Thinking About Following Through With A Dream Of Mine

carlspackler

I have been dreaming of starting my own remodel business ever since I bought my first home 15 years ago. Since then I have owned 5 homes and have remodeled all of them for big profit (a little help from appreciation as well).

One example is a home I had in Washington state. I bought it for $440,000 and remodeled only the kitchen by gutting it, removing a wall, installing hardwood flooring, and all the new goodies like cabinetry and appliances you'd put into a new kitchen. My expense on that remodel was $25,000 as I did all of the work myself. I sold the house with multiple bids for $560,000 1 year later. Buyers raved about the kitchen. Most of my other homes were like this as well.

I've had a desk job for 15 years now and I'm ready to get out of my chair. I think my accounting degree/experience can only help me in this whole deal of running my own business.

While I would love to pursue this dream of mine, I worry about a customers interest in quality workmanship. I take my time and do the job right. I pay strong attention to detail and finish work. If I do something and it doesn't look or function right, I make it right.

I have a neighbor who does odd jobs for people in terms of home remodeling. I've seen some of the work this person does in my neighborhood and I'm not impressed. But the homeowners seem to be very content with it. I've seen bad miter cuts, sloppy paint work, bad tiling and flooring, horrible drywall seams, uncovered nail holes, etc. Not sure of any other problems underneath all of this. Am I overly anal? If so, then this may not be a dream I should persue.

So here are my questions to the experienced people on the forum:


1. Are there many single person remodelers out there who do 95% of the work on a remodel on their own?

2. Do people pay more for proven quality or are most of them just looking for the lowest bid job? (ie do they know what good quality is?)

3. Wondering also how I could advertise quality workmanship to potential customers.


Thanks for your thoughts as I consider this. I am planning here way in advance as I wouldn't want to start this full-time until 2007, if at all.

Cole

1. Yes there are, and they usually make great money.

2. Depends on the customer.

3. Your best advertising is going to be from word of mouth for quality work.

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Mike Finley

That is also almost exactly my background.

You will have to make a small transition only in trying to make sure to get it right the first time and developing acceptable benchmarks for when right is right enough if you want to be profitable. A lot of that comes easily if you have those goals in mind since you are repeating the same processes which you will do more frequently when this is your full time job rather than part time working on your own homes. It's always great to do something over and over again until it is right, but to run it as a business you really need to shoot for doing it once and getting it right.


Keep in mind a customers reality is based on his/her perceptions and not yours. Customers tend to get more focused on the excitement of getting to use their new kitchen to entertain their friends then on a sloppy miter that will stick out like a sore thumb to you.

It can be done depending on the work involved but often you aren't going to have the same freedoms you had working on your own home. While most places let a homeowner run wiring and do plumbing on their own home, they won't let you do this on someone elses.

You should think in terms of "value", people want a good value. Value will mean many different things to many different customers. To one customer value might mean a $100,000 kitchen with the best of everything, to another it might mean building a dog house using wood left over from another project.

Just walk the walk and talk the talk.

Bob Kovacs

1. As Cole said, yes there are. But many of them aren't making much money doing it, because you can only bill so much per hour, and you're limited by how many hours you can work in a year. If your desk job is a $40k/year gig, I'd say you can more than replace that. If it's a $150k/year gig, you've got a problem.

2. Most people say they want quality, but the majority of them wouldn't know a quality job if it kicked them in the head. Therefore, it often comes down to price, and there are tons of contractors out there who can cut your price since they're willing to work for nothing (see #1 above). Of course, there are also always the customers for which price is the only thing that matters, and you need to do your best to avoid them at all costs.

3. Everyone advertises "quality work"- have you ever seen a business card or ad that says "so-so quality at a high price" or "we're just OK"? See #2 above for why it doesn't really matter.

What you need to find are the people who value a prompt return of a phonecall, a professional appearance and presentation, and a showing of respect for both their property and their desires. The people who have been hosed before by the low-price, never returns a call contractors can be the best customers to have.

And a book of pretty pictures of your quality work doesn't hurt either....lol.

Bob

PS I'm sure you've already figured this out, but bear in mind that "remodeling your own houses" and "being a remodeling contractor" are two entirely different things. Having to deal with all of the business aspects of owning a one-man show quickly reduces the amount of time (and the enjoyment) of actually creating the projects.

carlspackler

I do realize some of this. There is freedom in working on your own home. Are you saying that a licensed electrician or plumber is the only one that can do work on someone elses home?

Mike, do you still buy homes and remodel and sell them? I was thinking I would do a combination of this and remodel contracting.

Marc

carlspackler

Not sure that I have...I am expecting a fun time always!

However, I know there will be pitfalls, just not sure what they are. What reduces this time in your opinion?

Bob Kovacs

Yup- in most states where there's any sort of regulation (probably over 95% of the country).

Bob

carlspackler

Great, now I'll need to go out and get that license.

Bob Kovacs

If you're remodeling your own home, you can spend 40 hours a week actually swinging a hammer. When you're running your business, you've got two choices:

1. Continue swinging a hammer 40 hours a week, and spend an additional 10, 20, 30 hours a week meeting with potential clients, preparing sketches/estimates, meeting with subs, paying bills, meeting with the clients on your current projects, chasing permits, and doing all of the other stuff that comes along with owning a business.

