I’ve been doing small remodels and repairs now for several years. While I still enjoy what I do, lately I’ve found myself dreaming about building houses from the ground up. So my question to all of you is this: How does a remodeler become a builder? Are there any good resources/books you would recommend? How does the financing work? Anything I should avoid at all costs? I would appreciate any and all advice. Thanks,
–Andy
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Replies
OOOHH you are in for a load now! Hold on to your pants. A helmet might be wise as well. LOL!
his pants are fine.
It's the shirt off his back that I'd worry about.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
a good handyman or remodelor can make more money than a builder.
you are already in a field that is more highly sought after.
If you are good as a remodlor, you have more skills than a builder, and deemand more respect
so, tell me again - WHY did you want to be a builder?
Welcome to the
Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
Being able to build a house from the ground up is great...but it can be a romantic notion or a business. Building a house for yourself or a loved one is about love. When it comes to making money doing "nothing but" that more times than not the love of it can quickly diminish. thats something you need to ask yourself. Its like when you have a hobby you love than deciede to try and make money at it. All of a sudden its not as close to your heart as it used to be. You know what I mean, right?
This isn't to say that people that build houses for other people from the ground up...well lets put it this way...its like getting married. It sounded good when you first thought about it and even after you started getting into it ...but after a half dozen years....thats why so many marrages fail....people don't see the whole picture before they jump in.
Maybe appreciate what you have and "build" on that for now. When you turn what you do now into what you love than you're a builder : )
Be erected ...ok ok now I'll have that smoke...lol
a,,,
The secret of Zen in two words is, "Not always so"!
When we meet, we say, Namaste'..it means..I honor the place in you where the entire universe resides, I honor the place in you of love, of light, of truth, of peace. I honor the place within you where if you are in that place in you and I am in that place in me, there is only one of us.
I've had the thoughts, too. But SWMBO vetos me building for us, and I wasn't going into debt building on spec for others. Oh, yes, it sounds exciting to stand back and say "I built that", but you'll be going to the same jobsite day after day after day. I've built a couple of small houses and done a couple of major renos, but I'd much rather do the bath or kitchen remodel, the small addition, and the week-long jobs where you get your money and don't build up the relationships that happen. That's me, I know, but maybe it'll strike a chord in you...
All the best...
To those who know - this may be obvious. To those who don't - I hope I've helped.
I finally have to ask, what does SWMBO stand for?
I've seen it enough and simply can not figure it out
Ben76 has got it right. I believe it has historical significance from L Rider Haggard's novel "She". Or it might possibly be that Haggard was as hen-pecked at the rest of us!All the best...
To those who know - this may be obvious. To those who don't - I hope I've helped.
Thanks guys..
Andy, you came to a good spot to get information. There are many sources, seek them all out.
When you decide that you are a builder, then you will be a builder. Obviously, at this stage of your building career, you're not an experienced builder but everyone starts somewhere.
Start researching everything you can about building and then jump in.
Being a builder is more administrative than anything else. Obviously, managing the finances is a big part of it. Go seek a construction loan and you'll be on your way to understanding exactly what it takes to be a builder. The people loaning the cash will force you to walk through the right hoops.
Follow your instincts. You've already asked some of the right questions, now don't stop asking till you know the answers.
blue
Thanks for the good input. Right now I am just in the considering stage, but we all know what that could lead to...
aaa.. 1st things first:
dog
pickup
skillsaw
all other things follow from those...
seriously
if you are in a rural market that doesn't support big builders you can probably build houses, but in most markets, small builders will make far more money doing additions and remodeling that they will on turn-key houses
one thing to think seriously about is building your own.. living in it for two years , then building your next and selling your first, live in it for two years, building your next and selling your second.... etc... this will pay well in terms of sweat equity, allow you to experiment with design and technique and strengthen or destroy your marriage....it is also very favorable in terms of capital gains ( zero until you hit $500K )Mike Smith Rhode Island : Design / Build / Repair / Restore
one thing to think seriously about is building your own.. living in it for two years , then building your next and selling your first, live in it for two years, building your next and selling your second.... etc... this will pay well in terms of sweat equity, allow you to experiment with design and technique and strengthen or destroy your marriage....it is also very favorable in terms of capital gains ( zero until you hit $500K )>>>>>>>>>>>>>>>>>
You forgot to tell him that for some people it never ends.....Becomes additive seeing how much money you can make never having to deal with anyone cept' the dust fairies. And its usually more than two years as you get down the line to bigger ones that warrant more detail....but I'll tell you, some people dread having to go back into customers houses again and I ain't namin' names!View Image
Andy,
I am a builder and will remodel / add-on occasionaly. I started as a frame carpenter. In my own experience, I do not agree with some of the post. I make more money as a builder than I did when remodeling and / or additions. To explain would take lots of time.
