Hey ya’ll, I have been building a contracting company from the ground up with my wife for the past 5 years now. We were recently approached to build a custom house for a potential client and this would be a first for us. The client is a licensed realtor and the plans have already been written up, they are just seeking a contractor to build it. This is the direction we want our company to go in and would love to go for it since it is a very modest home as far as custom goes (~2,000sqft, 2 bed, 2 bath). Honestly we are just a little unsure of the initial steps.
I have worked most aspects of construction at some capacity and we regularly subcontract licensed work or work we don’t do in house. Our company mainly focuses on interior finishes from trim and finish carpentry to flooring and tile, kitchens, baths etc. We have also been subcontracted for other custom home builders in the area but I feel it would be a conflict of interest in approaching them asking how to essentially compete with them. We have also built on to homes but nothing that would require pulling permits and we live in Texas so a contractors license isn’t required. This house is also not within city limits which I do believe does not need permits pulled but please correct me if I’m wrong.
I’m aware I sound completely naive, because on the paperwork aspect I am. I won’t take a job I’m not confident in but if we could get some guidance I know this would be a good fit.
Just a young, enthusiastic contractor looking for guidance from experience. Thanks for the advice
Replies
My only advice would be....
Be carefull. There are a few straight up Real Estate companies and within, some good human beings. You say custom for a realtor, an individual or the company?
Forgive me but over the many years I’ve had some dealings with some shady people. Not totally goofy, but they seem to be hard to locate when $ become do. Of course I’ve worked for several good human beings that happen to be Realtors.
Know before you start about permits. Counties and regional permits and inspections are a possibility. Here in Ohio it’s not unusual for various “towns” to rely on a county inspection for residential.
And good relations with quality builders that seem to still be busy in the worst of times, is a good thing to hang onto. If you can’t do there work when they want it, maybe that bridge burns and don’t come back.
Over 4 decades I’ve had several offers that go both ways. “Stick with me and I’ll keep you busy for the rest of your life.......”. Some of those might have paid off, others would have been a flash in the pan.
So, I’m not going to discourage those with more balls than I, but go in with eyes open and a good contract and payment schedule!
Best of luck!
So It is Easy to make money and even easier to lose money. You have to be careful that you never low-ball so you can get the job. If you think it will open the door for other work you are correct,
however, all that other work will also be at a low-ball price. Remember you need to determine why they asked you, is it because of quality or price. You do not want to get jobs based on price. you want to be hired because they believe you will do a better job than everyone else.
About "We have also been subcontracted for other custom home builders in the area but I feel it would be a conflict of interest in approaching them asking how to essentially compete with them. "
I'd suggest reaching out to other contractors that you respect. The worst you can get is "NO!," but you might be surprised. We've all been newbies. Sometimes we have to learn the hard way, sometimes someone is willing to be a mentor, which leaves us with a debt we need to pay forward.
You might consider offering some sort of consulting fee, although, in general, mentoring is a labor of love. You might find a contractor who's ready to retire and would like to leave a legacy. Few people are insulted when someone says, "I need to learn and you seem like a good teacher."