2. Do all of that stuff during a normal work week, and therefore have less time to actually do the work.

Personally, #2 is my preferred option, as I have no interest in working 60-70 hours a week- but that leaves less billable labor hours to actually get paid for. That requires either a higher hourly rate, or the need to survive on less $$. This is even more difficult as a multi-trade remodeling contractor, since there's more sales/estimating/handholding involved than if you were say, a tile setter, or a trim carpenter, IMHO.

Bob

logical

When I work on my own house it's OK if it takes months to finish out my basement because I am just one guy and a bit fussy. But if I was paying someone I want it done fast. And because it is my house I can do plumbing/electrical/whatever (although technically I should get permits), but I can't have my neighbor pay me to wire and plumb his basement.

My point is just that in addition to the license issue mentioned, you might also have trouble on larger jobs being able to quote getting done in a timeframe that a customer can live with.

Bob Kovacs

Good luck there. I'm pretty sure Minnesota requires electricians and plumbers to be licensed, and those licenses require 4-5 years of verifiable training/work in the trade. So, unless you plan to spend the next 4-5 years working strictly as an electrician or plumber, you're much better off hiring subs for those trades.

Bob

carlspackler

I was winking...as in just kidding. No way would I do that.

Mike Finley

Well there is always the homeowners permit, where like you have been doing on your homes you pull the permit and then you are responsible. Some contractors have homeowners pull homeowner's permits and then they do the work and the homeowner calls for the inspections. Personally I don't like that routine very much, I personally don't think it is a very honest or long term solution. Homeowners put in this situation rarely have contractors who divulge the great risk the homeowner is really putting themselves into by doing the homeowners permit shuffle. Also in some places it may actually be illegal to do this.

Yes. I am now switching to buying, fixing and renting. I'm living in my last fix up now, but this probably will be the last one to buy, fix and live in. I've gotten to the point where I have so much equity I will be able to buy a nice piece of land with a view and build a mac daddy home for us for cash.

A couple of things I found as a big difference making the switch from working on your own home to somebody elses is you have to become extremely organized. Big difference just running out to your garage for a tool you need! As a contractor if you have to make even one run a day for materials or tools you forgot for that day you blow so much productivity it isn't even funny. Being very organized and making lists helped me through that. There are a lot of other things that are different that you will discover along the way.

carlspackler

I can see the organization hurdle I'll have to overcome. Back in 1997 I bought a home strictly for remodel, never lived in it. I spent 4 months renovating the house and then sold it. Had all my tools there so I kinda tasted how well I need to be organized. But when someone else lives in the home, cleaning up everyday will be new.

I have a ton of equity in my home and I'm pretty well set for retirement NOW at 40 years old. That's a big part of the reason for me wanting to make this switch. I am looking for quality of life from here on out. I definitely don't need to make 150k a year doing this, but feel I can just from what I've done in the past. I could easily get by on 40-50k per year.

Plus, I love the work. I feel like I've had two jobs for the past 15 years, my day job and my home improvement stuff. One I had to do, the other one I wanted to do.

Should be interesting.

Cole

Go for it!!!

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MinConst

Carl,
I have done just what you want to do. I did remodeling work for most of my working life. It was done because I loved it. Allot of the learning came because I couldn't afford to have it done. I am back at SE and wouldn't have it any other way again.
BUT
I know of many people that turned a hobby into a business and find it ruins their love for the hobby. Self Employment can ruin the fun of doing anything. But if you can get through the small hassles of SE it is worth it. Enjoy doing what your doing for a living can make a world of difference.
Good luck and I hope you go for it!

__________________
Paul
Minichillo's Construction
Website
I will never leave you hanging!

pwrpapa

Why is every Tom, Dick, and Harry a contractor? It's not that much fun, is it?LOL

nadonailer

Carl, Bob K's advice is, as always, pretty right on! It will be a HUGE transition working for other people, you will sometimes find yourself building a ugly crappy home that you wouldn't be caught dead in, yet if they're paying the bill all you can do is give them the best quality work you can. You will lose your analness (sp?) pretty quick, though
You can actually make more money than has been suggested as a single man operation. I don't charge by the hour but I bid high a) because I'm worth it, and b) because the area I live in will pay almost any price for quality work, and yes they do recognise it!
Your area may vary so just do your business plan projections to see if the hours you will have to work will make it worthwhile for you and youe family...
Good Luck!

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"History does not long entrust the care of freedom to the weak or the timid”.
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CNLPAR

I'm making the jump right now. Except I'm going from driving a concrete truck for a living(beating the Hell out of your back to finnishing concrete to remodeling and building. Enjoying the challenge of learning something new makes it all worth while.

Mike Finley

I second this. For me I have never been able to turn a hobby into a business and not ruin the hobby, I really don't see how anybody could make the switch without the same effect. Every hobby that turns into a business becomes 90% business and 10% what you were doing before and that ruins it for me.