Is 90% at substantial completion and 10% after frame punch typical?

Depends on what your def of substantial is. That’s a broad area. I’d never give anybody 90% 1st draw. Nor would I have balls enough to ask


Mike

 

I should have been more specific. Dried in and ready for trades equals 90% first draw. I think thats more than fair and enough skin in the game.

Knowing there may be a return for some blocking and frame punch after the trades leave, then receive final 10%.

 

90% at substantial is perfectly reasonable, as long as you can define "substantial". Hopefully, you have a couple of draws prior to that, to minimize your risk.

 

Thank you for the feedback! Yeah that what I am kind of after. What are Framers looking for in regards to a draw schedule from a GC. And visa versa.

I've been seeing a 90/10 model I described pretty often around here. But this is typically 7- 10 day frame jobs up to 3000SF. So the Framer hasn't laid out too much and he's only bringing OH, Labor and Nails.

 

Wouldn't you do like 30 percent at start, 30 percent half way, 30 at substantial completion and then 10 percent when ready for drywall, siding, etc.? Or some semblance of that?

Gotta have some cashflow.

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Nobody gets money up front for framing. Only materials are nails, and generally crane fees, so no way should anybody get money to start.

On smaller homes, we got 50 percent on roof completion, then balance at completion. Just a trust thing to come back and punch out some littles.

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Never heard of a framer getting front money. Exception being provides materials. OP you talking track shacks. Those 10%’s ain’t coming back if they have 30’ foyers to plumb or RV covers 30’ high to plumb up & block in. Not to mention men waiting on a hot shot load. But then you’ve got your “ There’s material down the street “ thinking they will get somebody to pack snake bracing.

Mike

 

This is an example of draw schedule I recently used on a $200,000 frame contract with percentages paid:

10%​	Framing House - 1st Floor: Walls and Headers
8%​	Framing House - 1st Floor: Trusses & Subfloor
9%​	Framing House - 2nd Floor: Walls and Headers
7%​	Framing House - 2nd Floor: Ceiling Joists
10%​	Framing House - Rafters Installed & Braced
4%​	Framing House 1st Floor: Sheathing and Shear Walls
4%​	Framing House 2nd Floor: Sheathing and Shear Walls
2%​	Framing House - Tyvek Completed
10%​	Decking Installed
8%​	Siding completed
2%​	Arches, Fur Downs, Interior Complete
6%​	Windows Installed
4%​	Doors Installed
3%​	Porch Ceilings
3%​	Cornice Completed
3%​	Framing Inspection
7%​	Punchout Completed

 

70% when you pass my framing inspection.
20% when you pass municipalities frame inspection.
10% when you complete final punch list.

 

We usually do 30% at floor cap, 30% at second floor cap, 30% start of trusses. 10% at completion.

If they won't go for that we normally won't bother working for them.

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If teaching an out of College super what & how the prints read, price goes up if I’m not framing in house. Waiting on an engineer might throw a curve in there as well.

Mike

 

Yea, this will be region lesson of the month


Mike

 

Is this a remodel or new construction? Your payment schedule will be different depending on which one. Remodels are harder to lay out a payment schedule. For example you wouldn't want to say 'payment upon final framing inspection'. If it's a remodel, you can have a failed framing inspection on something existing that you had nothing to do with.

 

Okay, well the backstory... is I am starting a Framing company. I have made connections with several high end builders (20+) through custom cabinetry work. And I have built relationships with several very good Framers as well through my current position in semi- custom, "on- your lot" project management. I am going to meld the two. (Yes "labor pimp".) But I will provide all primary licensure, insurances, nails, crane and on-site management services through the dry- in phase.

I have been asked to start a Framing crew specifically by several custom builders. And continue seeing the need for getting homes framed and dried- in, in a timely fashion. I'm going to attempt to fill that void.

The primary builds I will be delving into will be new construction. About 30% will be 1500- 3000SF houses and towns. 60% will be 3000SF upwards to 10000SF builds. Leaving 10% for super high end additions.

Obvioulsy the draw schedules would vary wildly depending on the type, size, complexity of the projects. Just trying to get a temperature of what others and seeing/ using. As far as region goes, I'm in the SE.

Thanks so far, a lot of fantastic information.

 

Okay, well the backstory... is I am starting a Framing company. I have made connections with several high end builders (20+) through custom cabinetry work. And I have built relationships with several very good Framers as well through my current position in semi- custom, "on- your lot" project management. I am going to meld the two. (Yes "labor pimp".) But I will provide all primary licensure, insurances, nails, crane and on-site management services through the dry- in phase.

I have been asked to start a Framing crew specifically by several custom builders. And continue seeing the need for getting homes framed and dried- in, in a timely fashion. I'm going to attempt to fill that void.

The primary builds I will be delving into will be new construction. About 30% will be 1500- 3000SF houses and towns. 60% will be 3000SF upwards to 10000SF builds. Leaving 10% for super high end additions.

