Design And Build Partnership Opportunity - Business - Contractor Talk

Design And Build Partnership Opportunity

 
Thread Tools Search this Thread Display Modes
Old 05-16-2019, 08:46 AM   #1
Registered User
 
Sideman87's Avatar
 
Trade: General
Join Date: May 2019
Posts: 1

Design And Build Partnership Opportunity


Hey guys new to the forum, I have a new architect who I’ve been working with recently. I’m a General contractor and have a small crew 4 guys, I’ve built a few home and done tons of higher end renovations.

The architect who is also a friend want to be a design and build firm but want to use my more as a subcontractor with a 5% kick back of the job. My thoughts on the initial offer are no way but it seems to be a large trend of customer preferring the design and build over just a GC.

Unfortunately he doesn’t understand how to be a good GC, hiring the cheapest subs, not loyal to the good ones, timelines off, doesn’t understand the building products being used and costs, doesn’t understand the insurance costs, etc. He needs someone with my experience to make it work but seem he doesn’t understand the value.

My main question is how are these type of partnerships usually structured? Should it be more of a 50/50 or should the build end be weighted in my favor? Would assume he is making a good profit on the plans.
Sideman87 is offline  

Warning: The topics covered on this site include activities in which there exists the potential for serious injury or death. ContractorTalk.com DOES NOT guarantee the accuracy or completeness of any information contained on this site. Always use proper safety precaution and reference reliable outside sources before attempting any construction or remodeling task!

   

Advertisement

 

Old 05-17-2019, 09:46 AM   #2
Pro
 
Fishindude's Avatar
 
Trade: Industrial
Join Date: Aug 2017
Location: Indiana
Posts: 441
Rewards Points: 942

Re: Design And Build Partnership Opportunity


Quote:
Originally Posted by Sideman87 View Post
Unfortunately he doesn’t understand how to be a good GC, hiring the cheapest subs, not loyal to the good ones, timelines off, doesn’t understand the building products being used and costs, doesn’t understand the insurance costs, etc. He needs someone with my experience to make it work but seem he doesn’t understand the value.
Somebody has to take the leadership role and it doesn't sound like this architect is the guy to do it.

Personally, as the builder I prefer to take the leadership role, be the one meeting with clients, manage the budget & schedule, hire the designer, hire and pay the subs, self perform what trades we want, etc.

Seems a lot of architects have sort of a "smarter than thou" attitude and can't accept working for the builder, listening to the advice of others, etc. Steer clear of those guys.

Advertisement

Fishindude is online now  
The Following User Says Thank You to Fishindude For This Useful Post:
Jaws (07-14-2019)
Old 07-04-2019, 01:10 PM   #3
Registered User
 
LuckyBeemer's Avatar
 
Trade: Paving
Join Date: Jul 2019
Location: Chicago
Posts: 1
Rewards Points: 2

Re: Design And Build Partnership Opportunity


A new Architect is not an experienced business owner. He needs to get a good track record as an Architect and then consider expanding into being a general contractor. The nature of a fututre partnership is premature. Besides an architect can be financially lucrative.
LuckyBeemer is offline  
Sponsored Links
Advertisement
 
Old 07-06-2019, 12:24 PM   #4
Member
 
SevenHills's Avatar
 
Trade: GC
Join Date: Jul 2015
Location: NW Montana
Posts: 41
Rewards Points: 92

Re: Design And Build Partnership Opportunity


Sounds like an iffy business partner to me. I'm not sure we'd be able to tell you the way to structure it without knowing who is bringing what to the table. For example, who is bringing in the client/jobs?
SevenHills is offline  
The Following User Says Thank You to SevenHills For This Useful Post:
Rio (07-06-2019)
Old 07-10-2019, 06:57 PM   #5
Member
 
MeanWeen's Avatar
 
Trade: City worker
Join Date: Nov 2017
Posts: 59
Rewards Points: 32

Re: Design And Build Partnership Opportunity


Design Build, IPD type projects are definitely the way the industry is heading but what he is offering is terrible for you. How can you expect him to design something you can make money on if doesn’t understand building methods or schedules?

If for some reason you need a partner, you want to be the majority owner or at least 50/50. You also better make sure your construction and design philosophies are 100% aligned or it will a very short lived venture.

Is there enough work in your area that can have both of you busy on the same projects at all times? If not what happens when you take on a job that has an Architect attached to it already, or vice versa?

I definitely believe that if both G.C. and Architects want to stay competitive it will be important to be able to deliver any project method the client wants in-house.

If you are a small sized company and you are looking to partner, both of you should be able to understand and design the project, estimate, manage trades, make schedules, interact with clients etc.

Partners are almost always way more expensive than employees, so the person better have something you really need.

