Anyone really interested in construction??
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
Anyone really interested in construction??
Most Popular Reply
Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
14yI think this thread has done a great job outlining the basic steps needed to build a house. It has also shown great examples of the potential profits available in spec home building. I would caution anyone who is considering building their first spec home to do your homework. Unless you are a GC, you probably don't want to start two new businesses at the same time. One business being spec home building and the other being General Contracting.
Here is a more detailed list of construction items you will have to consider when building a new home. I believe somewhere in this thread, absorption rate was mentioned and that could be the most important statistic to know. Just like a flip, you need to have multiple exit strategies for a spec home.
This list was poached from contractortalk.com
House/with attached Garage
General Conditions
Finalize plans and develop estimate with owner, architect
Sign contract and notice to proceed
Apply for Permits
Secure foundation permit
Secure framing permit
Secure electrical permit
Secure plumbing permit
Secure HVAC permit
Secure miscellaneous permits
Site Work
Clear and grub lot
Excavator estimated houly
Skid steer estimated hourly
Trucking estimated hourly
Topsoil stripping
Skid steer estimated hourly
Trucking estimated hourly
Pavement and sidewalk removal
Skid steer estimated hourly
Trucking estimated hourly
Rough grading
Skid steer estimated hourly
Relocation of existing natural drainage
Excavator estimated houly
Skid steer estimated hourly
Removal of unsuitable soil
Skid steer estimated hourly
Trucking estimated hourly
Access roads
Skid steer estimated hourly
Trucking estimated hourly
Detours
Protection of existing structures and utilities
Environmental considerations
Install temporary power service
Install underground utilities
Foundation
Locate building
Survey
Install batter boards
Excavate for foundations
Excavator estimated houly
Drilling for garage piles
Skid steer estimated hourly
Trucking estimated hourly
Forming
Footings
Total lineal feet of footing
Total width of footing
Total thickness of footings
Total cubic meters of footings
Foundations walls
Total lineal feet of walls
Total width of walls
Total height of walls
Total cubic meters of walls
Grade beams
Total lineal feet of beam
Total width of beam
Total height of beam
Total number of 12"x12' concrete pile
Total cubic meters of beams and piles
Cure basement walls for 7 days
Strip basement wall forms
Waterproof/insulate basement walls
Perform foundation inspection
Backfill foundation
Skid steer estimated hourly
Framing house and attached garge
Install 1st floor joists
Mud sill achor bolts
Sill gasket
2x6 Treated mud sill
2x10 Spruce 4 ply beam
3" Adjustable steel telepost
2x10 Spruce joisting
2x10 Spruce rim joists
2x2 bridging
Single joist hangers/nails
Double joist hangers/nails
3 1/4" coated nails
Lay 1st floor decking
3/4" T&G Fir sheating
1 1/2" flooring screws
Sub-floor adhesive
Frame 1st floor walls
Exterior walls
Top, bottom and cap plates 2x6 spruce
2x6 spruce studs 92 5/8"
3/8" spruce sheathing
2x10 spruce 2 ply header with 2x6 backer
2x6 garge door rough frame and Brick moulding
3 1/4" coated nails
1 1/2" sheathing staple
House wrap (Tyvek) and tape
3/8" house wrap staples
Interior walls
Top, bottom and cap plates 2x4 spruce
2x4 spruce studs 92 5/8"
2x4 spruce single plate door header
Plumbing wall
Top, bottom and cap plates 2x6 spruce
2x6 spruce studs 92 5/8"
3 1/4" coated nails
Cap plate and exterior wall backing poly flashing
2x10 Spruce 4 ply beam
2x6 drywall backing
Install 2nd floor joists
2x10 Spruce joisting
2x10 Spruce rim joists
2x2 bridging
Single joist hangers/nails
Double joist hangers/nails
3 1/4" coated nails
Lay 2nd floor decking
3/4" T&G Fir sheating
1 1/2" flooring screws
Sub-floor adhesive
Frame 2nd floor walls
Exterior walls
Top, bottom and cap plates 2x6 spruce
2x6 spruce studs 92 5/8"
3/8" spruce sheathing
2x10 spruce 2 ply header with 2x6 backer
3 1/4" coated nails
1 1/2" sheathing staple
House wrap (Tyvek) and tape
3/8" house wrap staples
Interior walls
Top, bottom and cap plates 2x4 spruce
2x4 spruce studs 92 5/8"
2x4 spruce single plate door header
Plumbing wall
Top, bottom and cap plates 2x6 spruce
2x6 spruce studs 92 5/8"
3 1/4" coated nails
Cap plate and exterior wall backing poly flashing
2x10 Spruce 4 ply beam
2x6 drywall backing
Interior stairs and landings
Complete roof framing
Manufactured Roof trusses and gables 24" o.c.
