Got a call to submit a proposal to renovate 442 bathrooms, including all new fixtures and possibly tile floors. Low income rental apts, HUD loan to pay for it. My conundrum (?) is that this is a fairly huge job (understatement) for me, as I only do residential work and even that is on a smaller scale.
They want a proposal for one bathroom (they are all pretty much identical: steel tub, second floor bathrooms, tiled surround to be changed to acrylic tub and surround, change out the toilets, vanities, sinks and plumbing faucets) which would be the blueprint for the remaining 441, theoretically.
Anyone have any experience planning a job this big? I figure that I’ll need to rent a large dumpster rather than making dump runs, and would probably benefit from renting some off-site storage space so I can prestage the material for each bathroom.
Another thought is, I usually require a deposit (1/4-1/3 for total) and either a step payment, or payment in full when job is complete. But how do you arrange payment when you’re talking about a job that could conceivably last for more than 5 years? And while I’m thinking about it, should the proposal be for a limited time frame to prevent future increases in cost of living or inflation from eating into the profit line?
Sorry for my ignorance, this is a first for me.
Thanks.
Replies
An author, Roger von Oech, tells a story. If I ask you to make a strawberry shortcake, you could do it pretty easily: go to the store, get the ingredients and come home and make it. Now, if you are asked to make 5 or 10, same process. OTOH, if you are contracted to make 25000 of them, the process has to change. You'll need to purchase in qty and from a different source. Seasonally they might not have enough strawberries. And where will you store them? You'll need a cooler. And 25000 plates and forks. And how to make the whipped cream. Etc.
You're right to ask about a change in dumpster methods. Expand that to things like qty purchases of tile, and then storage of the tile, and fixtures, etc. While some will look at it as one thing repeated 400 times, there are often efficiencies from looking at it from a different perspective.
Thanks. I once had a flat of strawberries air freighted to Honolulu from Calif, so your analogy had a familiar taste to it. Thanks. Any other ideas?
And I'll take that order of shortcake, if you have one handy, lol. It's almost berry picky time here, btw.
I never met a tool I didn't like!
My only thought on the payments would be a downpayment of x dollars to get rolling with then a payment after each bath is complete, base it on % complete rather then on a time line so you can keep cash flow running the way you need it to.
I would think having a clause to cover increase in cost of goods would be a good idea since from what I read in JLC (I think), building materials rose by 9ish% last year, drywall was up 25%ish and steel was up nearly 50%.... At least if memory serves.
Any one you could partner up with and share the burdon?
Nick, what a cool possibility. As far as I can tell, the entire thing revolves around how fast you have to do them. Two a week, easy. Eighty of them next week, no way. I would be very concerned about a situation where you have to suddenly become a huge business where you're now a small business. One of the main causes of small business failure is growing too quickly.
So, if they're going to come at a moderate and steady pace, go for it. If it's fast and furious, steer clear.
As far as economies of scale go, call a plumbing wholesaler and ask what a toilet costs. Then ask what 400 toilets cost. Problem is, you probably don't need 400 toilet because you can't store them and can't pay for them all at once.
This isn't an answer to your question, but being that your tag line is " I never met a tool I didn't like", I suspect you are a " hands on" contractor.
I like to do everything myself as much as possible, but once I had done 2 or 3 of the same baths, knowing there was 440 more to go, I think I would have to slit my wrists.
I'd be real leary of anything involving HUD. i know a lot of people who have got burned. Genrally want it done for next to nothing. JOb conditions are usually horrible. Better keep and airtight contract.
The proposal will be reviewed and accepted by the owners of the complex, they are applying to HUD for the grant to do the renovations, so the apt. owners would be paying my bill. What strings HUD would place on the loan, however, I haven't a clue. I hear ya about the impact they might have, and it probably wouldn't be good.
Thanks.
I never met a tool I didn't like!
Will the units be occupied?
Is there a way you could sub certain elements out to allow you to focus on the critical items?
What is the proximity of these bathrooms relative to each other?
>>And while I'm thinking about it, should the proposal be for a limited time frame to prevent future increases in cost of living or inflation from eating into the profit line?"
I would index your commodity materials to prices at the local yard or supply house. When a change of great than %5 occurs, the price adjusts accordingly. Fixtures and finishes may be more of a challenge.
How did you get in contact with the owner of these units?
Jon Blakemore
RappahannockINC.com Fredericksburg, VA
Each bathroom is 6'x6', and subbing anything out is a possibility, but to be honest, it would be done quicker (IMO) from start to finish without it. No electrical to worry about (upgraded to code 5 years ago) and I do my own plumbing. I might think about subbing the tile to proceed on to another unit, though, as the tile set and grout would be time that could be used demo-ing and plumbing another unit.
There is only one bathroom per unit, on the second floor of each, and the apts are in a block of 4-5, nestle together such that parking and schlepping tools/materials may be problematic, another consideration.
