I’m at the 2 1/2 year mark as a general contractor. I live relatively small town, last time I checked pop. 250,000. For the past couple of years I’ve built to specs; sold one and have been sitting on another. The money is the same as the carpenters wages I made prior to this venture. Can’t seem to get what I need for these houses. Little extras, nobody wants to pay for.
So, I’m concerned about the ability to make money here. Small town lots of competition and mountains all around(its difficult to find lots in for 35 to 45k).
So, I’m thinking about giving up the Appalachians and going where the work is. Anybody know where that may be?
Replies
Let's get real here first.
250,000 pop is definitely NOT a small town.
I've lived in a couple of small CITIES that had a pop of around 18,000. I'd get lost in a "town" of a quarter million people. Must be a matter of perspective...
Being curious, I went to your profile to see where this town was and found nothing, so I clicked on your website and still could find nothing about location other than the local subdivision in which you are working. (This is an aside, but a website that does not provide a physical adress and phone contact info for a business is wasting time to publish it, IMO)
but I got confused there at that site, because you listed in your portfolio, two houses that sold within ten days... Care to clarify?
They look like great work though!
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those was some pretty houses. look like 500k around here. maybe you building too big. get something that anybody can afford. around here 120k is only the top 30%
Thanks for the suggestions. I need a Bio. and contact info for sure.
The second house- lot 12- I built was under contract in early November. Being overly optimistic, I allowed for the buyer to put a contingent on their house selling first. The house did not sell, so its on the market again.
The house- lot 12- is going for $145. per sqft. For a spec, that's high. I have more money in the house than a typical spec in this area? Maybe, I spend to much money on curb appeal.
Yeah, its a small city. Asheville,NC.
I have a custom going on at the moment, which fell into my lap- pure luck. I dont see specs being profitable for me, here in Asheville. There aren't enough subdivisions. I speculate that after two houses I will not be able to buy another lot with the revenue from the two sales.
Customs - Jacobellybuilding. Whos that?
Asheville shares the top spot as one of the most expensive places to live in NC, no jobs lots of retirees and trust funds and a tun of builders.
I don't particularly appreciate urban sprawl. But I think I want to go where the work is.
Ga-koe-bali
to get good custom jobs - where the money is - you have to have a reputation first. But you are talking of moving away from where you are already getting started. Might be too impatiient on that issue.But, I am a sit tight kind of guy...You got some cash out of that contract, right? Are the extra features that ran the cost up above the average stuff that the contractee ordered, driving your cost out of the ballpark?
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The offer to purchase contract was contingent on the sale of their house, so no I was not able to keep the earnest money.
I used to make my living from construction mostly as self employed remodeler, framing foreman for first years, for a while as site super for a company, built and sold two specs of my own and now DW and I run a real estate office in a small town (4,500). 25 year progression of events...
IMO, there are only rarely good markets for spec building and they move around from area to area. Although a few guys do it, I discourage spec building in my area because I don't want to see my customers lose money or, like you say, make wages while tying up their money and time while seeing realtors and bankers make more than they make as the builder. (Sorry, ALL, but if you build a spec and you don't know EVERYTHING about what's selling and how fast, it will be YOUR FAULT is the place doesn't sell well or for the price you hoped. Take it from someone who's been on both sides of the story.) The bankers make WAY more than brokers!
Imagination and idealism are often the worst enemies of the fledgling spec builder. Sorry again, but if you want to make money and get established you will need to build to the market where the most buyers are in your first years.
Remember, if what you want to do is readily profitable then there will already be others who are established at doing it. They understand financing, appraisal, real estate marketing and building to a niche. They already have the suppiers figured out. They already have the subs that work well for them. They know that they make better money off pre-sold contracts because they make big bucks off change orders. It's the rare and lucky sob that actually makes a profit from spec building if s/he doesn't know the market. And then, the damn market can change at the drop of a hat for seamingly unrelated reasons (our business took a ten week nose dive in the middle of our best sales season immediately after 9-11. I certainly didn't see that coming, even after the attack had happened!).
Another move that seems common amoungst less experienced spec builders is to make each successive house a little bigger, fancier, and more expensive until they price themselves right out of their market and wind up sitting on the biggest chunk of worry and debt that they'd yet bit off.
Of course, there are exceptions to all generalities and I've even managed to be the lucky exception a time or two. I also learned that it's damn dumb to simply expect that I could pull off a lucky sale every time.
You can do a market analysis on your own or get one from two or three brokers WHO SELL HOMES IN YOUR SPECIFIC LOCATION!
Before I would ever build another spec, I'd spend LOTS of time researching the market. Talk to brokers, but make sure you get the whole story including sale price as a percentage of asking price, length of time marketed by a competent broker (I usually don't count FSBO time since FSBOs are rarely marketed well), percentage of homes over and under the price you need for yours, and more.
Some say the good judgement comes from experience and that experience comes from bad judgement. Sure seems to have applied to my life!
Best of luck to you, JB.
I'm thankful for the loyal opposition! It's hard to learn much from those who simply agree with you.
has... i've built two specs... finally made a deal with the devil.... i won't build no more specs
finally sold the last one after sitting on it for 7 years.... sold it JUST before the housing market took off and the sales prices & rents doubled..
anyways... your post just about sums it up.. anyone contemplating specs would do well to print it out and post it on the wall
most spec builders i've known eventually build themselves into bankruptcy...
now... if you can meet the market and not overbuild... you might be able to buy yourself a job...Mike Smith Rhode Island : Design / Build / Repair / Restore
".... sold it JUST before the housing market took off and the sales prices & rents doubled.."Whew! You got out of that one just in the nick of time!LOL
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Geezuz Mike....Has....you guys are scaring me.