2x6 gable ladders and fascia
2x6 fasica
Cardboard insulation baffels
2x4 truss bracing and strapping
2x4 ridge blocking
1/2 roof sheathing
1/2 sheathing clips
3 1/4" coated nails
2" sheathing staples
3/8" insulation baffle staples
Conduct framing inspection
Dry In
Shingles
210 Asphalt shingles
Ice and water shield
Asphalt ridged cap
1 1/4" shingle nails
Aluminum gable flashing
Roof vents
1st floor exterior doors
Front door 36/80 6 panel with side lite
Weiser brush nickel passage and deadbolt
Back door 36/80 6 Panel
Weiser brush nickel passage and deadbolt
Garage man door to house 36/80 6 panel with closer
Weiser brush nickel passage and deadbolt
Garage doors 9x7 Barcol inusulated with Genie opener
1st floor windows
2nd floor windows
Exterior Finishes
Eaves
Aluminum vented soffit (white)
Aluminum fascia
5" Gutter and down spouts
Stucco
Scaffolding
1 1/2" styrofoam insulation
Stucco base coat
Stucco finish coat
Parging
Stone work
Shingle gables
Exterior Decks and Stairs
Utility Rough-Ins and Complete Concrete
Rough-in plumbing
Conduct rough-in plumbing inspection
Place concrete for basement floor
Rough-in electrical
Conduct rough-in electrical inspection
Rough-in HVAC
Conduct rough-in HVAC inspection
Rough-in communication - phone, cable, computer, alarm
Interior Finishes
Insulation
Wall insulation - 1st floor
R20 fiberglass batt 6ml vapor barrier
Wall insulation - 2nd floor
R20 fiberglass batt 6ml vapor barrier
Ceiling insulation - 2nd floor
R40 Blown in cellulose 6ml vapor barrier
Conduct insulation inspection
3/8" vapor barrier Staples
Tuck tape
Acostical chalking
Drywall
Install drywall - 1st floor walls
Install drywall - 1st floor overhead
Install drywall 2nd floor walls
Install drywall 2nd floor overhead
Tape and float 1st floor drywall
Tape and float 2nd floor drywall
Paint
Texture all except entry and kitchen - 1st floor
Paint all except entry and kitchen - 1st floor
Hang wallpaper entry and kitchen - 1st floor
Texture all - 2nd floor
Paint all - 2nd floor
Paint exterior siding & trim work
Cabinets
Install 1st floor - kitchen cabinets
Install 1st floor - master bath and guest cabinets
Install 2nd floor - hall bath and private bath cabinets
Install chair rails, crown moldings, trim
Finish Plumbing
Complete 1st floor - kitchen plumbing
Complete 1st floor - master bath and guest plumbing
Complete 2nd floor - hall bath and private bath plumbing
Conduct finish plumbing inspection
Finish Electrical
Complete 1st floor circuits to service panel
Complete 2nd floor circuits to service panel
Conduct finish electrical inspection
Complete communications wiring - phone, cable, computer, alarm
Finish HVAC
Complete 1st floor - zone 1 HVAC
Complete 2nd floor - zone 2 HVAC
Conduct HVAC inspection
Carpet, Tile and Appliances
Tile entry, kitchen and baths
Carpet 1st floor
Carpet 2nd floor
Install appliances
Landscaping and Grounds Work
Pour concrete driveway and sidewalks
Install backyard fence
Sod and complete plantings - front yard
Sod and complete plantings - backyard
Final Acceptance
Complete final inspection for certificate of occupancy
Cleanup for occupancy
Perform final walk-through inspection
Complete punch list items
116 Replies
- Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes14y
Here are some of mine from our most recent project on 9th Street. We currently have about 7 or so going with our small group of investors. I am currently working on a purchase with 6 potential lots to build out with a fellow BP member.
