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How I Had a Builder Build Me a House For Free and Other Adventures In Construction.

Updated: 2 days ago

A friend was going to do some repair work on their house, and they were initially resistant to paying a GC 25% - tons of complaining about paying that fee. 


“Why would I do that? Just help me find the trades Jen.”


It took a while to explain why hiring a builder makes excellent sense. 


Let's start with why I sometimes manage small projects on my own. 

The last one I did was a small bathroom remodel at my house.



If you want to remodel a small bathroom, the whole bathroom might cost $20,000 with no GC fee. If I found a contractor charging 25%, that would be $5,000. 


Let’s walk through what this person would have to do for you to get excellent quality work.


  • Talk to me about a plan no less than four times (8 hours), 

  • Draw a few options for layout

  • to help me pick tile, sinks, and faucets (20 hours)

  • Re-work layouts based on the items that I pick (sink vanity etc.)

  • Project manage all the trades they need for demolition, framing, electric, drywall, paint, and tile. Securing permits. (6 hours)

  • Managing the work six weeks @ 20 hours/ week.

  • $5,000 for 150 hours at a minimum is $33/hour.


Do I want them also to carry insurance?  Add that to their cost. 


Should they be available at my house during all business hours if the framer doesn’t come when they said they would? That means they must be on-site 40 hours a week for 6 weeks +/-.


That is a total of 270 hours to complete my bathroom project.


At this point, they are making $18/hour, with no overhead costs included, like insurance and tools. For $18/hour, I can’t imagine I’m going to get the highest-quality work. This is the reason I end up managing small projects on my own. It would be too hard to find someone who is excellent at what they do for the money they would make on a project that small.


This model isn’t very lucrative, and anyone who is good at it might get into bigger and better projects as soon as possible.


This is why I manage many of my small remodeling projects. However, I am not a perfectionist—not even close. My quality suffers because I manage it myself.


Fast forward to the next project, I was going to take on.. Building a garage apartment.



We designed and are in the process of building a garage apartment behind our home to give us more guest space and more space for entertaining. I was planning on building the project myself.


I managed it myself during the designing phase, working with the architect and structural engineer to develop a plan.


I have managed many remodeling projects that I GC’d for myself. We also help our clients with light prep when they sell all the time, but this was going to be ground-up new construction. The scope was very different.


Then, my builder saved me from myself and took over the job.


First, he looked at the plans and noticed that the foundation seemed over-engineered.


After a few calls, he realized the engineer had not reviewed the soil test even though it had been emailed to him. 


Cost savings #1$40,000 

The builder interviewed so many trades!  Foundation companies, framers, plumbers, etc. Through this process, in which he has invested countless hours in over the years, he has secured the best work for the lowest cost possible.


The builder representing a significant volume of business can get the work done at better pricing than I can.


This bulk pricing means 20% savings on $400,000 expense.


Cost savings #2$80,000

Current total savings →$120,000


Indirect wins from using the builder.

  • Accounting with the bank

  • Accounting with vendors

  • Managing the vendors

  • Managing the build

  • Getting far better outcomes than I would get


Well then, what is the builder going to cost me?


He saves me $120,000 AND manages the project for me for a year. 


He would certainly charge me close to $200,000 for this, right?


Nope. 25% of the build cost.


  • He saved me $120,000

  • He is paid $100,000

  • And he built the house!


Effectively, the builder built the house for free.

Some people are DIY folks, not me.


If you are DIY, you are taking yourself away from the work you get paid to do, and you force yourself to learn new and complex things that someone else can do more efficiently.


Best to let the professionals do what they do best.


We are delighted to be your guides to real estate and always happy to nerd out of the details with you.


Cheers,

Jen & the team








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