Newbie to house build

[sly_karma]

Personally I'm a small contractor. I have three guys. All ticketed. Because of our lack of man power things go pretty slow. But our workmanship is the best I've seen. Bigger companies are usually faster but often have lots of low skill guys or guys that don't care because they're far from the top. I charge a set charge for management. That way the customer doesn't pay for an extra percentage as the project soars over budget. And I like it because it's way less paperwork and the clients like sourcing out some of there own items and feeling involved.

I thought that was the way to go in my early years too. Transparency, fixed mgmt uncouples you from budget and scope changes, etc. Until I realised I was barely covering overheads let alone clearing a profit.

My golden rule now is "don't install anything you didn't supply," and that extends to my trades as well. We provide warranty on those installations, and the margin on supply is needed to provide a pool of funds to use when warranty work is required. There is generally no additional cost to homeowner due to supplier trade discounts, and control of delivery of materials and fixtures remains with me (as much as anyone has control of the wacky supply chain world).

I've learnt the hard way to say a polite but firm No to homeowners wishing to do some of the work themselves or providing a certain trade due to family or friend connections. I control all of it or I'm out. My own trades meet my schedule requests, other may or may not. Their quality is unknown and I end up spending a lot more management time there. Homeowners offering to clean up the site each day is about as far as I'll allow. Back in Australia, the builder fences and locks the site, owners have to request a visit as access to the site legally belongs to the builder until occupancy is granted.

 

[trophywife]

I'm in the trades business and I wouldn't trust anyone to build my house these days! The quality of trades participating in residential new construction is abysmal because the margins are disgustingly low. If you are too dumb to realize there is no money in it, you're probably not good at your job either. All the good and smart trades move on from residential new construction very quickly and you end up with the trash. If I were you I wouldn't be looking for value on a home build, I would pay the highest rate for the best possible guy. My 2 cents.

so the municipal inspectors are not doing there job? coquitlam is sure strict.

 

[Rain City]

I thought that was the way to go in my early years too. Transparency, fixed mgmt uncouples you from budget and scope changes, etc. Until I realised I was barely covering overheads let alone clearing a profit.

My golden rule now is "don't install anything you didn't supply," and that extends to my trades as well. We provide warranty on those installations, and the margin on supply is needed to provide a pool of funds to use when warranty work is required. There is generally no additional cost to homeowner due to supplier trade discounts, and control of delivery of materials and fixtures remains with me (as much as anyone has control of the wacky supply chain world).

I've learnt the hard way to say a polite but firm No to homeowners wishing to do some of the work themselves or providing a certain trade due to family or friend connections. I control all of it or I'm out. My own trades meet my schedule requests, other may or may not. Their quality is unknown and I end up spending a lot more management time there. Homeowners offering to clean up the site each day is about as far as I'll allow. Back in Australia, the builder fences and locks the site, owners have to request a visit as access to the site legally belongs to the builder until occupancy is granted.

Yep, fixing a management fee only works if you're billing for project coordination hourly on top of that. In that case they should just call the fee "profit". I used to do this as an incentive to clients because I started young. I've realized now that it's hard to ask for extra fees after the fact (even when you're deserving of them because of added scope or changes). That scenario put me in a position where I was making 6% or even 4% at the end of the day. And the schedule went from 1 year to two and a half years. Setting a percentage fee just takes away all the ambiguity of it. It's just business and that's how it works.

 

[tightlines]

so the municipal inspectors are not doing there job? coquitlam is sure strict.

I should clarify - the trades are operating on thin margins, as are the GC's in new home construction. The only way to 'win' a lot of the time, is to have extremely cheap labour and inevitably cut some corners. My advice was more along the lines of spend the money on someone with a proven track record and understand who exactly the trades will be on your project. Some of the bigger companies are cycling through trades like changing diapers. A lot of the people doing the work are nothing more than 1st year apprentices. It's your house. You wouldn't believe some of the stuff that goes on, even from 'premium' builders. Like Rain City said, people are being thrust into roles they have no business being in. I've seen a guy go from site cleanup to site super in 12 months and they had him managing x 2 projects at the same time at 1.5 million build costs Suffice to say the homeowners were none to happy with the process! Just be careful it's your money

 

[Howesounder]

I will take advice and talk to a couple. But what I’m hearing is reinforcing my gut. I have a great long term relationship with a top builder who has offered me 10% so I’ll jump through the hoops but pretty sure I know where I’ll land.