Remodeling / additions and new home construction both have pros and cons. I would rather work with the pros and cons of new homes than those of remodeling / additions.
I became a builder through framing, remodeling an additions. I took on larger and larger projects, until eventually I was able (willing to try) coordinating new home construction. I had also framed large custom homes.
I work in the upscale to high end markets, this fits in my rural area and in the satillite cities around Houston. It works in Houston also, but I avoid Houston as possible. We are flexiable, building truly custom homes giving the client what they want, not our "package". We do design / build, treating the design work as a seperate source of income from building.
Big volume builders selling for far less per SF are not competetion. They can not and do not do what we can do. The homes we build are not spec, they are pre-sold custom homes on the clients lot.
It has taken a long time and hard / quality work to obtain the reputation we have, and thus stay busy. But, I have found that once we established a good reputation in the upscale / high end market, referals are almost automatic.
We only do 3-6 homes per year, so I only have 3-6 jobsites, 3-6 clients, etc. I would say that the key to my success is doing a good job with each new home. The referrals far outweigh advertising.
Building is not easy, but neither is remodeling / additions. I do agree with the post suggesting that you should love and continue to love what you do.
EDIT / Below : I read the post from Jer, and he points out some of the practical elements of budgets, capitol reserve and bookkeeping...all very important.
I have built homes with a lot of "in house" people. I once employed 20 multi-talented craftsman. I will not go back to that, in fact my wife and I have a field supervisor, and do some site prep, grading (getting on the tractor or skid loader is sometimes a welcome break for me) and other odds and ends ourselves, but for the most part we are construction managers.
Add construction manager to bookkeepers, financial managers, sales staff, customer rep, quality control agents, office manager, marketing stratigest, inventory clerks, maintance heads over equipment and buildings, procurement agents, etc. etc. and I never (can not) strap on my nail bags. I have traded my nailbags and circualr saw, etc. etc. for computers, telephones, etc.
Hammer to computer? This was a jump, as I always equated making money with physically building something, but I got over it and now enjoy the white collar part of home building. If I was still using, personally supervising, and pushing my old 20 man crew, I would not have time to pursue the community development project I have talked about in Breaktime. I would have a hard time in pursuit of other properties and rental or flip units. Sometimes in this era, we would be finished and all would be looking at me asking "What are we going to do now?", because I had been personally building the cabinets and not chasing down other work.
Delegation of responsibilities was hard for me, but if you are going to grow it is a necessary part. My field supervisor helps me to keep things going in the field while I am making the next sale, and assisting in all other aforementioned responsibilities. My wife runs the office. It is working well, but I can expect 10-12 hour days. I try to take off at 12:00 Noon on fridays and rarely work on Saturdays. It can be tough, but I do love it, which helps sooth the pain.
One suggeston, that I forgot to mention that is an important part of my experience. I went to work for another builder as his super. I already had lots of practical experience, and had been remodeling and doing additions on my own, but the experience was key. I worked for him for a little over a year. I also joined the NAHB and Custom Builders Counsil. As other suggest, I read books, attended the NAHB Natiional Convertion and local meetings and seminars, etc. Oh yea, I joined Breaktime. The guys have helped me in many ways to date.
My own quote:
"Remodeling / additions and new home construction both have pros and cons. I would rather work with the pros and cons of new homes than those of remodeling / additions."
I'd rather do 1 custom home at $450,000.00 than 10 remodels at an average of $45,000.00 each.
Edited 2/5/2006 10:58 am ET by txlandlord
Edited 2/5/2006 11:06 am ET by txlandlord
You make some very good points, and have some good practical advice I can take to the bank.
First thing I would do is sit down and make a list of all the reasons you can think of as to why you want to be a builder, and think beyond the romantic, think practical. Post that list where you will see it every day. Do that first.
Start doing larger additions. Seek out more complicated ones with lots of mechanicals. You will be surprised to learn that there are rudimentary things you didn't know about actual construction You also might be surprised (having worked in renovation), that you know a lot more than you thought you did.