Last edited by MeanWeen; 07-10-2019 at 07:01 PM.
MeanWeen is offline  
Old 07-11-2019, 05:01 AM   #6
Pro
 
Fouthgeneration's Avatar
 
Trade: Masonry
Join Date: Jan 2014
Location: Middle
Posts: 2,431
Rewards Points: 8,691

Re: Design And Build Partnership Opportunity


As the typical % a designer gets is in the 6% of gross range, a 5% "kickback" would almost double that share...

I don't think Leonardo Da Vinci got 11 % of the gross on ANYTHING...

Oh, and there is the going to Federal pen thing for bid rigging/ RICO Act..... Martha Stewart spent Six Months in CLub fed for LOSING over 500,000.00$ on insider trading, (actually lying to the FBI about it)

Good thing for the next several years your potential customers and the various authorities can see your immoral business ethics posted here online....

Love to see the General accepted accounting procedure for "Kickbacks"

Don't forget to file all the correct 1099sW-2s to avoid added time and penalties for failure to report income .....

Remember to set aside funds for fines, lawyers, bail bonds, and commissary money while doing time.

P.S. millions of quality buildings are designed and built with out any use of "professional" designers, Good luck making money paying double....
__________________
I might be an Idiot, but I know things that You don't: Please wait till after you get my know-how to insult me....

Last edited by Fouthgeneration; 07-11-2019 at 05:07 AM.
Fouthgeneration is offline  
Old 07-14-2019, 06:47 PM   #7
The Sheriff

 
Jaws's Avatar
 
Trade: GC
Join Date: Dec 2010
Location: Texas
Posts: 23,682
Rewards Points: 6,034

Re: Design And Build Partnership Opportunity


I go the other way - architect works for me, my name's on all plans.

Sent from my SM-N920V using Tapatalk
__________________
"The sound of the saftey clicking off is the only warning your gonna get......., so cover your ears" Northeast Wyoming 2016

John
Jaws is online now  
Old 07-14-2019, 06:49 PM   #8
The Sheriff

 
Jaws's Avatar
 
Trade: GC
Join Date: Dec 2010
Location: Texas
Posts: 23,682
Rewards Points: 6,034

Re: Design And Build Partnership Opportunity


Quote:
Originally Posted by Fishindude View Post
Somebody has to take the leadership role and it doesn't sound like this architect is the guy to do it.



Personally, as the builder I prefer to take the leadership role, be the one meeting with clients, manage the budget & schedule, hire the designer, hire and pay the subs, self perform what trades we want, etc.



Seems a lot of architects have sort of a "smarter than thou" attitude and can't accept working for the builder, listening to the advice of others, etc. Steer clear of those guys.
100%

Sent from my SM-N920V using Tapatalk
__________________
"The sound of the saftey clicking off is the only warning your gonna get......., so cover your ears" Northeast Wyoming 2016

John
Jaws is online now  
Old 07-14-2019, 07:32 PM   #9
Pro
 
KAP's Avatar
 
Trade: Custom
Join Date: Feb 2011
Posts: 11,380
Rewards Points: 35,396

Re: Design And Build Partnership Opportunity


Let's put it this way... you've just begun recently working with him, he's at 5% and you're at 50/50... and you haven't even BEGUN the myriad of intricate details involved in a partnership, never mind competing personal and business interests...

Not the best idea...
KAP is offline  
The Following User Says Thank You to KAP For This Useful Post:
FLsun (07-15-2019)
Old 07-14-2019, 07:37 PM   #10
The Sheriff

 
Jaws's Avatar
 
Trade: GC
Join Date: Dec 2010
Location: Texas
Posts: 23,682
Rewards Points: 6,034

Re: Design And Build Partnership Opportunity


Quote:
Originally Posted by KAP View Post
Let's put it this way... you've just begun recently working with him, he's at 5% and you're at 50/50... and you haven't even BEGUN the myriad of intricate details involved in a partnership, never mind competing personal and business interests...

Not the best idea...
Even worse, you got it wrong. Reread. The architect offered him 5% on top. LOL. Unless I'm mistaken

Sent from my SM-N920V using Tapatalk
__________________
"The sound of the saftey clicking off is the only warning your gonna get......., so cover your ears" Northeast Wyoming 2016

John
Jaws is online now  
Old 07-14-2019, 08:14 PM   #11
Pro
 
KAP's Avatar
 
Trade: Custom
Join Date: Feb 2011
Posts: 11,380
Rewards Points: 35,396

Re: Design And Build Partnership Opportunity


Quote:
Originally Posted by Jaws View Post
Even worse, you got it wrong. Reread. The architect offered him 5% on top. LOL. Unless I'm mistaken

Sent from my SM-N920V using Tapatalk
Nope... maybe you misread... the archi values his contribution in the form of a 5% kickback... he's thinking more 50/50...

Quote:
Originally Posted by Sideman87 View Post
...but want to use my more as a subcontractor with a 5% kick back of the job.