Obvioulsy the draw schedules would vary wildly depending on the type, size, complexity of the projects. Just trying to get a temperature of what others and seeing/ using. As far as region goes, I'm in the SE.

Thanks so far, a lot of fantastic information.

If you don't have the experience in any kind of production framing or custom framing work then I'd say you are diving into some hot water. There are a ton of things that can kill your business and bank account as a framing contractor. What if you frame a house, the superintendent checks it over, says great, nice work and sends you off to the next one. Then three weeks later there's a big gouge on your fascia board that you know you didn't do so one of the other trades must have damaged it. Are you going to pay him for that? Meaning use your own labor to fix it? Or will you tell him it's not your fault then write up a bid for the repairs? What if he disagrees and says you're not getting paid on your current job until this is fixed, and claims it's on your dime? Then what if he keeps doing this over and over and it digs into your profits, or puts you into negative profits? Is the superintendent on the same page as you are with this? Is any of it spelled out in your contract?

That's just one example of the dozens or even hundreds of things that can come up running a framing business. Your payment schedule is important too, good call on that. But if you don't have the hands on experience, I can't see how you would be able to foretell what could go wrong and the steps you need to prevent it. Framing is a very risky business to get into, maybe that's why these builders want you to do it, they can't find anyone else crazy enough to try.

It's your call if you want to take on the risk but ask yourself a few questions. You say you have some experienced framers to help you, great but if they knew enough to run a business then why aren't they running their own business? Do you have a healthy bank account to cover mistakes so you don't have to look into bankruptcy? Or do you plan on everything working flawlessly when it's your first jab at this sort of thing and you have little experience in it? Is your bank account large enough to handle payroll at the start of the job? As you may have found from the posts in this thread, not many custom home builders will give their framer an upfront payment. Are you going to tell your employees to wait a month for their paycheck? Can they do that? Want to know how many times I've hired framers then they tell me they can't even afford gas to get home? Then I have guys surrounding me on the jobsite asking for a cash advance from my wallet. Might want to bury your cash in your back yard before you do this. Don't mean to be cynical but just speaking from experience.

 

So... your not a framer


Mike

 

No sir! I wouldn't say I am a "framer". Although I have personally been the lead on the framing of dozens of new homes, garages and additions. Been the GC on a hundred. And been the Super/ PM on at least 500 homes when I was a youngin'. With a ton of engineering and project management experience in between. Pretty well versed for this role. Just trying to have a more specific business model. Like I said been a GC before. I am looking to streamline things.

 

I would stay away from the smaller builds & focus on the larger customs. Unless of course your goal is volume & you have the labor handy. Rate hikes are already squeezing the smaller stuff down in central Tx. As we head to double digits, that market will be dead. My builds are high ranking military & big Ag. Retired agents on Comm. All built on a 30 year relationship w/my banker that knows a lot of people. Sounds like you have some good connects as well. Best to you on your business


Mike

 

You better give me some money if you want to get on my calendar then we can negotiate draw!

 

I rarely sub framing, I bill small frames (under 5k ft tca) in 3 increments usually, I don't place in the contract so when I feel like billing it, but usually I bill after we start sheeting, then when it's substantial and last when cornice is complete, specials done and its inspected and MEPs are rolling. Bigger frames in as many draws as makes sense, the big house we got going will end up being 5 draws probably.

My framer bills how it makes sense to him for that job, usually 2 draws if it's small, 3 or 4 at most. If he's there for a fee months like a remodel/addition/ full reno, windows replacement etc he bills by the day pretry much for his crew and I get a bill every couple weeks.

The only framers I've ever contracted to are a guy I worked for whose a total pro or another pro who I came up in the trades with. I trust them - but no deposit for framing. Dude could get hit by a truck and leave me 10s of thousands in the hole

I'm pretry laid back with subs who've been on the team a long time - if they are in weird circumstances I've been known to make some overpayments and even deposits I wouldn't normally, it's my risk though, and it's like laoning money. Would not recommend that route

 

Note : for a contractor that’s feeding me a lot of work he gets on my calendar and sometimes the head of the line if he’s in a pinch.

 

On large customs here, we can take anywhere from 6 weeks to 3 months
everything hand cut
we will draw once a month , with the balance on completion
‘no one we work for does any hold backs for passing inspections- we typically pass them, and if we don’t we’re prompt in addressing any issues

 

In framing contracts, payment schedules can vary depending on the agreement you have with your client. The 90% payment at substantial completion with the remaining 10% after frame punch is a common arrangement to make sure the work is done satisfactorily. It's important to document these milestones clearly in your contract to avoid payment disputes later on.
If you're not sure about legal aspects or need advice on structuring contracts, consider consulting lawyers like those at https://www.caddellreynolds.com/arkansas-bankruptcy-attorney/. They specialize in these matters.

 

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Lennystink, are you a robot?

 

of course he is!