One Million Dollars - PPP Mock Exam - Architect Registration Exam | ARE Live

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All right, moving on. This one's going to make various people angry.

So, I apologize for those who did this. I specifically made this a ridiculous question because I just wanted to get to a spot where we could talk about what people mean when they talk about pricing. Your client jubilantly tells you they have $1 million to spend on this exciting new construction project. What number should you hear? What am I getting at here? What I'm getting at is, and this is something that's specifically an issue especially for young designers who are really excited to get their first big project, you should absolutely not hear the word "one million."

That construction cost is going to be way, way less than that. Typical numbers on these things is roughly two-thirds to one-third. And I'll go through some different ranges as well. But where I might have, say, two-thirds might go to the hard costs, and hard costs would be construction, for example, and one-third would go to the soft costs. The soft cost might be bridge loans, lawyers, getting the zoning changed in order to get the process to move forward, I have all these lawyers involved.

It might include land acquisition. If the land is very expensive, it's going to dramatically alter this two-thirds, one-third scenario. So there's a whole series of things that you are likely to have to pay for out of that $1 million. So, in actuality, your number might be, let's say, 667,000, which would be the two-thirds number. But if we had more information, it could even be quite different from that.

Let's say 667,000. So that's our two-thirds number. So what does that include? Well, it depends on what the building is, obviously, and we don't have enough information in here to say anything different from the two-thirds number. But it may well be that that number includes both the hard costs of the shell and core of the building. So the actual construction of the building, that if all hell breaks loose and the whatever it is goes out of business, is still going to stay there.

But then they also have to pay somehow, they have to pay for the F. F. and E., which is going to be the furniture, fixtures, and equipment. So, F. F. and E. has to come out of somewhere, and it would depend on the kind of project, depending on how much that might be. So, F. F. and E. for, say, a commercial kitchen, might be actually quite high.

It might be half of the money, or even more, of the overall project because the equipment is so expensive. The furnishings for...let's say you're doing a lawyer's office in an existing loft building, where you may be moving a few walls around, putting in some glass walls for a conference room, something like that. But there's really probably not that much architecture. It's probably a lot of mechanical and it's probably a lot of furniture. They're going to spend a lot of money making that place look really sharp. And maybe an art budget, something like that.

So, these budgets break out in all sorts of different ways. I'm going to tell everybody here they should pretty much accept any number, as long as it's lower than a $1 million, because you will never have the full amount for your construction, unless they say, "This is for the hard costs. This is for the construction."

Marc: I think that's awesome that you're working for their T-shirts, man. That's good.

Mike: I'm looking out for you guys. I'm trying to get you a T-shirt.

Marc: I will tell you, though, that I think we're down to two people, out of 50, who have everything right so far.

One Million Dollars - PPP Mock Exam - Architect Registration Exam | ARE Live autodesk revit
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