GC: Average Total Labor Cost on New Build
Lender · rate.bid · Member since 2022 · 324 posts · 62 votes
Question for the GC's out there... in markets such as Charlotte, Nashville, New Orleans, Orlando etc (Southeast), what would most GC's quote as a ballpark estimate for total labor cost (if owner is supplying all building materials) on a 1500-1800 sf new build. If contingent on actual floor plan, send a PM.
Held hostage ? Price gouging schemes ? I dont think you know how a contracting business is run , the intent is to make a profit . Everything a contractor does has a mark up on it .
But I guess you are the guy who brings his own steak to a restaurant and asks how much just to cook and serve it ?
I have been in the contracting business 35 years , and the ONLY contractors that work without supplying materials do piece work for track builders . They dont leave a jobsite for years . If you have that much work , you could find subs for that , but not a GC .
Either way you go , the GC and the subs are still going to make the same amount of money in the end . You wont save anything . Probably will cost you more . And if you supply materials , you get no warranty .
Speaking as a long-time GC, I would never consider taking on a project where the owner was in charge of all the building materials. Why are you doing this? Do you think you're going to save money and/or time?
Who is going to do the lumber take-off? The electrical? The plumbing? With all due respect, you have zero chance of getting this right (unless I missed something and you're an experienced GC?)
There are going to be mistakes and delays by the dozens.....
Sounds like a personal problem. Owner doesn't have to explain why they are deciding to supply the materials. You know nothing about the project to be rambling about project success. Mistakes & Delays = Zero!
@Frank Greg, Easy buddy. You had asked and Bruce was simply offering his opinion. No need to take offense we are all in this together. If you have experience in this type of matter its as easy as stating. If not, consider the many little and unique details. Its more than constructing four walls, a kitchen, and a couple of sinks. Do you know the difference between framing, siding, roofing, flooring, and wallboard nails as an example? What about nails vs screws? Gaskets and hangers for plumbing? Type of junction boxes for electrical and connectors? Just a small list of examples. Sorry this is not the answer you wanted. Good luck with your project!
I doubt you will find a GC to do what you want , because he wont find any subs that will work as labor only . The electrician , plumber , HVAC , concrete , contractors ALL mark up their materials . Thats how you run a business .
Now if you are talking building a whole developement of 180 or so homes , you have some leverage and economy of scale . If you are talking spot lots building one here and maybe one there . To a GC you are nothing more than the average customer .
Speaking for the Nashville market here.
I don't know what labor cost is alone on a full build as I've never done a labor only build. The GC fee for a standard build is going to range from 18-35k depending on the builder per house. Custom builds are going to run a GC fee between 80-150k.
In terms of buying materials, there are several cases where I do this and other cases where I wont.
My framer can order lumber and I just go pay for it. I can buy tile, light fixtures, bathroom fixtures, drywall, paint, primer. Basically finishing materials if you will.
I can't really buy plumbing, electrical, hvac materials because there is going to be a fitting or part that they need that probably at some point will get missed.
I have purchased materials before and contractors refused to use them, typically due to poor quality. A painter once refused to use the paint I purchased because it would require more coats than the paint he normally gets.
I had a plumber refuse to use supply valves because he couldn't verify that they were new and so if there was a leak he couldn't warrant the work.
That sort of stuff....
I just don't know that you can find a GC that is going to run a full labor only cost on a ground up new build.
Speaking for the Nashville market here.
I don't know what labor cost is alone on a full build as I've never done a labor only build. The GC fee for a standard build is going to range from 18-35k depending on the builder per house. Custom builds are going to run a GC fee between 80-150k.
In terms of buying materials, there are several cases where I do this and other cases where I wont.
My framer can order lumber and I just go pay for it. I can buy tile, light fixtures, bathroom fixtures, drywall, paint, primer. Basically finishing materials if you will.
I can't really buy plumbing, electrical, hvac materials because there is going to be a fitting or part that they need that probably at some point will get missed.
I have purchased materials before and contractors refused to use them, typically due to poor quality. A painter once refused to use the paint I purchased because it would require more coats than the paint he normally gets.
I had a plumber refuse to use supply valves because he couldn't verify that they were new and so if there was a leak he couldn't warrant the work.
That sort of stuff....
I just don't know that you can find a GC that is going to run a full labor only cost on a ground up new build.
Thats not an opinion. If the owner wants to supply materials its his right. And I dont have to tolerate someone with no clue of what a project is about starting to offer useless forecastings about success rates. Your concern as a contractor is also not about if the owner has a PhD in construction so it not clear what these quiz is about. You worry about your bid. Contractors executed contract with owner says owner has responsibility to supply all materials.
