Future Home Build - Hire a GC?

buckeyefarmer · Oct 17, 2013

txdon said:
Buckeyefarmer, did you have any experience with building or how did you acquire you knowledge on homebuilding? How did you locate and hire your subs?

That's a loaded question, lol.
I grew up on a farm, we did everything ourselves if we wanted it done, that includes framing, roofing, painting, electrical, plumbing, etc. pretty much everything to build a house. My dad built his own house, when I was young, but he started with a portable sawmill and sawed his own lumber. I've always been interested in construction. In grade school when we had to say what we wanted to be, I was going to be a builder. In high school I wrote a research paper on bridge construction that my teacher said was one of the best research papers she had ever seen.

I ended up being an engineer, have a PE license, and worked on lots of commercial construction projects both as a designer and construction management. I designed several house plans before I settled on what I built. While I was designing my house, I was also teaching design and construction specifications classes at a local community college. But I still had never built a whole house before, but had several friends in the trades and a good friend who was a builder. I helped him build his current house, and he in turn helped me. I used some of his subs, and some I found thru my neighbor who was building at the same time, and some thru work mates, since I worked in an engineering office. I also did a lot of the work myself, only sub'd out the really hard stuff, like , excavating, poured foundation and slabs, and a few others due to time. I got all the permits and did the framing, roofing, plumbing, electrical, windows and doors, painting, finish carpentry, installed all appliances and fixtures, built my own kitchen cabinets, and put the well pump in. I did sub out the siding because I was running out of time on my construction loan, insulation because they could do it cheaper, ductwork, drywall and finish flooring. I got my hvac units wholesale from a supply house, and I sub'd the install. I have since replaced my heating (oil boiler) and hvac with geothermal that I installed myself, after getting accredited as a geothermal installer.

Recently I designed a new building for my church. These plans were also coordinated with an architect, and we used a GC for the construction, and he did a great job, and was well worth the money paid. Commercial building have different rules here than residential. I didn't have time to be GC on that project. He built the building in 24 weeks, start to finish, and had a great site supervisor on site the entire time. I thought about running a thread on that construction, but just didn't have the time.
I really enjoyed Obed's and Pclausen's construction threads, and I think anyone with good understanding of construction can GC themselves, but yes, there are risks. It's harder to get a construction loan, that's for sure. My original construction loan was for 6 months, I got a 2 month extension the first time I asked, and I had to fight harder to get another 1 month extension. but the bank sent inspectors before all draws. In the end, I built, mostly by myself, with friends helping on weekends, in 9 months while working full time, and with a baby.

dmccarty · Oct 18, 2013

woodlandfarms said:
So what is the real finances of a general contractor? Meaning, what do they get paid on the surface, and what do they skim from underneath? What can a person expect to save by being their own GC? To some this may be hard to answer but don't get hung up on the details. Yes, we know GC can probably get a better deal on materials than a one off, but how much of that better deal is passed on to the client? And yes, we know a one off might go through three subs finding the right electrician.

I ask this as my neighbor was his own GC. He worked hard at it, it was a full time job on top of his full time job. But the savings he mentioned to me seemed too good to be true.

The finances depends on the GC. I think we paid the GC 15%, maybe 20%, of the "base" price of the house. I cannot remember the exact percentage the GC charged but it was lower than most GCs. The "base" price of the house was everything needed to get the CO to allow us to move in. Our GC was cheap and did not like to spend money.

:laughing::laughing::laughing: He lived in a very modest modular home and was very much about minimizing costs in a good way. What this meant for us is that the "base" house price was NOT something we wanted. The "base" house had cheap counters, faucets, trim, windows, doors, etc. Perfectly functional but not want we wanted. This was to OUR advantage not his.

We had an allowance on the items like trim, windows, doors, cabinets, faucets, counter, etc. If we went over the allowance we had to pay the extra amount of course but the builder did not charge for the overage. His fee was based on the "base" house and our overages on the allowances did not cause in an increase in payment to the GC. Nor should they either. It is not costing the GC extra to install a cheap window vs an expensive one.

Now we knew full well that the "base" house was not what we wanted so we had two sets of costs/expenses, one was the builders and the second was ours which included the GC's price and our overages. This second set went to the bank.