Should it be more of a 50/50 or should the build end be weighted in my favor? Would assume he is making a good profit on the plans.
KAP is offline  
Old 07-14-2019, 08:16 PM   #12
The Sheriff

 
Jaws's Avatar
 
Trade: GC
Join Date: Dec 2010
Location: Texas
Posts: 23,682
Rewards Points: 6,034

Re: Design And Build Partnership Opportunity


Quote:
Originally Posted by KAP View Post
Nope... maybe you misread... the archi values his contribution in the form of a 5% kickback... he's thinking more 50/50...
" he wants to use more in the form of a subcontractor with a 5% kickback"

He wants to pay the op 5% above his sub contract is how I read it

The op thinks 50/50

Sent from my SM-N920V using Tapatalk
__________________
"The sound of the saftey clicking off is the only warning your gonna get......., so cover your ears" Northeast Wyoming 2016

John
Jaws is online now  
Old 07-14-2019, 08:18 PM   #13
Pro
 
KAP's Avatar
 
Trade: Custom
Join Date: Feb 2011
Posts: 11,380
Rewards Points: 35,396

Re: Design And Build Partnership Opportunity


Quote:
Originally Posted by Jaws View Post
" he wants to use more in the form of a subcontractor with a 5% kickback"

He wants to pay the op 5% above his sub contract is how I read it

The op thinks 50/50

Sent from my SM-N920V using Tapatalk
Right... like I said...
Quote:
Originally Posted by KAP View Post
Let's put it this way... you've just begun recently working with him, he's at 5% and you're at 50/50...
KAP is offline  
Old 07-14-2019, 08:23 PM   #14
The Sheriff

 
Jaws's Avatar
 
Trade: GC
Join Date: Dec 2010
Location: Texas
Posts: 23,682
Rewards Points: 6,034

Re: Design And Build Partnership Opportunity


Quote:
Originally Posted by KAP View Post
Right... like I said...


Ah, we're on the same page then. I thought you were saying he was giving the architect 5%. Which would still be too high above design fees in my opinion

Sent from my SM-N920V using Tapatalk
__________________
"The sound of the saftey clicking off is the only warning your gonna get......., so cover your ears" Northeast Wyoming 2016

John
Jaws is online now  
Old 07-14-2019, 10:24 PM   #15
Pro
 
Fouthgeneration's Avatar
 
Trade: Masonry
Join Date: Jan 2014
Location: Middle
Posts: 2,431
Rewards Points: 8,691

Re: Design And Build Partnership Opportunity


Where does the 5 or whatever % get added to the total?

Under the GC ~cost +15% OH and profit so the designer gets six percent of total Of: ~=106% x 105% x 115% of GCs cost OR

Cut out of the GCs overhead and profit ? 15%-6%? Thus ~128% owner cost...

Total owner costs: = 106% x 115% x GC net costs. thus ~122 % mark up..

Traditional operations will Eat you up long run, IMHO

Unless the designer brings a lot of "sizzle" or lowers total costs instead raising them as most designers do.............
__________________
I might be an Idiot, but I know things that You don't: Please wait till after you get my know-how to insult me....
Fouthgeneration is offline  
Old 07-14-2019, 10:29 PM   #16
The Sheriff

 
Jaws's Avatar
 
Trade: GC
Join Date: Dec 2010
Location: Texas
Posts: 23,682
Rewards Points: 6,034

Re: Design And Build Partnership Opportunity


Quote:
Originally Posted by Fouthgeneration View Post
Where does the 5 or whatever % get added to the total?



Under the GC ~cost +15% OH and profit so the designer gets six percent of total Of: ~=106% x 105% x 115% of GCs cost OR



Cut out of the GCs overhead and profit ? 15%-6%? Thus ~128% owner cost...



Total owner costs: = 106% x 115% x GC net costs. thus ~122 % mark up..



Traditional operations will Eat you up long run, IMHO



Unless the designer brings a lot of "sizzle" or lowers total costs instead raising them as most designers do.............
Better be a nice sized project for 15%. + supervision and marked up in house labor

Sent from my SM-N920V using Tapatalk

Advertisement

__________________
"The sound of the saftey clicking off is the only warning your gonna get......., so cover your ears" Northeast Wyoming 2016

John
Jaws is online now  


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Join Now... It's Fast and FREE!

I am a professional contractor
I am a DIY Homeowner
Drywall Talk is for
PROFESSIONAL CONTRACTORS ONLY!

At DrywallTalk.com we cater exlusivly to professional contractors who make their living as a contractor. Knowing that many homeowners and DIYers are looking for a community to call home, we've created www.DIYChatroom.com DIY Chatroom is full of helpful advices and perfect for DIY homeowners.

Redirecing in 10 seconds
No Thanks
terms of service

Already Have an Account?