Picture 1:
http://www.biggerpockets.com/photos/show/183185Picture 2:
http://www.biggerpockets.com/photos/show/183186Picture 3:
http://www.biggerpockets.com/photos/show/183187Picture 4:
http://www.biggerpockets.com/photos/show/183188Picture 5:
http://www.biggerpockets.com/photos/show/183189Picture 6:
http://www.biggerpockets.com/photos/show/183190Picture 7:
http://www.biggerpockets.com/photos/show/183191Picture 8:
http://www.biggerpockets.com/photos/show/183192Picture 9:
http://www.biggerpockets.com/photos/show/183193Picture 10:
http://www.biggerpockets.com/photos/show/183194We should hopefully be done building this one in about 2 months. Our newest builder can build them pretty consistently in between 3 and 4 months.
Rich...do you have institutional financing for your interim construction loan or do you use private financing? It sounds like you have great loan product from what you wrote above. The rate is a bit higher than what we have, but your leverage is fantastic!
- Contractor · Atlanta, GA · Member since 2008 · 978 posts · 985 votes14y
Rich,
This is an awesome thread. I really appreciate the virtual brain dump here! Someday, maybe, I will grow up and play with the big boys doing whole subdivisions. Until then, I will live vicariously through you!
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes14y
All my homes in SO TX have been built from cash except one. I have a BIL that received a lump sum and was going through it like water! I borrowed 100K from him at a high rate JUST so he wouldn't spend it for awhile? All other homes in so TX have been built for cash. That helps to keep the costs down, for sure. The 2 current homes in UT have a private lender at 2 pts and 9% for an 8 month term.
Aaron- Just make sure you don't stretch yourself too thin! I've had numerous friends lose EVERYTHING when they couldn't stay above water. There are ALWAYS ways to make money in RE. Just make sure you have the flexibility to adjust and change methods when needed. Rich.
- Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes14y
How much psf are you selling these houses for in South Texas Rich?
- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes14y
Rich,don't take it personal. Everyone that is on here isn't on here all the time, and some are members, but have fallen off the wayside. With you being a contractor in Texas, some of the stuff will translate to other areas, but much of the construction stuff is local and statewide, but you can always give general education! Welcome back!
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes14y
Bryan-the HUD statement shows a sales price of the appraised value, $157,000. There were some concessions given but as far as the sales price it amounts to $92 per square foot.
Karen – no problem. I'm too old to take anything very personal anymore! Actually, if you read this thread carefully, you'll notice I'm building homes in two different areas at the present time Utah and South Texas. I've also owned and built homes in other areas and much of the same process follows through in any of those. I see you are in Newport Beach, California and obviously you would have a much different set of requirements. I remember owning in the Pismo Beach area back in the 70s and having to fight with the California coastal commission to almost death. I also owned the lot on Billy goat Cliff above Laguna Beach at one time. I took it as part of a trade involving properties in five different states. After fighting with the local authorities there I decided it was easier to just sell the lot.
I agree that the price per square footage, cost of a lot, and flexibility of the general contractors as well as many other characteristics are definitely different in different areas of the United States. I've received enough comments and questions through personal e-mails that I do believe this thread is beneficial to many on BP. Rich
- Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes14y
Cool deal...your margins are a bit tighter than mine, but volume helps. Are lenders loaning on specs where you are building?
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes14y
I assume your question is whether lenders are making loans for the construction of the home. Is that correct? In South Texas I'm building strictly for cash and in Utah I do have a private investor that makes loans acceptable to me for the construction of the home. I believe that's what you are asking. Rich
- Real Estate Investor · Hartford, CT · Member since 2011 · 222 posts · 17 votes14y
Rich, Bryan
Even though we are in a middle of an recession, how does that affect your building of homes?
because I see alot of this is not right time to build or do new construction but im sure that materials and ect are really cheap since things are moving slow correct?
do you also build in low income area or is it just middle class and higher end? what do you guys look for before you build
- Real Estate Investor · Hartford, CT · Member since 2011 · 222 posts · 17 votes14y
Rich, Bryan
does the recession have a major affect on your building business? are things moving slow or is this one of the best times?
what do you guys look for in a city or state in order foryou guys to want to build there?
- Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes14y
I have only recently started building new construction Geoffrey. The difficulty of finding financing has actually helped our building business because it keeps competitors away and projects plentiful.
It isn't the time to build in many markets, but this is not true in the locations we are building in.
You can purchase product for less than you can build it for in many cases. This is what I do for our portfolio product we intend to keep. I prefer to build new product to sell rather than rehab projects. IMO it is safer to do things this way in the markets we are working in. I know many cite very larger returns fixing and flipping, but it is unclear to me whether or not the time the capital is idle is factored into these returns. Even if it is those projects carry more risk given the lack of my building background. The only way those projects make sense to me is as part of a bigger team like what our fund has set up.
- Developer · San Antonio , TX · Member since 2011 · 8 posts · 0 votes14y
Thank you Rich for sharing your experience and insight. Add me to your list.
- Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes14y
Rich...we have been studying your expenses to try to figure out where we can save money. Here are some comments from the guy in our group that keeps the books:
-Plumbing Rough + Top Out + Finish: $4,500 – This is really low, the plumber is not making much on this. We typically pay $6k.
-Electrical Rough + Finish: $4700 – This is a very cheap rate. Our price is about $6k-$7k
-HVAC Rough: $3500 – Dirt cheap. The units are half of this cost. We usually pay about $5k
-Roof Labor: $600 – Dirt cheap. I’ve gotten this price before, but it’s unusual
-Drywall: $600 – Dirt cheap. A crew could probably do that all in a day, but that is no money at all for a few guys
-Cabinets: $4,000 – These have got to be pine or very low grade materials. $6k is what we go for a standard material. $8k for something nicer
-Concrete Driveway: $1200 – We usually pay about $1,500 to $2,000
The odd thing is they went what I would consider high on some other areas like:
-Painting: $6kCan you shed any light on how you get some of the items above so cheap? Have you looked into shaving some of the costs in painting? Note that our properties are smaller than yours so I would expect your painting to cost more.
If you could share some of your materials suppliers for things like cabinets or anything else referenced above I am sure a lot of people would appreciate it!
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes14y
Hope everyone had a nice Christmas and is getting ready for the new year. I noticed this thread has gotten off track somewhat with specific costs and prices of homes that are currently being built. I want to get back to the initial reason I did this thread. It was to try and help BP members to understand that it is not rocket science to be able to construct a home of your own with proper guidelines and assistance. I don't want to anger general contractors either by making it seem like it is extremely easy. I guess it lies somewhere in the middle.
Geoffrey- I look for a couple different things.
1. Sunbelt area!(yes- St. George, UT fits in!)
2. Low median price home.
3. Area of growth (TX&UT were 1&2)
4. Low lot prices which allows lower price point.OK, here we go again on building a home. When the framing is almost complete, you'll be ready to have five or six other subcontractors immediately begin working on the home both inside and out. Inside the home these would consist of your electrician, plumber, HVAC, vacuum, and outside the home the roofer may dry in the roof, landscaper may start leveling a lot, stucco subcontractor may start with his process and the concrete company can start preparing to pour flat work.(Patio, walkways, and driveways).
These subcontractors should all be able to get along and do their work at the same time. There may be extension cords and generators all over the house but that is a site I always enjoy seeing.
I mentioned in a previous thread there are several ways to generate low bids from these various subcontractors. Just like an airline does not want to fly with empty seats, a contractor does not want to see time go by without having work to do. I always try to have several subcontractors that have already delivered bids to me for these various trades, but as it gets within a week or two of needing these subcontractors, I will go out and beat the bushes on other jobs that are reaching completion to see if I can find a subcontractor that has not lined up work for the next week or two. Normally these subcontractors are much more willing to cut their normal price down to generate some business for themselves and their crew and it is not difficult to save maybe as much as 25 to 35% on a bid. The other thing that I benefit from is now having a price per square foot that I may use for comparison purposes on future homes that I build. No subcontractor will be willing to do a job that cost him money, but he may be willing to do a job for less money, to keep his crew working and not going somewhere else.