 

[Rain City]

I will take advice and talk to a couple. But what I’m hearing is reinforcing my gut. I have a great long term relationship with a top builder who has offered me 10% so I’ll jump through the hoops but pretty sure I know where I’ll land.

Don't forget to ask him those questions about the supervisor though. I've had clients tell me other guys would get all defensive when they started probing them about it. "What exactly am I getting for my 10%?"

 

[Brett83]

Yep, fixing a management fee only works if you're billing for project coordination hourly on top of that. In that case they should just call the fee "profit". I used to do this as an incentive to clients because I started young. I've realized now that it's hard to ask for extra fees after the fact (even when you're deserving of them because of added scope or changes). That scenario put me in a position where I was making 6% or even 4% at the end of the day. And the schedule went from 1 year to two and a half years. Setting a percentage fee just takes away all the ambiguity of it. It's just business and that's how it works.

I've been doing the fixed management for seven years now. I'm definitely not a hand holding contractor. I've adjusted my clients. When I started I did four years in West Vancouver. It was a lot of hand holding rich baby boomers hands. Better percentage but the hand holding made it impossible to get any hours in. Now I target younger clients in the Deep Cove/Lynn Valley area. I'm able to work on the tools 35-40 hours per week. Keeps me fit and makes me more money. I charge a decent fee and just open up the discounts for my clients. Clients like it because it makes them feel like they're contributing. I generally run one site and have my main foreman run an other site, with a bunch of smaller jobs at the same time. It's a good system for now. For every project we form, frame, exterior, hardwood floors, finish carpentry and kitchen installation. So tons of hours with no carpentry subbed out. I make 20 percent of my income off management fees 30 percent off my guys and 50 percent off my hours.
However when I start getting sore and tired over the next few years maybe I'll switch back to the conventional contracting methods.

 

[Rain City]

I've been doing the fixed management for seven years now. I'm definitely not a hand holding contractor. I've adjusted my clients. When I started I did four years in West Vancouver. It was a lot of hand holding rich baby boomers hands. Better percentage but the hand holding made it impossible to get any hours in. Now I target younger clients in the Deep Cove/Lynn Valley area. I'm able to work on the tools 35-40 hours per week. Keeps me fit and makes me more money. I charge a decent fee and just open up the discounts for my clients. Clients like it because it makes them feel like they're contributing. I generally run one site and have my main foreman run an other site, with a bunch of smaller jobs at the same time. It's a good system for now. For every project we form, frame, exterior, hardwood floors, finish carpentry and kitchen installation. So tons of hours with no carpentry subbed out. I make 20 percent of my income off management fees 30 percent off my guys and 50 percent off my hours.
However when I start getting sore and tired over the next few years maybe I'll switch back to the conventional contracting methods.

It's funny you say that. I'm old and tired and I just recently transitioned back into being a full time carpenter on my sites again too lol. I like the exercise and the billable hours are worth far more than the mark-up I make on 5 or 6 guys. It's allowed me to do two jobs instead of six. I feel like I'm going backwards but I'm way happier. I also feel like I'm 20 again watching YouTube videos about tools, just replaced my 40 year old pouch with a fancy new Occidental vest dealy. And the craziest thing of all, I've switched to all 40v cordless Makita tools! Thought I'd bring those extension cords to the grave!

 

[Brett83]

It's funny you say that. I'm old and tired and I just recently transitioned back into being a full time carpenter on my sites again too lol. I like the exercise and the billable hours are worth far more than the mark-up I make on 5 or 6 guys. It's allowed me to do two jobs instead of six. I feel like I'm going backwards but I'm way happier. I also feel like I'm 20 again watching YouTube videos about tools, just replaced my 40 year old pouch with a fancy new Occidental vest dealy. And the craziest thing of all, I've switched to all 40v cordless Makita tools! Thought I'd bring those extension cords to the grave!