Have you worked in new construction? If not, you may want to hire on as a carpenter for a couple of years first just to get a taste. it's a different animal.
Make relationships with subcontractors and really get to know them well and work with them as much as you can, you may have already done this. Study the market in your area and ask yourself if it would be a wise thing to do. Are new homes moving ahead where you are?
Get a core group of good reliable carpenters and work with them and figure to pay them well. How are your people skills? Like Blue said, building homes for the GC is mostly administrative depending on the home you're building and the clients. You will have to learn to be very flexible with both the clients, subs and workers in your company....and then sometimes not.
Watch those numbers.
Are you familiar with the local building authorities and their sets of rules? Read books, there's lots of literature on how to go about becoming a builder. Ask questions of other builders in your area, just like you're doing here.
Be patient, because becoming a good builder takes many years, but you can really enjoy the ride if you so choose. Stay on top of things. Maybe get a good partner that takes up the slack from your weak side. If you're not so good with the books, find someone who can help or do for you, or the same with construction techniques, or the people end of it. Start small, keep your overhead low as you can, and be conservative. Pay yourself a conservative salary and any profit you make, save it and build up a buffer, and then start dumping profits back in to the business.
Good luck.
Must have been nice when it was HWMBO.
I'm a little different than most here.....
I only build for me... but I think I'm a builder... I'm not a contractor... when i finish one project i chill... then start the next.. it didn't happen overnite and i still work more than anyone i know have 10 irons in the fire all the time and my phone rings nite & day... I do almost all commerical, i do everything from the design to the finishout to the leasing... in 25 years i've only sold 2 properties and had partners in those or i'd still have em... even in partners i love... there is never "fairness" or even balance nothing is ever 50/50 so these days it's just me & my bank.. I still suck at the business side of it... ie i could generate much more $$$ from what i have than i do... but and this tops all list everytime... I have fun I haven't always made money but i always learned... what i preach to others is if you don't spend it you don't have to make it... keep your outflow down (when your outflow exceeds your income than your upkeep is your downfall)
go with your heart expect nothing and you will not be upset... oh yeah... life ain't fair if it was we'd all win the lotto
pony
nicely said...amen bruthaView Image
A businessmogul went on holiday to Mexico, sat on a beach and watched the fishermen come back from fishing
How many fish did you catch?
Oh, 3
How long did this take you?
About 3 hours
What will you do with them?
Cook them for the family and invite some friends, after lunch we sit on the beach and play guitar and have a good time
If you would stay out longer you could catch more fish, sell them and make some money, then you could buy a bigger boat and catch more fish, make even more money, matter of fact you could even retire with all that money
Really? And what would I do then?
Then you could sit with your family and friends on the beach and play guitar and have a good time
semar.....I was thinking the other day that we buy a truck to get us and the tools to work so we can pay for the tools and truck,we sure must enjoy what we do....:)
If you have to finance anything you are working for the banks, tie up a lot of you own capital and end up with meager returns.
Facit after 35 years: stay with remodelling, fast cash turnover, smaller projects = less headaches.
With all the experience I collected over the years I am now a remodelling specialist. I have a better life quality and dont spend all my time on an extended project, have more time with the family and more money left over in the long run
As a builder you will be only as good as your trades are. As a remodeller you are your own master.
You might end up like this
Now, that's funny.--------------------------
It's only satisfying if you eat it.
Hey thats not fair thecamera adds 10 pounds
Not only is that funny, but it's true. I actually witnessed an almost identical scenerio two years ago in Cancuun. I was in my hotel room getting dressed for the wedding we were attending and there they were down in one of the smaller pools- actually I think it was a fountain. She was parading around, dipping in the pool and finally went topless. He (same size as the guy in your picture) was videotaping the whole thing.
It was pretty pathetic to say the least. I watched for as long as I could before it got to the point that I was late for the wedding!
You obviously know which end of the hammer to hold on to.
You got a truck ?
Or a car with a big trunk ?
What more do you need ? Go for it !
=0)
Rudeness is the weak man's imitation of strength. ~~ Eric Hoffer
Another benefit to the build and move idea Mike and Andy talked about is it's a great way to build equity while keeping your (taxable) profits low.
That was a great help to me, when I understood the idea is to build equity, as opposed to making profit. TIPI,TIPI,TIPI!
It sounds like the build and move idea might be a good trial run. As far as ending up like the guy in that picture....Don't you guys know that all contractors in Washington have a setup like him? Why else do you think I'm doing this?--Andy