being your own general contractor

[zach477]

I know this was brought up awhile back but it turned more into an argument than a discussion. We are thinking of building, I think with the current interest rates, materials cost, ample lots for sale in my area dropping in price monthly, and a lot of trades being slower with the recession, it’s a good time to get into a new home. With that being said, there are a lot of nice homes on the market that are only a year or two old that are priced at or below what you can build for. I would like to build because I can tailor the home to my exact desire, but if I can’t build for the same price that I can buy, I will save myself the time and just buy. So right now I am looking for ways to build for the same cost as I can buy. With a general contractor involved, I am still able to do electrical start to finish (brother is a licensed electrician) and I think I will take the home over with basically the interior as a shell. What I mean by that is everything finished with the exception of flooring, cabinet install, millwork, appliances, and fixtures. My guess is if I go that route with a general involved, I will be about $10/ sf over budget (basing my “budget” off current similar homes market price).


The home will be a ranch with about 1600 sf main level, and one thought to get me down $10 a sf would be to cut out the general contractor. I have a great excavating, foundation, and flatwork guy I know well that I can trust, my brother being an electrician has some great plumbing and HVAC contacts, and I graduated HS with 2 good friends that now both own framing companies. Really the only trade I don’t have good referrals for is drywall, but I know a number of guys in the industry that could give me a list of names. I finished the basement of my current home so know what codes violations to look out for and can spot a crappy job. I also have an engineering degree but now manage an engineering team so I have both a technical and management mind set.


So my question is, will I save any money cutting the general out? I know that if I don’t use the general I will have to carry my own construction insurance/loan throughout the project, catching any mistakes falls on my shoulders, ect, ect. I also know that a general is going to get his trades and materials for a lower price than I am going to be able to. I would assume a general is going to tack that construction loan/insurance cost into their sf price, so does the discount that they get the material and labor for add up to the % of the project that goes in their pocket? I am in the process of getting quotes on my plans from 3 different builders. My next step is getting those same quotes privately, but any insight would be appreciated.

 

[rockdog2112]

Being your own GC is very time consuming. I was my own when we built our house starting in 2006. The big money savings will come in the work you do yourself. I worked for a GC for almost 20 years so I had many of the skills and tools necessary to do the job. I did almost everything. I was also smart enough to know what NOT to do. I had my foundation and excavation done, rough plumbing(I knew little or nothing about the codes), shingles and sheet rock. It took me a year but was worth it even paying the interest on the construction loan. I did my own electrical, framing, heating, masonary, finish plumbing, trim work....ect, and had to pass the inspections that go with each task. It was alot of work. If you are going to act as you're own GC and Qc(quality control) you have to know what to look for in the work that's being done or you might sign off on shoddy or imcomplete work. It might be beneficial to hire a const. manager to oversee your project if you are not confident in your own ablities. Some banks may require it from what I've heard. My bank wanted me to show that I was proficient as a builder before they would okay my loan. They came out and inspected a 30x50 shop I had built on the property and were satified.
I know this doesnt really answer your question but right now butying something might be alot cheaper than having something built unless you can do ALOT of the work. As for your risk insurance, I got mine through State Farm and it wasn't that expensive.
For all the SW naysayers, this is my own opinion but it is based on my experience of having been through the process from beginning to end.
Good luck Zach. No matter which way you go, it's a journey that will either kill you or make you tough as nails but you'll remember it forever. lol

 

[sledcolo]

I've built 2 homes and it is rewarding, but you need a flexible scehdule and be able to visit the project daily. Late nights and long weekends can strain relationships.
I would be up-side down on my house if I hadn't built it myself.
I wouldn't do it if you can buy as much or more than you could build.

 

[rockdog2112]

I've built 2 homes and it is rewarding, but you need a flexible scehdule and be able to visit the project daily. Late nights and long weekends can strain relationships.
I would be up-side down on my house if I hadn't built it myself.
I wouldn't do it if you can buy as much or more than you could build.

Agreed. Sure is nice to pull up every night and see the results of a lot of hard work.

 

[knzee]

Just make sure that all your "friends" are on the same page. You are going to be asking them to work for you for less money or no money after hours and on the weekend. I have helped some friends/family with wiring and a couple times it was more of a pain in the azz then you would think.

 

[xrated]

I would NEVER be my own GC.

If you are and things go bad or you have issues with a sub you have nobody to go to but yourself and nobody to hold responsible.

 

[Mjunkie]

I worked for about 10 years at 3 different lumber yards. I sold lumber, doors, windows, finish trim and hardware during those years. I hate to admit this but the Joe Blow off the street building a house would almost always get the same price as the contractor who built 10 homes a month, for the simple fact that there is very little mark up to begin with because the industry is so cut throat, and business at a lower profit margin is A LOT better than no business. So what I'm saying is that a GC isn't going to get a better price than you on those items I mentioned. It's not fair to the GC's out there but it's reality. The "so called" contractor discount is almost always given to everyone just because all lumber yards want you to come back to their store to buy more. Just something else you shouldn't worry about as far as a GC getting a better price on materials than you. If that is the case with other things you'll have to buy I don't know, but I know it is true with the things I talked about.

 

[dmkhnr]

You have to think about resell value as well.
I can ALWAYS tell a home that was built by an owner builder. (Not that there is anything wrong with owner builder).
Building a home involves alot of forsight which only comes with experience. Usually mistakes can be fixed, some just cost money, some require design alterations, some require engineering.
If I read your original thread correctly, your talking about $16k and if thats all it is going to cost to have a professional run your project it will be money well spent.
Getting the home out of the ground is the most complicated part of the project. Once the foundo is complete the project will roll along, however knowledge of how things finish, (garage door openings, door casing, window jamb, different elevations between floors tile,wood,carpet and the baseboard finish, straight walls and how drywall will plane in, and the list goes on and on with things you wouldn't even think about.
Usually an owner builder can figure this stuff out during the project, but knowing about these things Vs learning about these things always results in a different outcome.

 

[niles]

I am a contractor in your area and i say go for it if you have the time. You will get the same price on materials and such as a contractor but i dont think you will get the same customer service. Not a big deal. If you have a good well known contractor all of his subs are used to working together and that helps alot. They dont give the run around making excuses or blaming setbacks or mistakes on someone else.