I find I can pick and choose the task I like a bit more. And it allows more free time to fish with less sites. And don't get me started on tools. I'm an addict.

 

[Sea Chaser]

I find I can pick and choose the task I like a bit more. And it allows more free time to fish with less sites. And don't get me started on tools. I'm an addict.

Maybe we gotta start a tool **** thread

 

[Bifmalibu]

It's funny you say that. I'm old and tired and I just recently transitioned back into being a full time carpenter on my sites again too lol. I like the exercise and the billable hours are worth far more than the mark-up I make on 5 or 6 guys. It's allowed me to do two jobs instead of six. I feel like I'm going backwards but I'm way happier. I also feel like I'm 20 again watching YouTube videos about tools, just replaced my 40 year old pouch with a fancy new Occidental vest dealy. And the craziest thing of all, I've switched to all 40v cordless Makita tools! Thought I'd bring those extension cords to the grave!

Those cordless tools have certainly been a game changer. We did a remotely located house last year with nothing but battery tools and Paslodes. I can't believe the run time on the 60V Dewalt skil saw and no more power cords and air lines snaking through the trusses.

 

[Rain City]

Those cordless tools have certainly been a game changer. We did a remotely located house last year with nothing but battery tools and Paslodes. I can't believe the run time on the 60V Dewalt skil saw and no more power cords and air lines snaking through the trusses.

I think it's safe to say they've officially improved the tech enough that they've surpassed corded tools.

 

[sly_karma]

so the municipal inspectors are not doing there job? coquitlam is sure strict.

The building code is a set of minimum standards, ie, the worst house you can legally get away with. It has nothing to say about workmanship or quality of finishes.

Inspectors are human, and the code is massive and growing every couple of years. As in every industry, the experienced building officials are retiring faster than younger ones are entering and getting certified. There is an overall shortage across the province and if a municipality is able to hire more inspectors, it's almost certainly just poached them from somewhere else.

Young inspector syndrome is a thing, same as with engineers. Inexperience often shows in the form of strictly by the book. The better inspectors have a trades background and know what works in the real world, and will overlook items where they don't cause a problem in that particular build. Of course, those guys are likely older and have only a few years left to work...

 

[sly_karma]

It's funny you say that. I'm old and tired and I just recently transitioned back into being a full time carpenter on my sites again too lol. I like the exercise and the billable hours are worth far more than the mark-up I make on 5 or 6 guys. It's allowed me to do two jobs instead of six. I feel like I'm going backwards but I'm way happier. I also feel like I'm 20 again watching YouTube videos about tools, just replaced my 40 year old pouch with a fancy new Occidental vest dealy. And the craziest thing of all, I've switched to all 40v cordless Makita tools! Thought I'd bring those extension cords to the grave!

This is me as well. Due to labour shortages and lengthy crew health issues (in the 30-40 yr olds!!!!), I've had little choice but to swing a hammer. The desk gets ignored, but my body likes it, I'm earning more and I have direct control of quality and timing. The trick is to be on the tools 25-30 hrs a week, feels like that is sustainable for the body and leaves me a little tìme for the business management end of things.

One of my guys retired from the RCMP in his mid 50s and started with me a dozen years ago. Made it clear he would only work 4x7 hr days, Fridays off. He's still the leanest, fittest guy on the crew at 66, and I suspect the deliberately restricted hours have something to do with that. Although he goes back to his 80 acre hobby farm after work and deals with steers, horses, chickens, dogs and fences. Guy is a frickin machine.

 

[uclueletcharters]

My experience not on new build but renovations many of them over the years. The cheapest guy will come back to the well multiple times before jobs done and will go way over budget. All the rest will go over budget and end price will be with in close range with all when done. I’ve tried on every project to stay on budget never once close so make sure you have a healthy account for run on costs. Maybe it’s a remote west coast thing but I can’t remember the last time I heard someone say their new build stayed on budget unfortunately.

