Contractor Vs Owner Builder Issue

 
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Old 05-13-2010, 04:04 PM   #1
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Contractor Vs Owner Builder Issue


How would you guys all handle the following situation?

A potential client called me from seeing my company sign in front of a larger remodel/addition we are doing. They would like to do a addition on the back of their home and heard I was doing good work at this other project. The project they want to do is only about $20k in total including my fees. They wrote me back the following email:

"Thanks for your time and bid. Everything looks good and the ???'s say they are happy with what you are doing. Would you be interested in working with me if I were the general, got permits in my name and did most of it myself? The only things that I would not really be comfortable doing would be the support beam and the trusses. Could you give me an idea of how much it would be for you to do that and how much the materials would be? I am sure you would do it much faster and better, but I kind of enjoy doing these things and wouldn’t mind looking at doing it myself."


Almost every project owner I have had in the last year has wanted to do portions of the work themselves to save money and because they say they enjoy it. Then they end up taking so long that 3 month projects drag out to 8 or 9 months, quality suffers because of the items they do, and we struggle to get the projects completed. It is a tough market though and it is tough to turn jobs down. This job would be a simple job for us and would probably only take about 6 weeks or so to do as there is no plumbing, little electrical and hvac, and mostly just framing and a few interior finishes. The addition is over an existing deck area that the engineer has stated is already sufficient in strength to hold the new area up. What would be a very easy project would be complicated by letting this owner do much work. We do all the framing, trim, wood floors, siding, window install, etc as in house items. Suggestions? How have you guys been handling clients like this?
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Old 05-13-2010, 04:06 PM   #2
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Re: Contractor Vs Owner Builder Issue


Send them down the road is the best way to handle this situation.

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Old 05-13-2010, 04:57 PM   #3
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Re: Contractor Vs Owner Builder Issue


Straight hourly fee. I have a couple going on 10 years. Sometimes, I have to tear out and start over, but I get paid for all that too.
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Old 05-13-2010, 05:12 PM   #4
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Re: Contractor Vs Owner Builder Issue


Quote:
Originally Posted by jakejorgenson View Post
How would you guys all handle the following situation?

A potential client called me from seeing my company sign in front of a larger remodel/addition we are doing. They would like to do a addition on the back of their home and heard I was doing good work at this other project. The project they want to do is only about $20k in total including my fees. They wrote me back the following email:

"Thanks for your time and bid. Everything looks good and the ???'s say they are happy with what you are doing. Would you be interested in working with me if I were the general, got permits in my name and did most of it myself? The only things that I would not really be comfortable doing would be the support beam and the trusses. Could you give me an idea of how much it would be for you to do that and how much the materials would be? I am sure you would do it much faster and better, but I kind of enjoy doing these things and wouldn’t mind looking at doing it myself."


Almost every project owner I have had in the last year has wanted to do portions of the work themselves to save money and because they say they enjoy it. Then they end up taking so long that 3 month projects drag out to 8 or 9 months, quality suffers because of the items they do, and we struggle to get the projects completed. It is a tough market though and it is tough to turn jobs down. This job would be a simple job for us and would probably only take about 6 weeks or so to do as there is no plumbing, little electrical and hvac, and mostly just framing and a few interior finishes. The addition is over an existing deck area that the engineer has stated is already sufficient in strength to hold the new area up. What would be a very easy project would be complicated by letting this owner do much work. We do all the framing, trim, wood floors, siding, window install, etc as in house items. Suggestions? How have you guys been handling clients like this?
Tell him exactly what you told us about how it always works out.

I always say no to any jobs that homeowners want to be involved in, it just doesn't fit in with what we do, some understand, some don't.
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Old 05-13-2010, 05:27 PM   #5
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Re: Contractor Vs Owner Builder Issue


I've done quite a few framing jobs for HOs that contracted the project themselves. In my case, none of them wanted to get involved with any of the framing, but planned to do siding and trim, etc. themselves.

