Being Your Own General Contractor
We want to build a house to sell it and
make a profit. We are new at this and just want to start with one house and be the general contractor. As of now this would be just for extra cash. We are not looking to quit our day jobs. We would just like some opinions/advice on this. Anything would be appreciated. Thank You.
I may not be the experienced guru you all would have hoped to hear frombut I'm in the same deal you're talking about but I'm not the contractor only financed for a construction loan. I did buy a book to learn how to be my own next time. I'm mainly doing this first one to pick up some capital after the sale hopefully jun-sept time frame.
Most important is either have a background in construction or get one by starting now. You hire a contractor to do this house for you and you are there at each stage of construction. From layout of the lot. and foundation lines and the decisions as to where the utilities will enter the house. All the way until the last painted item is finished.
To be a General Contractor you must know the work. Most begin with a Master Trade and they slowly expand out until they can identify good work from bad, in all trades. You will require some licensed journeymen around especialy for plumbing and electrical.
The work can be learned but you have to pay attention and keep notes.
You may in time come to enjoy the work.
It will change your life. Oh the new words you are going to learn. Some printable.
TripleTrade Lucius
From what I understand you can be your own contractor as long as YOU own the property. You just have to file a business license. You do not need to be a licensed contractor on your own property. You would just hire licensed journeyman.
Everything I have heard or read in regard to being your own GC says that you end up spending more money than if you hire a good builder and let them be the GC.
It all seems to hinge around the fine art of timing. Timing to get the right materials on site at the right time, timing to get the right subs on the site at the proper times and timing to get the inspections done at the right time. Miss timing of one ends up running into the next and the next and ends up being the downfall of most be your own GC's.
Experienced GC's know that its like a line of dominos, one missed domino and the rest don't fall into the next, resulting in delay after delay, missed windows of oportunity causing more and more cost over runs.
Wait, wait everyone!! I have done a lot of research on this and came across a great company that...don't know if they work in your area...but will ASSIST you in being your own GC. I have contacted several of their references and not one had anything negative to say about them. Most people built their own house and walked in with 40-100K in equity (dep on the value of course). My husband and i are going to do this too. The company is called Owner-Builder Network based in Houston TX. I don't know where all they build, but if not in your area maybe they can recommend someone for you.
Basically what they do is give you a step--by-step manual of how to do it yourself, even for someone who's never built a house. They hold your hand and walk you through it, although you have to do all the legwork (getting contractor bids, etc.) yourself. you can even do some of the contract work if you choose to.
Their fee is like $3 a sq foot - you will end up spending less than 10K if your house is normal size. Seems worth it to me. Like i said we haven't done it yet, but after talking to real live people who have, they all said it was well worth it, great support from OBN, and would do it again, esp for the equity they walked into it with.
One couple said they are thinking about selling the home they just built for the same reason you're wanting - get nice fat cash right away, and build again.
Good luck. here's their site.
****Must Reach Freshman Investor status before posting URL's***
OK they won't let me post the URL here but you can put your own www on the front of OwnerBuilderNetwork and then the .com after it.
April[ Edited by TRAVELHUNI on Date 11/25/2003 ]
Hi klg...
Welcome to TCI
Being your own contractor can save you money however if you are not careful with planning ahead as well as picking good subcontractors then you could come out in the hole.
Since I am a contractor....here is just a few tipsI offer to those that want to take the challenge.
1. Know your Budget and stick with it.
(allow a minimum of 10% for extras and the unexpected)
2. Pick a plan that will fit your budget (not including what "you think" you will save).
If you're going to eventually sell it.....then make your plan appealing enough for others.
3. Learn the zoning and building department well, including the inspectors. Seek advise from them including their knowledge of the subs you will be using.
4. On financing issues.........findout what the procedures are for draws and fee involved if any. If you're going with a traditional lender, ensure that your draws will be based upon what your invoices are and NOT by some outdated "percentage of completion" form that has not been updated in 20 years.
5. Suppliers.
Just remember....Service first, price second. Check the quality of their lumber too.
6. Subcontractors.
Again, Service 1st, Price 2nd.
Make sure you get lien waivers from your subs when work is complete.
Also have them give you a copy of their Workers Compensation and General Liability policies and review them.
Some subs will overlap and may need to work with one another......have them communicated with each other directly.
No subs should be paid upfront...no exceptions. Withhold an agreeable percentage for punchout.
7. Flow Schedule.
You should have a schedule (realistic) of who should be doing what, when and how long it will take to finish.
With this it will help you when knowing when to call the next sub IN ADVANCE.
Make sure you get that last line.....IN ADVANCE. Keep your subcontractors up to date on your progress and when you expect to have them at your job.
Have any and all material ready for them when they show up. This may have required you sitting down with them in the beginning to work these details out in advance. Some "special order" items may take weeks or months to get in............do your home work.
8. Sweat Equity
Know your talents, limitations and time table. If you can do the job in a professional manner (because this is an investment and should be treated as such) and in a timely manner as well, then have fun.
Just remember to keep to your time table.
9. Expect the unexpected.
Its going to happen. Always does.......dont panic.....just work through it and learn.
10. Personal Relationships.
For all the custom homes I have built, I have yet to find a couple that has not had a heated arguement in front of me.
Building is stressful for the pros.....its even more stresful for those do it yourselfers.
Whoever does the cooking gets to have the kitchen laid out THEIR way.
For the guys......be happy with a garage and a workshop if possible....other then that keep your mouth shut except for the YES DEAR.......here and there.
(although the guys are usually the ones that keep the budget in check)
Good luck and enjoy.