Indexing, who determines the cost increase? They would want to prevent false increases I'm sure. Probably use a initial cost list based on material specs and a price list from each source. Any other ideas?
They contacted me. I would like to think it was my reputation, but I know they pulled an ad I have running in the paper. They wanted a number of bids, and I could just be filler, for all I know. But I can dream, can't I?
I never met a tool I didn't like!
Ask yourself "what happened to the last guy?"
Then ask yourself "what happens if I do only HUD work for 2 years and decide I've had enough. What will become of your client base? Will you have to start over?
I heard there's a revolving door at HUD and They eat contractors for lunch.
There was no last guy. The project is in development and planning, with bids being solicited.
I'm worried about both losing my client base as well as wanting some sort of an out should I decide it isn't working. I haven't got that figured out yet. The overall gross of 1.5-2 million, however, has me thinking, fast.
I never met a tool I didn't like!
Material storage isn't a problem. Find out what the completion schedule is, then cut a deal with the tile distributer and the plumbing distributer etc so they guarantee a just-in-time delivery of the product. In reality they will take monthly shipments from the mfgr and store it in their warehouse until you call for local deliveries.
I'm sorry, I thought you wanted it done the right way.
nick... site security and sanitation are also concerns.. in one of our previous recessions, i worked in section 8 in Providence.
each multi-family was completely vacant.. except for the cockroaches.. very tough conditions..
also.. who is on the bid list.. if you are bidding against some types of companies... the successful bidder is going to low-ball the job.. then resell it to a bunch of subs... the end result is the competition is going to be so far below your break-even it will not be worth your time bidding..
now.. another consideration is .. will it be a prevailing wage job?
if so.. sole proprietors and partners ( companies with no employees ) will usually have a lower wage in their bids than a legit employer paying prevailing wageMike Smith Rhode Island : Design / Build / Repair / Restore
Security is a concern; it's low income housing and parking is not line of sight. No garage to work in/store material, so logistics will need to be worked out without the 'loss' of material or tools.
From what I understand from talking to the VP of the complex, they pulled names from various sources to ask for bids, which means little or nothing. They might already know who they what to do the project, and my guess is it would be a company with a much bigger crew than just me, myself, and I.
I'll admit I have a small chance at this; I'd be lucky to get one done a week, but it isn't a complete gut, as I usually do, and the only DW work would be patching where the tub/surround are replaced. But one a week is 52 a year, which figures out to be, oh, what, almost nine years. They are thinking 2 years, though I'm guessing HUD might have something to say about the scheduling.
Interesting point about underbidding to turn around and sell it to subs, I hadn't thought of that. It doesn't matter, my proposal will be what it will cost me to do the job and make a profit, nothing less.
I never met a tool I didn't like!
Nick.
I'd be real concerned that your dream doesn't turn into a nightmare.
Give some real thought to wheather you would enjoy being tied down to one job for years.Also find out if their time frame would allow the job to stretch that long.
Neat oppurtunity if you can figure a way to control it.
The dumpster issue will need to be doubled as each day or night you aren't around the existing tennants will dump stuff in it.
Often they may have some storage available for materials. Ask. But look at it first to make sure its secure.
My plumbing supplier will stage up to 10 toilets etc. for me if I am doing something that takes a couple of months. Check with yours. Also ask them about pricing and whether you can get a break ordering 10 units at a time, or 15 or what ever.
Hire help. I agree with above that having to do that many bathrooms would be a grind. But if you can hire competent help, work with them on the first 10 then work in some of your normal clients while going back to the project occasionally during slow times etc. it would be the perfect deal. Might consider hiring 2, so when one quits you aren't screwed.
This is a big step. I wouldn't bid it low as it is certainly a big ramp up for you. But I also wouldn't consider using it as my main deal either.
We are currently being courted by the local Regional Planning commision as they can't get contractors. They take accepted rental property and pay half of the renovations while the land lord pays the other half. The two I have looked at are complete rehabs. Month maybe two of work. But we are already busy. So I am looking at only doing one at a time and subbing maybe half of it out. Lots of considerations. Don't be afraid to give it a whirl if you think you can handle it but on the other hand don't be afraid to say no if you see you can't. Good luck. DanT
Thanks Dan, was hoping you would chime in. It seems that hiring one or two may be inevitable, and your suggestions make sense, thanks.
Couldn't sleep much last night, ironing out details in my mind while mentally jotting down notes and questions, all of which disappeared by morning...
I never met a tool I didn't like!
Nick, I work with a lot of HUD contractors in my other life as a construction recruiter. HUD work can be VERY profitable if done right, but it is hard to do right.
If you are a small (1-3 person) company, I'm guessing they're just pricing you to check the bid on a bigger GC. The fact that they asked you to price one bath is a red flag to me. If you do it, make sure you charge them for the bid.
