Are you going to be an O/B?

robin0919 yes i will be OB

I doubt very much that a bank will accept something as arbitrary as that type of an estimate. Those sites will generally give a very rough ballpark at best and for every person that states it was accurate there will be a least one that says it was not even close.

Or is it better for me to gather estimates from subcontractors right away, or a GC?

If you are going to be an OB, what would be the point of wasting the time of a GC? That's not remotely ethical if you don't plan to actually use them for your build. It takes many many hours to develop an actual bid quote, rather than an experienced WAG.

You will need hard estimates from your trades to develop your budget, and for that, you will need finalized *buildable* plans. Building is a bit of a chicken or the egg. You will need to be experienced enough in building costs to look at a plan and know the approximate cost to build before you ever get quotes from subs for the cost to build. Otherwise, you'll be chasing your tail and redesigning and then getting re-quotes, which will frustrate your trades.

No, i will be using sub contractors, i meant to get an estimate from GC to provide to the bank. And i will be having a friend helping out on some stuff as he built a few homes already.

A GC will not be bothered giving you bids if you are going to act as an OB. There is the beginning of your conundrum. As others have eloquently put it "you don't know what you don't know. I personally think you will be way over your head.

Your bank will not find it acceptable to have bids from builders that you will not use. You will need detailed bid documents from actual subs that you plan to use. And they will conduct their own appraisal based on the price of surrounding sales vs. the amount that your build costs. They will not automatically lend you the amount you need in order to do construction. It has to be justified by it's surroundings, your down payment, and your ability to produce a finished product. I fear that you very much lack the third quality.

Do you have final building plans to give to subs to get bids? If the answer is no, then you need to start there. As others noted, you will need complete bids or accurate estimates to provide the bank to cover every possible cost of the project from site and grading to the final shingle on the roof. Then have some contingency. You will also need the final plans and specs for the bank for them to develop a pre construction value of the built home to know if your costs are more than its assumed appraised value.

We are acting as OBs. My bank required a bid from a GC, even though we were not using one. So you may need to check with your bank. We had to turn in his bid, as well as each of the bids from subs, for each part of the project. We didn't have him actually bid out each job to get a precise estimate. He was able to look over the plans and question us about finishes to try and come up with a pretty close estimate. We had already been getting all of our own bids from subs, which is a TON of work, so we were able to plug in a lot of the numbers for him. He was very helpful though. We were genuinely interested in a framing bid from him though, and he didn't mind plugging other numbers in for us to decide which route we wanted to go. It wasn't a turnkey bid though. It was a "consultant" bid. Basically we would pay all the subs, but he would have coordinated everything (using his subs or our own if we had wanted) and we would have paid him x amount for dealing with the headaches. We ultimately decided to go on our own. Your bank may not require that though so I wouldn't even mess with it unless you end up needing it.

Getting the bids has been extremely time-consuming, but it hasn't been bad. My advice would be to get organized and create some spreadsheets. I was able to get many of our bids via e-mail, so having a pdf of our completed plans has proven to be invaluable.

We used a smaller bank and we had to provide the bank with a cost breakdown and the only way to do it is to get it from who will do the work. You need to line up your subs and get bids in writing to submit to your bank. Be prepared for lots of paperwork no matter which direction you go. Our bank charged a bit more closing, interest and used more paperwork for OB than if you used a GC. We ended up hiring someone but I would imagine you can get through the loan process with good information from your subs. We didn't find any GC's who would price things that they weren't actually working on but we did talk to a designer who could sort of work as a project manager and he provided that service.

These are some great tips, thanks guys. Yes i do have a plan on hand already and aware and ready for spending a lot of time getting bids from subs, And that is exactly what we will be using a small local bank they need a break down of the estimate. Already set up a spread sheet for sub bids in order so should go smooth.

Our bank's forms were very easy to use, there just were a lot of them :)

One more thing to keep in mind, you don't necessarily have to turn in the bid for the person you think will do the work. If you get three bids for example, I would give the bank the highest one because at the time you need the sub you would like to select they may or may not be available. Turning in the higher numbers will give you a little wiggle room if you need to work with someone else when the time comes.

"Turning in the higher numbers will give you a little wiggle room if you need to work with someone else when the time comes."

Um, no. The bank will only loan what the bank will loan. It doesn't matter what any individual sub might charge you for their portion of the project. If you turn in the highest bid from everything that you received, and the total is 500K, the bank won't automatically loan you 400K to build. They'll (possibly) loan you the 80% of the 400K that their appraiser says that the home would be worth when it's done. That extra 80K has to come from somewhere. And you still need a contingency fund as well, because there WILL be unexpecteds during the build.

We had a full set of plans and a very detailed spreadsheet. Loan person was happy my SO has familiarity with construction and a former GC had arranged a good portion of the subs. (Each of those were a separate bid, so no idea what he tacked on for his trouble, but it was within budget) Part of the cash we use/d is for "unexpected costs" and yeah, those happen. (already has)