Building Your Own House General Contractor, Me!

bposkier

I know alot of you guys are very talented, and many of you would like to attempt building your own home someday. General contracting can be a great way to getter' done.
I am now a handyman by trade, just me for now, after being in the machining trade for many years.
Anyway, the advantages monetarily ($) are substantial, it can work when self employed and flexible. There are many books out there to self-educate. like how to find contractors and such. I have spoken to many on sight home builders/contractors and have learned a lot.
I have looked at many homes in the Austin, Texas area in the process of construction. I know many of the codes but I am having trouble finding data on how much per foot on the average a middle class home could cost. Is the number 25% -40% savings a real number contracting it yourself or just BS. Can we talk?

Teetorbilt

Where are you? AGAIN! Laguna Beach,CA will cost much more than Flat Rock, TN.

I would suggest hiring a retired GC to aid you. I have a friend (a complete idiot with tools and construction) who built his own home this way. He admitted that he was labor from the start.

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You can't solve you're problems with the same level of thinking that created the problems.

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Tscarborough

He is in Austin, it appears.

joasis

I had a guy tell me this weekend he is going to "build" his own house, and what did I think? I said get an easy button from Staples....everytime something comes up, just press away....and do buy extra batteries.

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K2

The margin in my area is more like 10% on a good day. If the guy is inexperienced the margin decreases and can go negetive. There is lots of competition. In my opinion the smart money shops builders and or completed homes. We've sold specs at or below cost for different reasons.

In my experience Owner/ Builders who brag that they built below the normal sq ft price generally don't include all the costs assosiated with building and from the many I have seen the houses are simply not completed. It costs a lot to punch out a house and most O/B's never get close to the punch part.

If there was a 40% margin in building there would be no doubt that every other person walking down the street would be a builder. Doctors and lawyers would be closing their offices and standing in line to get a GC license. That's my opinion anyway.

joasis

If there is an advantage, it would be a contractor building for himself, where he is paying his labor as opposed to paying the going sub rates for framing/drywall/roofing/etc. If the margins in building were truly 30% and up, you would see GC's with their own crews, and not see nearly as many subs on a job site. We have been over this before, but a 10% margin on a home is pretty typical.

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onhitch

10% is what i am hearing here in PA as well.

Zatol

In my case, the 10% would be after paying a realtor fee of 5%.. So, I say that it would be possible to save about 15%. That is, if you were an experienced builder.

I do not believe that most owner/builders can actually save any money. In fact, I bet that they would struggle to build it for what a builder could sell it to them for.

Teetorbilt

The person that I referred to built a $330K home for $138K working nights and weekends. Kinda gives you an idea of labor costs.

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You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

Tscarborough

Being the Contract co-ordinator and building your own house are not the same. If you do a lot of the work yourself and use your contacts to get discounted prices on materials and do some labor-swapping, you can do it for much less than you can contract it for. If you work at Dell, and just act as a GC for yourself, you will not save much if any money, and most likely will gain some very expensive experience in the complexities of home building.

Teetorbilt

Ts, tell me about it! I just did my very last job (I swear) for a HO/C.

She is an old friend, has breast cancer, her husband has brain cancer and I just wanted to help out. But not on my buck. Screwed again.

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You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

K2

I'm with Zatol here. And the guy that thinks or tells me he can work a thousand hours a week will end up divorced, broke, in the hospital, and/or in the looney bin. And his kids will hate him... Examples upon request.

robertc65

I am not a builder and have not build my own house yet but I know a good bit about it. I have been reading forums like this and have followed very closely the building of many houses. I have also read a few of these so called owner builder books. It seems that the kind of people who are only saving 10% or less are just really not in a position to be building a house in the 1st place. Examples I have seen are say a husband and wife yuppie crew who have watched so much HGTV that they think they can build a house. Just because they can manage a project at work does not mean they can manage the building of a house. In my opinion to take on a project like this and expect to safe money you must meet the following basic requirements.

1. You must have close friends in some of the trades. (good connections)
2. You must know a lot about home building and I don't mean what you learn on HGTV.
3. You must have enough knowledge of Electrical, Plumbing, HVAC and all the other trades to be able to know if you are getting a fair price.
4 You must be very organized.
5. You must have the time to spend on the job site making sure things are going as planned.

These are just a few requirements and I'm sure there are a lot more. I don't think that many people out there who build there own houses are really prepared to be doing so. As a matter of fact I don't think that most builders I have seen should be building houses. Three people I know very well built their own houses. One is an electrician, one is a Plumber, and the other a concrete guy. All three of these guys had the knowledge and connections to build there own houses saving way more than 10%. Not only did they save a lot of money but they were able to control the quality and get a lot more for their money. I really think the 10% figure is way low primarily because many of the Owner builders simply not even close to being in a position to build a house.

