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Carl in Ohio asks:

I\\u2019d love to get your input on 3D printed homes, and wonder if you have considered putting together any projects for that and raising funds for it.

If you have any free time, I\\u2019d love to get your input on it. You\\u2019re one of the few people I\\u2019ve invested with that has a very diverse technical background and can look at a topic to see if it has a potential for exponential growth, or is gonna be a dud.

Have a great day, and thank you for your time.

Carl,

This is a great question.

First let\\u2019s frame what we\\u2019re talking about. This is not the same as the nozzle that puts out a narrow strand of nylon to manufacture small components in a lab environment. We\\u2019re talking about erecting a large truss system that is wider and higher than your house and has a nozzle on a three dimensional track. The nozzle squeezes out a uniform stream of cement according to the computer generated 3 dimensional drawing that is loaded into the system. The nozzle moves at a pretty good speed of about 6 inches per second. Current generations of 3D printers are capable of finishing a 600 square foot structure in about a day if it\\u2019s running continuously. Cement is an excellent building material. It\\u2019s strong and relatively inexpensive. Estimates from one manufacturer are about $8-12 per square foot in cost. One manufacturer claims that the same surface can be used on both interior and exterior. All that is needed is a coat of paint. Raw concrete while workable, is not always an acceptable interior finishing surface. So if you don\\u2019t want drywall, you might save a little more cost.

But to determine whether 3D printing makes sense, let\\u2019s look at the budget for constructing a conventional stick built home or apartment complex.

The actual framing of a building or house accounts at most for 15-20% of the hard construction cost. The average is around 17%. So even if you cut the cost of the material and labor in half, at most you\\u2019re saving 8% of the total construction cost. The developer doesn\\u2019t really care what material is being used for the framing. If wood prices go up, they\\u2019ll switch to steel studs. If steel goes up, they\\u2019ll switch to masonry. You get the idea.

The expensive part of the construction is the plumbing, electrical and HVAC. None of these are candidates for 3D printing. A typical 2,000 square foot home will attract about $12,000 in plumbing costs, $14,000 in HVAC, and another $12,000 in electrical. The interior finishes are most expensive in the kitchen and bathrooms. You\\u2019re looking at about $4,000-5,000 in appliances. Flooring is about $6.00 per square foot installed. Yes, you can go cheaper, but I\\u2019m talking basic builder grade materials for new construction.

When you add it all up, you\\u2019re looking at between $120-$134 per square foot for the hard cost of construction.

The largest variable cost in a project is site related. Maybe the soil isn\\u2019t suitable for supporting a building and needs to be replaced with compacted fill that is structurally stable. Maybe there\\u2019s bedrock that must be broken or blasted. Maybe the city forces you to build underground stormwater detention in cement pipes at $100 per linear foot. These types of site related issues can add millions to the cost of a project with zero added value.

When when you add the land cost, the impact fees, architecture, engineering, insurance, sales tax, the cost of borrowed money you can have a total cost of nearly $200 per SF. In dense urban situations, the cost could be much higher where the cost of the land is equal to or greater than the cost of construction. In that instance, saving $2-5 per square foot for a 3D printed structure is not a game changer. It\\u2019s single digit percentages savings.