That is, unless it's a GC asking for the bid. In which case, you might be able to pick as many of the units as you can/want to do.
Also, is the occupied rehab? Very different animal if it is, and I would run fast away from the job. Again, very profitable if done well... very hard to do well.
Whatever the outcome, please keep us posted. I'm very curious what your read on this is.
Brian_____________________________HomeBase______________ LLC
Thanks, the request in coming from the 'main' office, the VP in charge of the place. To be honest, I have no idea whether it is a private enterprise, or government funded, but I was leaning toward private, as the name of the complex is the same name as the VP.
They would like to rehab the vacant units as they open, but admit that there will be times that isn't possible, so rehabbing habited units will be required. I've reno'd single bath homes before and it's not fun, but managable. Just means the toilet doesn't get removed until it's floor time, either that or it's taken off in the morning and reset in the pm.
Thanks for your insight.
I never met a tool I didn't like!
Don't hesitate to give him a bigger number than you're comfortable with. When you're dealing with tenants you should add a 20% PITA premium.
Keep us posted as you find out more._____________________________HomeBase______________ LLC
Nick, here's my 2 cents for what it's worth. A lot depends on their expectations for schedule, and occupancy of units. I agree that if they're occupied I wouldn't consider it. I've had some experience as a subcontractor on these big jobs. We did 2 stages of college dorm renovations 2 summers in a row. Work started the day after school let out and had to be finished by the first part of August. We did about 110 apartments the first summer and about 130 the following year. Our scope of work was demo of walls, kitchen, flooring,{3 bedroom,one bath units}remove existing exterior doors, replace doors, hang new interior doors { 1 3/4" solid core wood}, install kitchen & bath cab's and tops,install all trimwork, install all shelving, install all hardware, final cleaning of entire units. Planning is essential. The GC on the job was good to work for so that helped. HUD wasn't involved in those but we have done other jobs where they were. If they control the money, you may not be able to dictate the terms of payment the way you want. Also, be ready for paperwork.
Dan,
I have aquestion for you regarding tub liners vs. refinishing. Tried to e-mail but it bounced back. Please send an e-mail that I can reply to.
Scott
Scott,
[email protected] will work. Drop the 1 of course. DanT
You sound like a small business and your prices are probably to low anyway, so here is what I would do if I was you.
Figure out what you would charge to do this job as a regular bid. Double the price and multiply by 442. If you get it you will figure out how to deal with all the headaches. If you don't, it's someone else's problem.
Bear
Nick,
Edit: Oops! you posted 59190.21 while I was typing. Never mind most of the following. you may get some ideas form some of it. I don't have a clue how to make that situation work for fun and profit.
SamT
Look at some numbers. 2 year schedule. 100 weeks. 4.41 units a week if no problems come up. Is there any way you can do 4.41 units per week by yourself for the next 2 years?
No? So you are going to have to hire help. More on that in a minute.
Delivery. 4 units a week is lots of time and money. 2 today, 1 tomorrow, and 1 in 3 days. Blah.
Disposal. If a dumpster will hold 4 units, it will take a week to fill. Except that gives the neighbors a week to fill it with their trash.
Problems. I recently worked on a 500+ unit job as a plumber, everything from rough in to troubleshooting the finished product. We had 2 men fulltime just finding and fixing problems. Of course we had 1000+ baths, 500+ kitchens, W/H's and washrooms.
From a production viewpoint;
I would say this job could be completed in 6 months to a year, mostly depending on access to the units. If the units are occupied, 1 to maybe 1.2 years.
I would want to "partner" with suppliers of plumbing, tile, labor, final cleaning, and a construction recycler (about 1/2 of the units will be resellable.)
Transportation;
I would buy 4 trucks- 1 Stakeside Dump for trash
- 2 Loboy boxes (Uhaul) for tools and recyclables
- 1 box with Tommy Lift with pallet jack for deliverables
I would have 21 Unit Storage Pallets (USP's) built. A USP would store the toilet tank, the vanity, and the toilet bowl on the bottom shelf, the tub on the second shelf, the sink and fixtures on top, and the surround on the ends. I would size the box with TommyLift truck to hold 11 of these. Leave 10 at the plumbers to fill during the week. the 21st is to hold replacements of bad items at the jobsite it stays on the truck and gets refilled as needed (dailey, probable by you.). It should carry 2 each toilet guts, sink faucets, and shower/tub faucets. Make sure you can return the bad units. The pallet jack allows the fixture setter to wheel a units supplies to the front door.
Labor; The first day on site, I would have my labor supplier send one man. I would teach him how to demo and rough clean, and how to choose recycle or trash. The second day have another man sent and watch the two work. Note that it may take a full week to get two good men. They should complete 2 1/2 units a day by the end of the second week. On Fridays, they make dump and recycle runs.