Just one example here. If you are clean hands yuppie type who wants to build a house and has no connections you will be getting estimates from contractors who are going to charge you retail pricing. They may even charge you more because they know you will be a Pain in the A$$. If you don't know even the difference between 12/2 and 14/2 Romex or have not even heard the word Romex you are simply at the mercy of the electricians. What good is this. You may as well be at the Mercy of a GC.

bposkier

From bposkier,
To all responders
Well gentleman, I have read all of your comments and I thankyou for the response. The part about 10% margin though, I am a little surprised. Have you forgotten that in Austin, and other cities where the homes go up quickly in these sub-divisions, Im talkin 200 home projects, or 2500 home projects. There is a substantial investment in planning, grading the land, installing roads, major water and sewer work, electric power grid, lakes in some cases, park areas, swimming pools, recreation centers. All of this cost has to be woven into the finished price of the one home that I buy for say $160K.

Granted the GC has to keep his cost down. After all when you can order sheetrock by the trainload, you may get a substantial discount. At this level we are talking about large corporation contractors of course with deep pockets. All I know is that the GC guys I know make a substantial living and are living on the lake.

Regarding the knowledge I have of homes, I know what is going on although I have never built a house. I've built a garage and understand most of home construction. I do all my own repairs at home. electrical, plumbing, whatever needed. I am a handyman by trade. I believe that knowing what I know now I could lead a crew of subs and makes the decisions necessary. A good set of plans with all the details to get accurate bids are imperative. Better the plans, the more accurate the quotes. After all the knowledge of home building is what your subs are for. Getting at least 3 bids from each, which have references would be a good start. After you get 3 you have a sense of what it should cost and that one gouger will stand out.
I have a few buds that can look over my shoulder to review the various bids, and I would be glad to pay them. I would even hire an architect to work with me thru the process. Its strongly suggested to hire a lawyer that specializes in this kind of thing.
I would probably do the exterior painting myself on an all stone, 4 sides home. I would also do the tile work because both could be done quickly. I believe that at least 25% margin could very easily be accomplished. Every single GC had his first job, started somewhere, right.
The math: $160K at 1800 sf = $90/ ft X .75= $67.50 cost. Remember in this case, no roads, parks, pools, etc. Lot $30K. What do you think?

Donedat

I'm going to build my own home and I'm just a hardwood floor guy. The key is to plan ahead and communicate with your subs and make sure your subs get paid on time. Hold your subs to a schedule and make for certain you know what order the home is supposed to be built in so the hardwood guy is not getting run over by the painters and the plumber is not waiting for the cabinets and the finish carpenter is not having to do his work over newly finished floors.....

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cssconstruct

The 10%-15% margin is right on. We do not get rich off one house! If I built just one house a year I would go broke. What people are forgetting is that as the price of these homes have gone up, our costs have gone up also. A roll of romex that was $41 last year is $96 this year. After Katrina Osb was going for $25 a sheet here in Knox. Everybody thinks that builders have been making a killing on each house. That is just not true. Now we have sold more houses in the past couple of years, and that has led to increased profit, but my actual margin has gotten tighter. Back to your original question yes I could build my own house cheaper, but it is like joasis and others have said, I would have to use my own crews and use personal favors with the guys in the other trades to do it. just my 2 cents

Brushslingers

Sorry BP but they are right, the reason the "rich" contractors make more than 10% is the land, end of story.

You buy 150 acres at 1000 per acre, pay 40 G's for roads and sewers and sell each lot for 160 with a house on it, ya... thats more than 10%. Ever notice that the houses keep getting closer together?

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Benn

Donedat

Not to mention the general reduction in quality.

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I admit...I don't know everything...but don't tell my kids I told you.

Double-A

I think you're mixing up the economics of scale with the reality of building a one-off prototype.

Builders that go after tract homes are buying materials at a reduced rate than the smaller remodeling or building firms are able to. They are also able to move crews literally next door or down the block from job to job, as opposed to across town or 15 miles to the next town, so deployment costs are minimal.

You're also dealing with crews that build the same basic plans over and over. They may even be building only one plan. So they are a 'production' crew.

Any framer you hire to build for you will be building that plan for the first time. In other words, a prototype. He will have to stop and occasionally scratch his head to figure some stuff out, and to plan his work so that he doesn't clutter up his path to the next stage of work.

The GC's job gets harder yet. He's the one that had to order the framing package, after getting the forms built, concrete poured, and forms stripped so the framers could start. Before any of that could happen, someone had to get permits, soil tests, plot surveys, etc.

And that was the easy part, from here on in, you're dealing with more and more subs, doing more and more specialized work that need access to the site, room to work, and outlets to plug equipment in.

Its like the man said, if it were really that easy, every doctor and lawyer in town would be folding up shop to become a GC.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

joasis

There is another fact of life when building that makes a difference. As a GC, I have my own crews, and the subs I use for the mechanicals give me a great deal in return for being a loyal customer...I use the same subs all the time and when we do other projects, i call them, I don't shop their bids. So while I may pay $4.25 sq/ft to have my own spec homes wired, you will pay $6 for the same work...if you don't think that is right, consider it from their point of view: You will be a one time builder, there will not be another house to wire when they are done with this one. Same for the plumbing and HVAC, brickmason, etc. Now I am sure some guys on the forum will say they don't do this, but it is standard practice here...give and take...give me a decent deal and you get repeat business......

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