Question

Brothers Bill and Ray are planning to build a duplex, as rental property, on Perrin Street. The lot for the duplex sits back from the road with a beautiful view. The plans for the duplex indicate each half will be 1,450 square feet, totaling 2,900 square feet. The average price for a lot and building similar to this one has been $145 per square foot. Fortunately, Bill is an experience painter and feels he can save money by painting the exterior, install the light fixtures and install the finish hardware himself. Ray feels he can install the carpeting, interior trim and take care of the interior decorating. The following average cost information is available from a local bank that makes loans to local contractors and disperses progress payments to contractors when specific tasks are verified as complete. 24 % Excavation and framing complete 8 % Roof and fireplace complete 3 % Wiring roughed in 6 % Plumbing roughed in 5 % Siding on 17 % Windows, insulation, walks, plaster, and garage complete 9 % Furnaces installed 4 % Plumbing fixtures installed 10 % Exterior paint, light fixtures installed, finish hardware installed 6 % Carpet and trim installed 4 % Interior decorating 4 % Floors laid and finished

a. What is the estimated total cost of the duplex if Bill and Ray were use contractors to complete all of the work?

b. Estimate the cost of the duplex if Bill and Ray were to use their skills to do some of the work themselves.

Answer 1

ANSWER:

a.         Estimated total cost for the house is $420,500 (2,900 sq. ft. x $145 per foot).

b.         Estimated savings of Bill's painting work and ray's interior decorating:

Exterior painting and,light fixtures installed,finished hardware installed	10% x $420,500	=	$42,050
carpet and trim installed	6% x $420,500	=	$25,230
Interior decorating	4% x $420,500	=	$16,820
Total saving	=	$84,100

Estimated total cost for the completed house using their talents is $336,400 ($420,500 - $84,100).