On the third and fourth days, I would teach a new man how to Drywall and Paint. He should complete an average of 2 1/4 units a day.
Time for the tileman. He can do 2 1/2 units a day, leaving 1 day/week for call backs, but he has a 2 day turnaround.
As soon as the tile guy turns over a unit, have Labor send another man. train him to assemble and install the vanity and fixtures. He can do 2 1/4 units a day leaving 1/2 day friday for a supply run to the plumbers. BTW, did I mention that the vanity supplier should deliver 10 units a week to the plumbers?
I would sub to a trained plumber to install surrounds and troubleshoot and replace all fixtures, and create a punchlist. Maybe 2 or 3 days a week.
Finally, sub to a construction cleaning outfit to clean and polish 10 units a week and develop a semi-final punchlist. The final is, of course, made by you and the client.
Everybody on site should be looking for problems, ie, the demo crew should notice that a stud needs replacing or a pipe looks wierd.
You are now looking at 10 units per week with a 1 week turnaround. If it takes 2 weeks to ramp up and 1 week turnaound this project should take 47 weeks to earn the profit.
4-5 employees, a plumbing sub, a tile sub, and a cleaning sub. You will have to be to goto guy and the "someone elses job" guy. This should leave you with 4 hours in the middle of the days to keep your current market active. You could designate the plumber as the second goto person, and the tile man (=~ 8 hrs/wk) as the third. Double everybody up and do it in 30? weeks.
Questions?
Hopeing this helps you with your dreams and plans,
SamT
Edited 6/8/2005 8:59 am ET by SamT
Here in Washington we'd need a performance bond and liability insurance for a job like this. Performance bonds are sold by bonding companies, based on corporate, or in the case of a sole propriatership, personal credit. $2 million bond? That's a LOT of risk.
Plus, once I increase liability insurance for bigger jobs, my insurance gets more expensive after the job is done, too.
Just a couple things to investigate before spending loads of time bidding any government funded job.
Sam,
Thanks for the detailed info, you've obviously done this before whereas I have not, not at this volume, for sure.
Want a job renovating 442 bathrooms : )
Thanks again
I never met a tool I didn't like!
About 3 years ago I did the refit on 34 bathrooms in a motel unit.
They were done in stages of 6 before moving on to the next. They all involved a full rip out and all new fixtures.
One was done as a trial to see if the owners liked it and also to get a good handle on costs.
The electrical, plumbing and tile was subbed out. After the first batch I would average under 3 days to do each one. A large dumpster would just do 6 units before having to be emptied.
To speed things up, the same step was done on each before moving on. eg: rip out 6, flatten the walls and prep for drywall, plumbing going on at one end whilst I was at the other, sparky would follow plumber.
Drywall, plaster.
Painter would start at one end whilst the tiler had 3 tied up, then they would swap.
All plumbing gear was arranged in a supply deal with a local outfit. A call would be made and it would arrive as needed on a truck. Same with drywall etc.
Never had an issue with holdups and as it only turned up when I wanted it, no storage problems.
It took me 5 months, come the end I was utterly sick of it. I knew most of the measurements in my head, the same thing week after week got really boring. Right near the end a faulty light caused one I had just finished to burn down. The owners wanted me to submit a quote to re-do the thing. I dont think so...........:-)
To do that much work on your own would be very very difficult. 9 years of it and by the time you had finished the last, the first would be about ready for a revamp.
The outfit who managed the whole thing asked me after I had started out on my own, if I wanted to do some more. I would, but only if the job was in stages with a gap between. I felt that doing a job for 5 to 6 months might compromise other work and referrals. If your regular source of work has to go elsewhere a few times.....you lose it.
Everything, 100% of it, depends on how you look at it.
DW
Only if I can leave my bags home.
SamT
I'm probably late picking up on this, but, have you thought what it's like to be 'out of circulation' for that length of time? What happens with those little old ladies that rely upon your skills that just might wnat an addition or reno - something where ALL your talents get used. Oh, sure, looks like big bucks, but at what personal and emotional expense. I went from 1-man op to a 'big' (for me) Ltd Co, some employees, etc...but, man the headaches and the paperwork! went back to just being me.
Which kinda brings up point...if you DO go for this, set that job up as a limited company, so's it won't bring you down completely. And the best of luck to you.
Ciao for niao
***I'm a contractor - but I'm trying to go straight!***
Nick - Responses so far are well beyond mine. I would just add one thing - on your quote, make sure you allow for unseen conditions. Probably a basic item for most, but just in case the $ signs got in the way...Don
Thanks. That's one of the few things you can depend on; the unforseen, unexpected, and overlooked expenses and events. Can't plan for everything, just try to establish an equilibrium between the exciting and the mundane.
I never met a tool I didn't like!