We picked and bought almost every visible component of the house, windows, doors, roof shingles, brick, interior/exterior trim, can lights, ceiling fans, plumbing fixtures, cabinets, counter tops, etc. The GC did not do anything but coordinate the installation of these items. The GC handled buying the concrete, well, septic, gravel, and lumber. Nails were part of the framers cost/expense. I know our GC made/saved money on the lumber because he very carefully bought certain sizes to minimize waste. He might have pocketed some savings in the bill to us but I was paying him to complete the job and his expenses for the lumber were appropriate. We had VERY VERY VERY little lumber waste. I was not able to scrounge a danged bit of wood. :shocked::laughing::laughing::laughing:

Our GC certainly could not "skim" any savings on the house materials because we did all of the ordering and buying. He certainly would have done the ordering and buying but we wanted certain items and we had to choose those items. Choosing items is hard work and required a lot of time on our part. We also had worked out a discount with Home Depot that saved us 10% for things we ordered for the house.

I would not think the GC can save that much money buying materials over anyone else. I suppose they might get some savings but most GC's I talked too and would consider hiring, were only building 2-3 houses a year so they were not buying huge amounts of material. We got a 10% off house materials at HD I would be a bit surprised that a GC could get a much higher percentage. When we built, there was a shortage of concrete and prices were high. We paid $95-100 a yard for concrete. I don't know how many yards we used for the foundation but it was not much. We have a slab home and we used 35 yards for the floor or about $3,500. I don't see the plant giving the GC a better price for 35 yards of concrete. Maybe a 10% or $350?

I never ever thought of the GC saving us money on materials. The GC's advantage over me is his ability to get the better subs, get them on site at the right time, know construction details that I will not know, be able to anticipate the inspectors, be on site with the inspectors, handle decisions or provide me with options for me to make decisions to solve a problem, get the job done, etc. The amount of money we paid the GC was certainly a fair price for someone's time to simply mange building a house. It certainly would have been nice to save that money but I have two jobs as it is and having ANY free time is difficult. There is no way I could be our GC and to do so would have been very stupid and a financial disaster. That alone required a GC. Everything else the GC did was gravy.

The wifey and I agree on most things and we only had two "disagreements" about the two little nits in the house. Both nits were about having a half wall in certain places and she was right in pushing for the half wall.

Building a house can take a bunch of time if you wanted it done just so. If a couple is building a house, they had all better be on the same page, realize the time requirements, and the resulting stress. Adding the GC job to the home owners responsibilities is that much more work, time and stress. What we paid the GC was money well spent.

Later,
Dan

mostly_gas · Oct 18, 2013

We built in 1985. Custom building price at the time was $50 a square foot it cost us 40. We were the the GC, had a number of family members in the construction trade so were able to find good subs. We would do it again, probably sub a bit more out.

paulharvey · Oct 18, 2013

I think a big part of the choice is weather you can live with it taking a year to build a house. A basic home can be built in as little as 90 day's, but I hear many stories of Diy GCs taking multiple years to finish. That fine if you dont mind. If your trying to sell old home, remember thats a years worth of mortgage payments, power bills, insurance ect.

Pettrix · Nov 28, 2013

I was thinking of building a guest house first, maybe 1,300 square feet and doing the interior finishing myself. Is it feasible to knock out a simple single level 1,300 square foot home for around $45 per square foot if I do a lot of the finishing work myself?

dave1949 · Nov 28, 2013

My guess is no, it isn't possible.

A way to look at it is what is a typical per square foot cost for the style of home you are building in your area if it were turn-key?

What percentage of that cost/sq/ft is interior finishing? Probably someone here has a better insight, but if 50% of the interior finishing is labor, that's what you can save, to knock of the total per/sq/ft turn-key for the interior finishing percentage only.

EddieWalker · Nov 29, 2013

If you are just wanting a shell built, then that would be priced similar to a barn or a garage. Not knowing your area, that should run anywhere from $25 to $35 a square foot for a simple shaped building. You can build an entire house for $60 with entry level materials and finishes. I did all the work on my house except the slab and HVAC for $30 a foot. I've upgraded some stuff since then, but it was pretty nice when I was done, and it had a 24x30 foot garage/shop attached to it for that price with a concrete floor and 12 ft walls.

From what I've read in the trade magazines, 1/3 of the cost to build a house is materials. The rest is labor and fees.

Eddie