I doubt you will find a GC to do what you want , because he wont find any subs that will work as labor only . The electrician , plumber , HVAC , concrete , contractors ALL mark up their materials . Thats how you run a business .
Now if you are talking building a whole developement of 180 or so homes , you have some leverage and economy of scale . If you are talking spot lots building one here and maybe one there . To a GC you are nothing more than the average customer .
I am not aware of any state with a law that coerces the owner to be held hostage to markups and materials price gouging schemes dictated by the contractor. If you are saying that you are a GC and can provide a labor only quote if developing multiple lots, then send a message. If not, we dont really need to get into petty trivial debates or negativity and are not influenced by that.
Held hostage ? Price gouging schemes ? I dont think you know how a contracting business is run , the intent is to make a profit . Everything a contractor does has a mark up on it .
But I guess you are the guy who brings his own steak to a restaurant and asks how much just to cook and serve it ?
I have been in the contracting business 35 years , and the ONLY contractors that work without supplying materials do piece work for track builders . They dont leave a jobsite for years . If you have that much work , you could find subs for that , but not a GC .
Either way you go , the GC and the subs are still going to make the same amount of money in the end . You wont save anything . Probably will cost you more . And if you supply materials , you get no warranty .
Held hostage ? Price gouging schemes ? I dont think you know how a contracting business is run , the intent is to make a profit . Everything a contractor does has a mark up on it .
But I guess you are the guy who brings his own steak to a restaurant and asks how much just to cook and serve it ?
I have been in the contracting business 35 years , and the ONLY contractors that work without supplying materials do piece work for track builders . They dont leave a jobsite for years . If you have that much work , you could find subs for that , but not a GC .
Either way you go , the GC and the subs are still going to make the same amount of money in the end . You wont save anything . Probably will cost you more . And if you supply materials , you get no warranty .
I'll take mine medium rare, please. And you obviously understand how this works. I used to love the clients that would want to buy the windows/doors, lumber package, etc. Not that I would allow that anyway, but I would start down the road just for fun....
"So, Mr Smith, in addition to doing plan take-offs and making sure the window schedule is correct, you're going to go sit with your supplier for a couple hours and go over details? And then meet the trucks on delivery day and take responsibility for counting, measuring, signing for the materials? And then of course you'll unload everything and store in a safe place, right? And if anything goes missing or is the wrong size, or damaged, that's all on you, and you'll take care of it right?" Oh, and make sure you have Workers Comp on the guys you hire to help unload.
Ahahaha, after they got done realizing what was going on I never heard another peep.....
Got my first license in '83, all these years I never realized I was a hostage-taking price-gouger......Damn.
Worked for Lennar, been a contractor. If I gave you a range of $25 -85 and told you it depends on the specific trade, location, type of construction, density, number of stories...
Knowing the costs of all the pieces is useful, but is a moving target. Do you have a secure site to store everything? Will you hand out each piece to contractors?
Got my first license in '83, all these years I never realized I was a hostage-taking price-gouger......Damn.
This just might be the problem. Probably also use one of these still to type a quote don't you? http://shorturl.at/gitwN
Worked for Lennar, been a contractor. If I gave you a range of $25 -85 and told you it depends on the specific trade, location, type of construction, density, number of stories...
Knowing the costs of all the pieces is useful, but is a moving target. Do you have a secure site to store everything? Will you hand out each piece to contractors?
They literally have all materials available on site. If you know of a contractor who can work on a labor only basis, you can send a message to discuss off here.
I think this is an issue of a conflict of interest. Maybe we don't have to use a contractor in the markup business but rather hire a "project manager" who holds a GC license or just licensed subs to do their part since we are supplying all the materials.
Contrary to your line of thinking here, instead of having the restaurant buy your steak for you or taking steak to the restaurant to have it cooked (for a markup), some might think its better if you bought and cooked your own steak.
It does seem in some of the states, you can act as your contractor on a single build or your primary residence; so it would appear if someone can handle the travel between 50+ cities, may not necessarily need a markup GC.
Not sure about your projects but we have warranty on our materials and as a builder, you have to provide warranty to the customer.
@Frank Greg Contracting is a business that provides a finished product . Contractors are NOT a company that provides skilled labor for hourly wages . There is no conflict of interest marking up your materials and subs , its good business .
You could hire a project manager and source your own subs . But when you ask that PM to find subs , they will make money on the front end or the back end , they wont provide their relationships for free .
