an answer yes or no? The alternative is you run all the way through to the end, and you find out, like one of my previous clients, that you had a, had a budget with 1 point, 1.4, um, and it comes in a lot higher, and it's just...
[00:30:35] Or the project we talked about before, which is you can't afford it, period. And you've just spent hundreds of thousands of dollars to get it there. And now you've got- And now you're
[00:30:43] Brad: homeless because you knocked your house down.
[00:30:44] Matt: Yeah. Like, that, that's, I think that's the other thing. I, I also, I, I am not a big fan of quantity surveyors, personally.
[00:30:51] Um, I don't... They don't know how our business operates. They don't know our, our overheads. They don't know our markup. They [00:31:00] are looking at things that we might not look at, especially in our space of high performance. So they're just not gonna know the details. So what I've learnt and my understanding is a quantity surveyor is there to justify the architect's fee because most architects will try charge as a percentage, and rightly so, they've got to kind of validate their, their fee.
[00:31:18] Um, but it's not the number we should be holding our hat on to build. It can be part of the data set.
[00:31:23] Hamish: How much do you think it costs to get a quantity surveyor in?
[00:31:26] Matt: Oh, I got no idea.
[00:31:26] Hamish: Three grand? Three and a half grand?
[00:31:28] Matt: Mm. I actually have no idea.
[00:31:29] Hamish: Let's call it three grand. If you're gonna invest that money in an, a, a quantity surveyor to get for three grand- Why not go to two builders and charge, and get charged 12 or $1,500?
[00:31:40] Yeah. And get real world-
[00:31:42] Matt: Yeah ...
[00:31:43] Hamish: insight into what the project
[00:31:45] Matt: is gonna cost. Because, because I bet you when they give you that number and you say, "Okay, will you sign off on this number that someone can build for it?" The answer is no. Yeah. I'd be guaranteeing on those numbers I can build for you, I can build you within that range.
[00:31:56] Hamish: For the quantities fired
[00:31:57] Matt: there's no- No, no, if we build within our, our- Yeah ... system, we'll get you [00:32:00] within that range. Yeah. I've got one right now, I think our range is 1.5 to 1.65. We come off on both of them. We come in at 1.565, and we've got it down to 1.5, so we're bang in the range.
[00:32:12] Hamish: Yep.
[00:32:12] Matt: Yep, they just wanna get it down to that lower number, which is awesome, but we- we're within the range.
[00:32:17] Um, and I think that is how this process needs to, to play out. Uh, I also think people overcomplicate it too.
[00:32:24] Hamish: Yep.
[00:32:24] Matt: It should be a two to three-week process. It doesn't take us long to get these numbers back now. Um, sitting there trying to work it out yourself, you can be subjective and, you know, objective, sorry, and try fudge the numbers to make it look beautiful, but again, it's only gonna hurt you in the future.
[00:32:39] Yeah,
[00:32:40] Hamish: honesty. Honesty is the- Yeah ... honesty is the biggest thing. Um,
[00:32:42] Matt: mindful moment
[00:32:46] Sponsored by MEGT, Australia's largest, uh, apprenticeship expert. So I think, I think it's probably my, my advice for young kids finishing their apprenticeship is this process is an art. [00:33:00] It's something that you learn over time by tons of mistakes. Yeah. The process I have now is not because it was working and humming from day one.
[00:33:08] It has been fuck up after fuck up after fuck up to get here. But, uh, I, I think the one thing that I've kind of learned is, like, it goes back to honesty. You've just got to be honest with the people straight up front of what something's gonna cost. If you... There's no point wasting everyone's time if you think it's gonna cost $1,000 to do this, put some boards down a deck, the client's only got a $250 budget.
[00:33:30] Hamish: Yeah.
[00:33:30] Matt: Why bother have that conversation? Just be like, "Hey, this is just not gonna be there."
[00:33:33] Hamish: You- you're, you're better off putting your energy into a project that's gonna go ahead rather than a project that you hope is gonna go ahead.
[00:33:39] Matt: And you know what? Sometimes they might go, "Yeah, okay, cool, yeah, that probably makes more sense."
[00:33:44] And then you're like, "Cool, we're on the same page." Some people might be like, "I've only literally got $250 to spend." Right. That's it. And then you're like, like, that's four hours of, five hours of work. Like, that's before I buy any material, like how is this gonna work? So I think we, I think we need to-
[00:33:57] Hamish: $250, that's n- not [00:34:00] enough, Matt.
[00:34:00] Matt: I, I'm talking for- We're talking for apprentices- ... apprentices or someone that's finished ... hypothetically
[00:34:03] Hamish: speaking.
[00:34:04] Matt: I'm talking for apprentices the whole s- It's two
[00:34:06] Hamish: hours worth of work, people.
[00:34:07] Matt: Yeah.
[00:34:07] Hamish: It's two hours
[00:34:08] Matt: worth of work. Oh, for an apprentice if you're doing a cashie. Okay. So, but the whole segment is for younger kids.
[00:34:13] Okay. Sorry. Fuck me. Um, so yeah, that's, that's just my advice. Um, anything else you guys want to add on about that feasibility number?
[00:34:21] Hamish: No, and I, I, I think the, the, the, the, the final thing that I just want to say about it is it's not a number that you're going to go to contract on. It is a guiding number to make sure you're going in the right direction.
[00:34:33] It's
[00:34:33] Matt: like a range when you go to buy a house from real estate, except our ranges are kind of within the range.
[00:34:38] Brad: And if yous can't have that hard conversation at that point, how the fuck are you going to have a hard conversation when you're under a contract with those people?
[00:34:45] Hamish: Yep. And you, and you've just hit rock, and it's a $30,000 variation.
[00:34:51] Matt: Ding, ding, ding, ding, ding. We're off.
[00:34:52] Hamish: Thank you. [00:35:00] Thanks.