I think that’s why prefab is becoming so popular do to price stability and quick to lock up stage. Custom home building can really climb well above initial numbers

One area you can really save is if you find a one man band that can mill your custom beams. The spread from a lumber yard to using someone like that as I did was huge savings. Plus nice getting true full saw dimensions. Had a bunch of 8x8 4x12 posts and beams cut from old growth cedar milled from trees removed from a building site. Just make sure guys fussy about set up so both dimension ends and through out are spot on.

 

[Rain City]

This is me as well. Due to labour shortages and lengthy crew health issues (in the 30-40 yr olds!!!!), I've had little choice but to swing a hammer. The desk gets ignored, but my body likes it, I'm earning more and I have direct control of quality and timing. The trick is to be on the tools 25-30 hrs a week, feels like that is sustainable for the body and leaves me a little tìme for the business management end of things.

One of my guys retired from the RCMP in his mid 50s and started with me a dozen years ago. Made it clear he would only work 4x7 hr days, Fridays off. He's still the leanest, fittest guy on the crew at 66, and I suspect the deliberately restricted hours have something to do with that. Although he goes back to his 80 acre hobby farm after work and deals with steers, horses, chickens, dogs and fences. Guy is a frickin machine.

Im right there too. 25-30 is the sweet spot. I have an office trailer now so when the rain comes down hard I go hide and do office work.

 

[Rain City]

My experience not on new build but renovations many of them over the years. The cheapest guy will come back to the well multiple times before jobs done and will go way over budget. All the rest will go over budget and end price will be with in close range with all when done. I’ve tried on every project to stay on budget never once close so make sure you have a healthy account for run on costs. Maybe it’s a remote west coast thing but I can’t remember the last time I heard someone say their new build stayed on budget unfortunately.

I think that’s why prefab is becoming so popular do to price stability and quick to lock up stage. Custom home building can really climb well above initial numbers

One area you can really save is if you find a one man band that can mill your custom beams. The spread from a lumber yard to using someone like that as I did was huge savings. Plus nice getting true full saw dimensions. Had a bunch of 8x8 4x12 posts and beams cut from old growth cedar milled from trees removed from a building site. Just make sure guys fussy about set up so both dimension ends and through out are spot on.

My budgets don't creep. The scope does. People seem to forget that. I don't know how many times I've heard "we like mid-range finishes". And then out come the marble counters and Bocci plugs.

 

[vike47]

My budgets don't creep. The scope does. People seem to forget that. I don't know how many times I've heard "we like mid-range finishes". And then out come the marble counters and Bocci plugs.

Probably the same reason guys look for fishing boats, and end up buying family cruisers.

 

[Rain City]

Probably the same reason guys look for fishing boats, and end up buying family cruisers.

Guilty

 

[Bifmalibu]

My experience not on new build but renovations many of them over the years. The cheapest guy will come back to the well multiple times before jobs done and will go way over budget. All the rest will go over budget and end price will be with in close range with all when done. I’ve tried on every project to stay on budget never once close so make sure you have a healthy account for run on costs. Maybe it’s a remote west coast thing but I can’t remember the last time I heard someone say their new build stayed on budget unfortunately.

I think that’s why prefab is becoming so popular do to price stability and quick to lock up stage. Custom home building can really climb well above initial numbers

One area you can really save is if you find a one man band that can mill your custom beams. The spread from a lumber yard to using someone like that as I did was huge savings. Plus nice getting true full saw dimensions. Had a bunch of 8x8 4x12 posts and beams cut from old growth cedar milled from trees removed from a building site. Just make sure guys fussy about set up so both dimension ends and through out are spot on.

I think the best way to keep to a budget is to have a realistic, comprehensive estimate of the job in it's entirety. There are a lot of builders who quote enough of a project to win it, but they haven't included everything. All the small things like site fencing, porta-potty, site clean-up, garbage bins etc etc. These things add up to a bunch of money that will absolutely destroy a budget.