Contracting is more about relationships than the work . The GC , the suppliers ,and the subs have working relationships . We all make money , good money at that . Those relationships do not extend to the customer . Money is the fuel that keeps the machine running . High performance contractors run on premium gasoline , and they dont run on empty .
@Frank Greg, Matthew is right...and you probably are on the wrong track looking for a GC. A Project Manager would do, and he may not even need a license. Or why don't you just manage the project yourself if you really want to save $$..?
But I've known hundreds of GCs and not one of them would be interested in doing your deal...I mean why would they? You'd have to pay them a fortune and that's what you don't want to do....
Without getting too technical here, most general contractors actually incorporate and provide their services through an entity operating as a business or company of some sort.. so its not clear what your initial point is. Not aware of a client that would award a contractor operating as an individual a major project with the contractor exposed to tons of personal liability.
The conflict arises because most general contractors, are used to being retained to source for both materials and labor for the client. When you have a client who already has the materials then the client can only retain the contractor to source for labor and quite frankly, I don't see a problem with the client sourcing for project labor here ( whether specialized or unspecialized).
The intent of the post was to get ball park estimates on labor. It is clear the client here is better off handling both materials and labor sourcing himself.
In some of the states contemplated for the project, the law seems to suggest you can only build anywhere from 1 to 4 number of homes as an unlicensed owner builder during a span of 1 or 2 years (sometimes more) and without a general contractor; so the client in this case is not retaining a general contractor because they have some problem sourcing for materials or labor. The client has to be able to develop an unlimited amount of homes during any fiscal period which apparently requires retaining a general contractor to 'supervise' the work or act a project manager.
In case something still isnt clear, client does not have some sort of challenge with materials sourcing nor do I foresee an issue with sourcing for labor hence the 'relatinships' you reference does not particularly provide any value for this particular client in this specific instance.
Its not about saving money.. that just happens to be the coincidental effect of sourcing for your own materials and labor. Its about removing the restriction on number of builds in any year. This is not about what the contractor prefers or wants!
Now you're just being confusing. Just hire a GC and be done with it......solves all your problems and creates no issues. Done. You're welcome.
Just gonna chime in here since I couldn't ignore the subtext of the paragraph above. I could be reading this wrong, but the way this is phrased kind of implies you're only seeking a GC to act as a proxy while you (or your client? I'm not clear on that relationship) performs the materials sourcing and labor sourcing (i.e. subcontracting) which usually fall under the care of a license/bonded/insured GC in order to circumvent the limits that are placed on unlicensed owner-builders.
If this is the case, you're going to be walking a very fine line between what you're legally allowed to do as an unlicensed entity, even if a GC does agree to put their name on the permits. I think @Bruce Woodruff and @Matthew Paul have already done a good job explaining why this isn't a good idea and why most, if not all, GCs will not be interested in participating.
In an attempt to answer your original question, according to GlassDoor the average annual pay for a construction PM (sounds like that's more or less what you're looking for?) is about $130k, or $63/hr, which sounds about right to me. Expect to pay even more if you're hiring them as a contractor/consultant rather than an employee. How many hours it takes is going to depend entirely on the details of the project and how well all of the players involved (including you and your client) work together.
If you're really trying to do this at scale and build "unlimited" houses, ditch the bring-your-own-materials plan and start building excellent relationships with contractors, subcontractors, and govt. building departments in the areas you want to build. That way all you do is watch other people do the heavy lifting while you cash the big checks.
Finding a general contractor for the contemplated scope of work is not a problem. The client who is the developer and owner can obtain whatever permit necessary. You guys keep talking about relationships but the client is deciding to get his materials because he has better pricing. I understand why most general contractors would likely find this threatening. Not sugesting everyone has to build without a general contractor. The client here just happens to know what he is doing.
This shows your complete lack of understanding about the subject. It is not 'threatening'. It is completely outside the scope of what we typically do. It lessens our overall control substantially and thereby increases our liability for the project(s). It is not about the money much if at all.
As the other guys have said, you really just need a Project Manager.
You are obviouly just trying to be argumentative and somewhat belligerent. Relieving a general contractor of materials sourcing and possibly also subcontractor sourcing lessens your control but is "out of scope"? The developer or owner pulls permit and has responsibility for the project. For a project this size, a general contractor is easily a $10 million expense if you get stuck with a greasy GC. Most builders operate with thin profit margins for the level of risk taken so it can be about the money.
Well, good luck with your search....
@Frank Greg Sounds like you are looking for an employee , not a GC . You can control your employee .