Most of these subs that are currently in the home will be doing a portion of their work and will be returning later to finish. Once the rough in is done for electrical plumbing HVAC etc. you are ready for the next group of subcontractors. After receiving the approval from the inspector, you will be ready to insulate and close up the house with sheet rock if you are building in an area of woodframe homes.
While discussing sheet rock, this is one area that you are definitely able to improve the appearance of the home for very little money. Plant shelves,nooks, ceiling treatments, and foam pop outs will definitely improve the interior appearance of your home and cost you very little. This is the same situation outside with your stucco by doing some pop outs around vents, Windows, doors etc.
While the sheet rock is being installed you are basically limited to exterior work on the home. It will seem like the construction process has slowed down considerably while you wait for the sheet rock taping and texturing to dry, and then the same drying process with the paint.
After the walls are painted the hustle and bustle continues again inside the home with the finish carpentry installed (shelving, interior doors installed, baseboard, ceiling molding etc.) Cabinet boxes installed, floor tile, tub surrounds and shower tile, and door and window trim. Outside the home all concrete may be finished and the final grading for landscaping.
When the above items are completed the house will finally begins to take on an appearance of what the finished product will look like.
My answer as to how I get such low prices from my subs is pretty simple. When you have a good track record of building a home quickly and being prepared to pay all subs immediately upon completion, you earn a reputation. I do grind on my subs hard to get the lowest price possible in exchange for them knowing there will be no problem in receiving their pay instantly upon completion. In most instances I build for cash and do not have to wait for draws to be turned in. In comparison, there is a large builder in the St. George Utah area that sells homes from a model that he has. Upon approval of the buyer's credit the home is started and finished in approximately 8 weeks. No sub receives any money until the home closes! For the excavator and framer, this is a long time to wait, however these subs are guaranteed additional homes to build one right after another. The developer has no interest fees and no loan because he is building off the subcontractors materials and labor. The subs I use may not have as much work, but they know they will receive payment in full upon satisfactory completion. They seem to like that.
In answer to another question above, I don't do much research on the materials and pricing. My subcontractors bids include all materials and labor and I only compare the total bids. Materials must meet the specifications obviously.
Until the next installment be safe, and happy new year. Rich
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes14y
Let's go ahead and finish this house! Most of the work is been completed and now we just need to get the subcontractors back to basically finished their jobs. Once the cabinet Boxes are installed were ready for the countertops. In these examples above we are using granite countertops. These are individual slabs, but all mention a different method later on in this final thread.
When the countertops are installed in the sink holes are cut we are ready to start installing the sink's etc. The plumber returns and completes what they call a finish plumbing. This would be the sinks, exterior faucets, hose bibs outside, shower and tub hardware, and all drains.
At the same time, the electrician would now come in and install the light fixtures, plugs, and switches. Electricity would also finished the panel with all of the individual fuses connected to the wiring and then labeled.
The HVAC person would also be finishing up his installation with the vent covers and anything else still missing.
Outside the stucco would be getting its color coat if it wasn't previously applied. The landscaping would also be finished and any exterior walls would also be completed.
The finished person would also be installing all hardware inside the home including cabinet hardware, towel bars and racks, and all door hardware.
I think this pretty much completes the home and I wanted to mention a couple of other things that can save you money and still make the house look equally nice.
I mentioned above that often the countertops are granite slabs. The price for a slab of granite is very expensive and also very difficult to cut and also around the edges. I have found that I can make a countertop look just as nice using square pieces of granite that look like tile and turn them on a diamond angle. This does several things for you. You have a very attractive granite countertop but it also gives you contrast with your individual squares being turned on a diamond shape. It also gives you the flexibility that if you're countertop is cracked or scratched it is easily fixable by replacing a single square rather than dealing with the entire countertop. It also appears much easier to install 12 or 16 inch squares and make the joints look better than trying to match up the cut on slabs of granite when your cabinets change and go in a different angle.
In the bathrooms, you can save some money and also give it some character by hanging oval mirrors against the wall and over each sink. This is much less expensive than covering the entire wall with mirrors and adding the bevel along the edges. It is also less expensive for the electrician to install his switch in a blank wall then having to install it in a mirror that requires meticulous cuts.
