All Forum Posts by: Josh Cuthbertson

I would say a good argument for you to use is to state that the finishing stage occurs when they are putting all of the finishes in the project. Tile, paint, carpet, etc. etc.

Since finishing stage isn't really an industry term you'll have to come up with some sort of logic. You can make the 4th and final payment after you complete a "punch list." Google that term, it'll be a good one to use.

Good luck!

I'm no lawyer, but deal with lots of construction contracts. I would absolutely have an attorney look it over. If that winds up being to expensive, go to the American Institute of Architects website and look over their sample contracts between owner / contractor. Those are written specifically to protect owners. You may be able to review the language in those to see how similar your contract looks.

You need to watch out for allowances in the contract. These items are line item budgets and often times have no basis in reality so they end up being much higher than you anticipate. Also, is this a fixed price contract? A Cost Plus contract? Just ask that question if it doesn't state it.

Hi Rolf - The costs will vary depending on the design of the building among a variety of other factors. This seems like a project contractors would love to jump on. Don't be afraid to give a few of them a call and ask what they are typically seeing in the area for current costs. They will have a variety of questions they will ask you to isolate what you are thinking for finishes, size, number of units, etc. etc. but give them a call. They'll have information for you.

I know a few Construction Management companies and non-profit developers in the area you may be able to call to find out more. PM me if you want their contact info.

You could also verify the variance requirement with the City or County agency. Did you ask the architect if he verified the variance requirement? If they did, ask for the proof.

Take whatever budget you are given and add 20%. If looking at that new number scares you, then you may want to rethink doing the project.

But in all seriousness, add a contingency line item to your budget. We use anywhere from 5 - 10% depending on project flexibility. SFH are not incredibly complicated, but where they get tricky is how they interface with the ground at your particular site. May be a good idea to ask this question of your local building department to see if they have any knowledge of the particular site you are looking into developing.

I have been trying to get our firm to go the design/build route for years. Hard to teach an old dog new tricks, right?

Regardless, bidding multiple design/build firms at the outset is a great way to go. Don't be too concerned about the prices being higher in this venture because typically if a design/build firm has a good sub base of contractors they are giving really competitive pricing because they always have that firms work.

One advantage, that I really find of value, is that the design/build process keeps the contractors and architects on the same page. They both have incentive to work together. The more design-bid-build process immediately starts the two parties in an adversarial relationship. Them VS. Us.

One disadvantage to the design/build process is that A/E (Architecture / Engineering) fees can be deceiving. Most contractor led design/build firms say, "If you hire us, we'll throw in the A/E fees because we're building the project." Check this. Review their numbers. It isn't free, but they can hide it in their profit/overhead or general conditions numbers.

The other disadvantage (which may be advantageous to some) is cascading liability disappears in a design/build situation. I find it a disadvantage for the owner, because the design/build company insurance can be harder to pierce than would be in a typical design-bid-build situation should you need to go after one sub contractor.

All in all, both processes will work. But find out which situation best suits your needs. If you have time to project manage, then design-bid-build will be fine. If you don't, and want to hand over project management, then design/build maybe the solution.

Either way, reach out to me if you have more questions. I love talking construction delivery methods.

Good luck!

@Karen Margrave - I'll email you a shot, each time I upload the photos they are upside down for some reason.

I agree with everything @Karen Margrave said. However, I would just like to add to ask the planning staff if they would support your project. If the counter level, and senior level planners agree with you and think it is a good project, you'll have an easier time because they support it.

This is all developer risk. We've had clients purchase options on the property to take it off the market for 3+ months to negotiate with the City. I've had planning staff say they'll support it and the project does not go through, and I've had planning staff tell me they hate my project and won't support it and THAT went through. lol. Tough the entitlement process.

Hi Michael -

What's funny about our remote little town about 3 hours North of Oakland is that we're more expensive per sf than the bay area because we don't have a good subcontractor base. A standard MFH project up here is typically projected by door rather than cost per sf but may give you a good idea of what to budget. I just finished the design / construction management of 45 low-income units here in Redding, Ca at a cost of $222k per door. While the construction costs were around 10mil, the total project cost was around 15mil.

So....if we are more expensive, in the bay area you may be able to get this down to say $200k per door. So 2.4mil for build costs only. Soft costs are another thing.

Call some local GC's, see what they offer. They would jump at a project like yours. Costs per sf on MFH projects don't really mean anything unless your plans are done and you actually get it bid. But calling a GC and telling them you level of finishes and expectations might get you closer to you answer.

I don't think that is unreasonable at all for the stats you listed. A high end spec home for 2.55 mil? What did you expect?

Did you use an architect or draftsman? If your plans are not done yet how are GC's giving you a price? If they don't have final selections they are probably upping the allowances by quite a bit.