After they saw how efficiently the framing moved along and the quality of the work, many of them asked me to work up a number for other aspects of the job. In most cases I ended up with the other contracts.

There for a while, this was commonplace in my area. I got many referrals from one HO to the next, which worked out great for a relatively new business getting off the ground.

I kind of hope as the economy picks up, folks start doing their own contracting again. The money was better than bidding work for GCs in my case.
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Old 05-13-2010, 06:09 PM   #6
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Re: Contractor Vs Owner Builder Issue


Quote:
What would be a very easy project would be complicated by letting this owner do much work. We do all the framing, trim, wood floors, siding, window install, etc as in house items. Suggestions? How have you guys been handling clients like this?
It sounds like an easy enough project if you can keep a flexible schedule for the second phase.(interior )
Sometimes HO's aren't all that fast in scheduling the other subs,but it sounds like you could accomplish most of the drying in without a problem,other than the location of possible exterior fixtures,or roof penetrations.

I'd be sure to get paid in full at the end of each phase in case the HO misjudges his costs.

Make sure HO gets enough material on site to avoid down time.
If he's buying the material,he needs to know any hold up will cost him.
Have him go to his yard and get his own material list for his plans.If he wants to GC it,that's part of his job.
Then you'll also know he's serious about using you for the work.

We did one last year where the HO put me on as an approved buyer on their lumber yard account.
If we ran short of anything,we could just call it in ourselves.

We did get held up by the mason for 8 months( to finish siding),but I got paid on what was accomplished.
It worked out good ,and got several referrals from that one.

Last edited by oldfrt; 05-13-2010 at 06:11 PM.
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Old 05-13-2010, 09:01 PM   #7
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Re: Contractor Vs Owner Builder Issue


Quote:
Originally Posted by jakejorgenson View Post
How would you guys all handle the following situation?

A potential client called me from seeing my company sign in front of a larger remodel/addition we are doing. They would like to do a addition on the back of their home and heard I was doing good work at this other project. The project they want to do is only about $20k in total including my fees. They wrote me back the following email:

"Thanks for your time and bid. Could you give me an idea of how much it would be for you to do that and how much the materials would be? I am sure you would do it much faster and better, but I kind of enjoy doing these things and wouldn’t mind looking at doing it myself."


Almost every project owner I have had in the last year has wanted to do portions of the work themselves to save money and because they say they enjoy it. Then they end up taking so long that 3 month projects drag out to 8 or 9 months, quality suffers because of the items they do, and we struggle to get the projects completed. Suggestions? How have you guys been handling clients like this?

Tell them the original price plus 50% for delays and baby-sitting.
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Old 05-13-2010, 09:07 PM   #8
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Re: Contractor Vs Owner Builder Issue


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Originally Posted by tinner666 View Post
Straight hourly fee. I have a couple going on 10 years. Sometimes, I have to tear out and start over, but I get paid for all that too.
Right- Time and Material is the only way to go on that one, and you should get your hourly rate for consultations as well!
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Old 05-13-2010, 09:20 PM   #9
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Re: Contractor Vs Owner Builder Issue


Sounds like they just want you to do a little framing and go about your way. Charge a little more than normal for material shortages, improper design specs and counseling and you can make it work. My guess is you'll get leaned on for advice when the HO doesn't know how to do what he wants to do, maybe you could set up an hourly consultation charge.
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Old 05-13-2010, 11:59 PM   #10
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Re: Contractor Vs Owner Builder Issue


I get resturant people wanting to pretend to be GC all the time. They have absolutly no concept of what is entailed. I can tell them the process, what they need to plan for, what other trades need to be used, and still nothing works. Now, if there is not a real GC, or I am not the GC, I add 15 % to my bid. That way I am compensated when the inevitalble screw up happens.
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Old 05-14-2010, 04:00 AM   #11
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Re: Contractor Vs Owner Builder Issue


Very few owners have the knowledge or skills to play GC. I generally say thanks but no thanks however there are some rare exceptions.

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