As you build homes you will find more and more ideas of saving money and yet making the home look equally nice. I think this is basically the information that I wanted to transmit to people on BP. If you have additional questions, feel free to add to this thread and otherwise we'll let it stop.
Happy new year to all and a safe, prosperous 2012. Rich
- Real Estate Investor · Hartford, CT · Member since 2011 · 222 posts · 17 votes14y
Rich, Happy New Year to you and your family. Why do you think people make building houses seem very difficult? Do you think its because of lack of experience or do you think they just did not have any success doing with it? I remember you said a few threads ago that everyone that writes on BP is making money in RE.... I mean nothing is a cake walk in RE, right?? Just a question...Im very interested? Im a new investor and just anxious to learn.
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes14y
Thanks and same to yours. You quoted me WRONG. I said everyone on BP is NOT making money in RE. My guess is that it is actually a small minority that is actually getting ahead in RE on BP.
I think people over rate the difficulty in building houses. I think anyone can try it or watch carefully someone else doing it once, and the learning curve can be short.Some areas are more conducive to building homes, so all areas wouldn't fare the same. Rich - Real Estate Investor · Hartford, CT · Member since 2011 · 222 posts · 17 votes14y
Rich, yes I apologize. I did quote you wrong, i just noticed. However, yes that does make alot of sense. I would love to make new Construction apart of my business. I even want to construct my own personal residence. If you had some advice about new Construction for me and new Construction what would it be? Geoffrey Murphy
- 14yMark UpdegraffBusiness MemberReal Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes
Thanks Rich!
I love the tips for saving cash.
As my grandmother used to say, "A penny saved, is a penny earned."Hope you have an excellent 2012!
Mark
Updegraff Group Realty4.745 Reviews - Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes14y
Originally posted by Rich Weese:
... I wish I was better on these newfangled things known as computers. If someone can direct me to the location to learn how to post pictures ...http://www.biggerpockets.com/forums/25/topics/45114-how-to-post-a-picture-
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes14y
Originally posted by Bryan Hancock:
Here are Rich's building costs:...
The link Bryan supplied did not work for me, but I found that the link below seems to be OK:
Rich's Building Cost Accounting - Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes14y
Originally posted by Rich Weese:
I can't get the forward arrow to work. However, go to picture 32 FIRST, and then the arrow back works great. Thank you Bryan. RichRich,
The problem you are experiencing appears to be a site problem with how the picture gallery has the forward arrow links created. The links are using %5B for the character that is the left square bracket character '[', and the links are using %5D for the character that is the right square bracket character ']'.
Probably a problem that Josh should be made aware of.
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes14y
Originally posted by Rich Weese:
...
My answer as to how I get such low prices from my subs is pretty simple. When you have a good track record of building a home quickly and being prepared to pay all subs immediately upon completion, you earn a reputation. I do grind on my subs hard to get the lowest price possible in exchange for them knowing there will be no problem in receiving their pay instantly upon completion. In most instances I build for cash and do not have to wait for draws to be turned in. In comparison, there is a large builder in the St. George Utah area that sells homes from a model that he has. Upon approval of the buyer's credit the home is started and finished in approximately 8 weeks. No sub receives any money until the home closes! For the excavator and framer, this is a long time to wait, however these subs are guaranteed additional homes to build one right after another. The developer has no interest fees and no loan because he is building off the subcontractors materials and labor. The subs I use may not have as much work, but they know they will receive payment in full upon satisfactory completion. They seem to like that.
...Do you have a holdback percentage that you use in paying the subs? Do you pay your subs in draws along the way, or just a single lump sum at completion of their work? Do you have to resort to billbacks when a later sub damages work completed by an earlier sub (example being drywall guy drives screw missing a stud, but hitting electrical wiring adjacent to stud - and other similar boo-boos)?
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes14y
Steve- I wouldn't have the knowledge to make Josh aware of any computer problem!
If it is a sub that does rough in and then finish, I pay twice. If it is a single job like framing, one time pay only. All my subs that I've been working with for a long time, no holdback. New subs, 10% holdback. They also sign agreements to warranty their work. Rich
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