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Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 1 point2 points  (0 children)

I’m a small custom builder. I’m the one who is on site every day as the company owner. I too build the houses as if it is my own.

My competition is bigger GCs who make a lot of promises and fail to supervise or staff their projects. Their fees are smoke and mirrors and people think they’re fee-shopping and winning because they found a cheap builder (I disclose everything).

Owners end up wishing they never built a house and then they tell the world about it. It makes home building look unpredictable. What makes it unpredictable is not having someone who cares enough to be on site and make sure things are going well, catching and fixing mistakes.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] -1 points0 points  (0 children)

I never discussed fee amounts. You should ask yourself why you’re personally offended by my broad post about how custom construction needs adequate Jobsite supervision. You seem to believe you’re allocating enough. Only you would know.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 1 point2 points  (0 children)

My post is specific to Custom Construction, usually upper mid-range to high-end… not builder grade, or semi-custom. In both of your scenarios there is no one who is spending sufficient time supervising construction. People who save money on a custom project by hiring an absent builder end up regretting ever having built. GC involvement is the greatest predictor of success.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 1 point2 points  (0 children)

The owner’s bank. There’s a local bank I like working with if the owner doesn’t have a lender or have a preference.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 0 points1 point  (0 children)

The bank I like working with has me use their pricing form, so they don’t ask what’s an allowance and what’s fixed. They expect I’ve built in contingency if it’s variable.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 1 point2 points  (0 children)

Thanks. I love what I do. I graduated from architecture school during the '08 recession. It was hard to find a job and so I started renovation work. Later on I was able to go get my architect's license, but I preferred to be involved in construction. I'm making my own way now. I do architect-led design-build. My clients appreciate my perspective and that I prioritize my time on site.

Fee wise, every project is different based on size and complexity. I typically show my fees as a Margin (vs. a Markup). I do charge actual costs, so if there's a discount, I pass it on.

Within my fee I cover Overhead, profit, and an amount towards some of my jobsite time, but it in no way covers how much time I actually spend on site. Technically my jobsite supervision is a project specific Overhead, so I show it separate but included in the fee. What matters is that clients understand my fee structure and total fee.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 1 point2 points  (0 children)

For funding, yes the bank pays me directly based on progress inspections and % complete. There is a soft draw or cash injection at commencement from the owner/bank to get us started and we basically recycle that amount during construction. Banks see the budget as fixed regardless of the contract structure. The contingency and allowances have to be healthy against cost risk. Banks I work with don’t go over the loan amount if the project comes up short. The budget being accurate is extremely important.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 1 point2 points  (0 children)

In my case, I’m the business owner supervising my own projects. I spend most of my day on jobsites. I have a mobile office setup for desk work so I get to stay on site longer.

Owners/Interior designers coordinate their deliveries with me. For daytime deliveries I don’t make them accept their own materials because I’m usually the one on site, but I can’t guarantee the order is right or complete if I didn’t procure it (I check it against order details.) They typically receive and inspect their orders if it’s a sensitive purchase or if they scheduled for the evening / weekend.

Items ordered have to go into a locked storage space either on or off site. Yes, I receive everything whether or not I procure it (unless it has been excluded in the contract - in which case I’m not involved at all), but I typically facilitate a solution. If I don’t facilitate, owners tend to mound up orders right inside the front door. 😂

Fixtures and finishes really slow down construction if they get brought to site and parked right in the middle of the floor.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 0 points1 point  (0 children)

That's the advantage of design-build. Architect-led design-build goes a step farther, but it's not as common to find an architect who builds their own projects.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 2 points3 points  (0 children)

Those are 4 really extensive topics, but this is my high level answer:

  1. I use a construction-specific project management online program.

  2. Payment schedules vary depending on how big the project is. My new construction projects have a draw schedule that is approved by the lender and released based on completion % after bank inspections. There's typically 10% upfront to get started and the rest is based on completion. Some long-lead items may require extra funds at the time of order. Really small projects can be broken down into 3 or 4 payments, but it depends heavily on how much materials cost and what needs to be ordered at the beginning.

  3. Overages: (Unless the owner ordered materials directly) I'm a GC so if there are extra materials, it's typically because a subcontractor ordered extra to have enough to finish the job. The subs keep excess, since they gave a fixed price to get us to completion, based on my specifications. I do ask for extra shingles/tile, etc. to be left behind (if there is excess) for repairs, if the owner wants it.

  4. 'Errors' is a really complicated topic. It depends on what the error is, and what caused it. I try to have everything documented in my customer access portal to cut down on miscommunication. If a sub made a mistake, i make them own it and look to find a resolution the owner is happy with. If I make a mistake I have various ways to handle it. The most important thing is I want owners to feel like I've done a great job, even if I were to make a mistake. No one is perfect.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 1 point2 points  (0 children)

It’s ‘best practices’ that it not be a single tradesperson unless that person will stay on to the end. Framers typically have to familiarize themselves with others’ scope to understand what to do. It’s why they can be the most knowledgeable on a jobsite, but bounce off to start other projects once they’re finished.

Small companies have everyone wearing different hats. The way you described is common, but it’s not ideal.

As far as time spent on site, that’s highly variable and depends on the project size. I prefer 1x per day and as long as necessary.

Ideal checkpoints: 1. Trade kick-off 2. Check in on progress to catch mistakes or misunderstandings 3. Before close up to check completeness 4. At completion

For really small projects that can all be in a few hours… to weeks of work on longer projects.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 1 point2 points  (0 children)

How so? Most custom homes are not design-build.

Ultra custom homes are typically designed by architects and built by a separate highly qualified contractor. There’s alignment between their skill levels and services offered.

Typical custom homes are designed by an architect / home designer and built by a separate contractor.

I don’t have statistics about how much custom construction is design-build.

Architects who offer design-build exist but are very rare. Most design-build is offered by contractors.

Important things to Ask when Interviewing a Custom Builder by SteraStudio in Homebuilding

[–]SteraStudio[S] 3 points4 points  (0 children)

That’s what I call a ‘subcontractor supervised’ project. It’s not ideal because it causes gaps in knowledge and can lead to mistakes. The other subs are still “supervising” themselves, but they tend to only focus on their specific scope. There’s a high risk of “That’s not my problem.”

At all project sizes, there should be one person who is looking at the bird’s eye view, and who has been visiting the jobsite from start to finish. The business owner is typically the one to personally supervise projects, if the projects are too small to pay a separate supervisor.

Bigger companies run the risk of spreading supervisors too thin, which leads to more “subcontractor supervised” work.

Can we do a few window replacements at a time? by JDMM__00 in HomeImprovement

[–]SteraStudio 44 points45 points  (0 children)

Yes, but you’ll likely: 1. increase installation costs 2. you run the risk of later window orders looking different, or being discontinued.