All Forum Posts by: Danny Kay

I would say typical owner provided items are at a low risk of injury liability. My contracts allow me to provide materials with contractors consent. 

I would have to see precident on what liability owner provided, contractor installed items would have. Can't imagine alot so long as the materials meet applicable requirements. 

Most liability comes from improper installation, not the actual product. At least in my experience. 

Can you sit for the Residential Basic exam (or whatever FL calls their equivalent contractors license)? Other wise you are going to need some serious volume to get anywhere close to that price per foot, at least in my area.

Ways to get a contractors Fee down:

1. Owner provided, contractor installed items: supply plumbing fixtures, appliances, and other specialty items. This will avoid the sub's retail market up on these items. make a list of what you will supply, and let it be known that you will pay for delays caused by the items you supply. Warranty is on you for these items. 

2. Split on-site CM time with the contractor. If you background is suitable for it (which it sounds like it is) try splitting on-site managment time with the contractor. Certain crews you could get rolling in the morning, saving the contractor a trip to the site.

3. Detailed spec sheet. Residential architecture plans are generally garbage. You need to substitute a long spec sheet with how you want everything done, materials used, etc. Mine is maybe 20 pages long, and doubles as my proforma. Its organized by section, where section summary is the relevant information for a contractor and everything else is essentially breaking the price down. Sections by order of construction is how mine is setup. This will provide info on everything from the subfloor I want, types of joists, plumbing rough in requirements, HVAC minimum specs I want, etc etc etc. This will cut out hours of questions/meetings with the contractor, and eliminate any delays because he doesn't have the info he needs to order and move forward. In return his management time will be less, and theoretically can afford to reduce fee a little. This also serves as quality control measure.

4. Getting a contractor to understand you are NOT a homeowner. You will get decisions to them immediately, pay for rightful change orders without delay, that you have secured financing and have the required amount of cash on hand to cover any discrepancies in the draw schedule, and will provide X number of units a year. Remember the interview process goes both ways. Contractors (and every business for that matter) will slap on a PITA profit factor if you are not careful, especially in this market where work is plentiful. You want to be the easiest customer the contractor will ever have.

Using take offs to get fee down probably is not going to help. Lumber yards provide material take offs for wood, each sub does their own, everything else is fairly simple. This wont really decrease the contractors overhead substantially, but will increase your exposure a fair amount.

Jump on Greg's offer as soon as you can. There are few people on this board that I read and absorb their posts, he is one of them.

 Patrick,

What are you trying to accomplish? I guess I am missing your end goal here.

You could provide take offs if you wanted. I am not sure what it would gain you. But I personally avoid doing this both from the owner perspective and architect. If you are off by one unit of whatever it is, you are going to get killed in fees from when the GC has to order the missing unit, or from delays you cause, from having to re-roll crews, etc. The line may become blurry as to actual costs and delays caused by your oversight, and things that you may not be at fault for. Point is you waste time and money. Let the contractor do take offs IMO.

The penality you are looking for to avoid delays is called liquidated damages. I only see this in commerical, and in hundreds of projects the only time I saw a client ALMOST use it was on a $20mm project where the GC was 1.5years late, even then the client didn't do it because of the difficulty. 

Your arrangement with a contractor is a realtionship that builds trust over time. Have a contract written to let you out Incase of non-performance, but to expect reperations isn't realistic, especially on small residential projects.

And yes you should care if you annoy the contractor. It goes against the realtionship building aspect. 

If you want that much control expect to take on the risk and liability exposure in return. No decent GC is going to let an owner run the show AND accept the liability for the owners potential shenanigans. 

A good contract will impose performance standards that will protect you in that regard. Schedules are tricky. Generally you hold a substantial portion of the Fee for after CO is received.

I have heard some GCs will pull permits for owners as a flat fee, the owner then does all the management. Have never gone this route personally. This route aligns with your last sentence in your post. 

Development costs play such a huge role in suburban land values, I personally wouldn't invest without knowing exactly what can be built and the cost to build it. But then again, that's how I feel no mater what the deal. 

On suburban land a tract right next to you could be substantially cheaper to develop than your parcel, meaning its value would be considerably higher than yours. If you use that parcel as a comp, you have immediately shot yourself in the foot before you even get started.

This thought process is the same in an urban environment, but the tract size is fractional (dollar for dollar) so the development costs as a percentage of project cost will usually drop (making it less influential).

Sitting on land has its disadvantages:

- Property Taxes

- Insurance 

- Maintenance (grass?)

- Trespassers and the associated risk from them on your property

- Income taxes: you can NOT write off expenses until you sell the property

Tip 1: know the product you want to build, exactly what it will cost, and the exact method/process it will take to build it. All this prior to closing.

That letter is very unclear. 

Unless those dollar figures are missing at a few zeros then I would delete this post and move on, before you get a lovely letter talking about libel from their attorney.

Honestly at the small scale these numbers are at you don't have any options other than to get someone to make it right, and move on. Well technically you have other options (litigation, BBB, blasting them on the internet), but those options are more costly than they are worth.

Since working out a reasonable solution with the owner of the company is not going to work. Find someone else to fix it for you, try to negotiate better payment terms in the future structured around passing inspections (although your 60/40 payment plan you mentioned is pretty standard), and charge the loss to contingency. You will be better off time and money wise I bet, and you wont have the stress of dealing with it for the next year.

Lets chats. Shoot me a PM, not sure I can help but would love to hear more.

In the mean time... I recommend Donald Perryman who owns Surveys Plus in Smyrna. Worked with him on tons of projects including single residences, 70+ lot subdivisions, and large format retail. His rates are competitive.

.. looks like I need to PM you His contact info.... 

Big difference between an architect and a surveyor but it Sounds like you may need both plus a civil engineer.

Will you be selling this project? I am local. 

Rezoning difficultly is highly dependent on the jurisdiction in which you are working, and can be impacted by politics, neighborhood coalitions, and of course what you are trying to accomplish.

Find a local zoning attorney, talk to your commissioners (or whatever their titles may be there), and go from there. Remember, have the land locked up; spreading word about your project with out having the land secured can be free lead generation for everyone you talk to including those in the government.