We're just getting ready to enter the spec market.
There are a ton of speccers in our area and competition's fierce but that is also a good omen....the idea works!
I framed a some nice ranches last year for a guy who was speccing it. It was an empty nester type..maybe 500-700k when finished. Anyways, the builder told us that he's been speccing the same basic ranch for about 15 years and that he's never finished one before it was sold...and that he stays right onthem till they're done.
He did in fact get them done fast.
I checked the house out a few months after I framed it and yes, they both were sold!
Like Has said...it all depends on the market...as well as the timing.
Any Mike has explained quite well what happens when the market dries up.....7 years is a long time to finance a spec!!!
We are hedging our bet somewhat...we're crawling in bed with a different builder that has lived off spec building for 20 years. He just likes us and is willing to work a 50/50 deal with us. We're glad to tap into his financial network. Its kind of a safe way to learn the ropes.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Customers, and giving them an exellent example of what they thought they wanted, are where it's at.
Why is it somehow comforting to know that I'm not the only one who seems to learn things the hard way? LOLI'm thankful for the loyal opposition! It's hard to learn much from those who simply agree with you.
most spec builders i've known eventually build themselves into bankruptcy...
Now thats funny because it's so true. While I am pretty skilled Carpenter with a rather large bag of tricks, My father is a pretty skilled Carpenter with a huge amount of Knowledge of the business end of things.
Before My current misadventure of a career change we often talked of building a Spec house. NO matter how we ran the numbers we would just about be paying someone to take our house off of our hands.
Large Sub-divisions and big builders are the kings around here. By the time we found a lot and built a house and added on enough just to cover our expenses we were at the price of one of the local Mc Mansions. We couldn't afford a big enough Sub-Division between the two of us to spread the costs out and make it profitable.
MOve to the over $1 mil market and we would be in better shape, maybe. NOt too many people want to spend a Million Dollars on a house without having some say in every aspect of it's construction.
>Yeah, its a small city. Asheville,NC.Hey, me too! I looked at the site, saw the development, and had no clue it was here. Where is that? South of the city? West? I'm in Haw Creek, just east of the mall.Last I heard, Asheville had 70-80k, with the surrounding area (Hendersonville, Waynesville, Weaverville, Black Mountain, and points between) bringing us to 200k or so. Got a few other locals here. mitch is down near Brevard. Rascon (sp) is toward Old Fort.>The house- lot 12- is going for $145. per sqft. For a spec, that's high.That's high from what I saw when looking around before building mine.Of course, times may be changing. I heard from my excavator they worked on a development off Patton that's selling lots smaller than my 1.75 acre for.........$350,000 per. Lots! Not houses. Cress Mountain, I think they said. Haven't verified. You have any info? If they're selling LOTS for that, with the view I have, I just may have to put my HOUSE on the market!
Edited 1/22/2005 5:23 pm ET by Cloud Hidden
Hillshire Woods is out in the Fairview area. Down Old Fort Rd. a spell. About 18 minutes to Charlotte St. There are only a few lots left and all of them are difficult to build on. Maybe the pop. 12 years ago was up to 150,000. not 250k (Buncombe county).
What are you doin here?
Bobby
Ah ha! Guessed sorta right...Fairview is South. Told realtor in 97 we wanted close to downtown. She drove us way down to and beyond Fairview. Yeah, like I wanna deal with traffic on 74 every day. Ended up in Sondley up against the Parkway. Know where that is?What am I doing here? Breaktime or Asheville? BT...follow my profile to my web page, and the relevance will be clear, I think. Asheville...essentially same thing. That, and chillin' with DW and DD.Wonder who/what we know in common...
2000 Census for Buncombe is 206k, Avl 69k. I keep meaning to take some optics and look for your place when I go over the hill to that little town west of Old Fort. We usually count it as one of our suburbs. Old Fort Pop 963, but then there is the "greater Old Fort megaplex" and McDowell county is 42,251 and there are no "K"s after the numbers.
Bob
I looked at your site. Beautiful work, nice site except I could not figure out where you are. As someone will probably say, fill out your profile. The site does not give any way to contact you other than e-mail. Those of us in the real sticks find a place with a quarter of a million somewhat bigger than a small town.
The Appalachians run a pretty good way. It sounds like the economy is healthy if lots are going for that amount. As much as I would hate to share too much with realtor you may need to pair up with one. Is your target market young professionals, relocating out of town retirees, or what.
I would think that spec houses get tougher the more bells and whistles you have. Your unsold looks like a lot of people's dream home, surprised it has not sold. What is your asking price? I would think unless an area has a lot of upper level corporate turnover where folks buy high dollar places in a hurry you are in a hurt. I would think most who want big dollar places want to spec them out themselves.
I lived in Wichita, KS for 10 yrs and it was booming then. Rent-a-center, Pizza Hut, Cessna, Beechcraft, Boeing were all doing well and you could have built 250 to 350 K places and turned them easy. The rest of the world usually does not enjoy that.
Good luck.
Aside from the points allready made;
I can't tell which house is for sale. I think your site says that you sold them both, but your post says you sold one and are sitting on another.
I would ask you what has changed, or more importantly, what do you think you did differently with the unsold house that is causing it to sit.
A house sitting that long begins to develop a stigma, and word travels. Even if it's a fine house, the fact that it is not selling makes it seem as though there is something 'wrong' with it.
Can you sell your house and move into the new one? Live there for 2 years and not pay capital gains taxes.
I used to work for a builder who had a formula, to never build something that you wouldn't live in yourself. Or rent out. He did a lot of moving and finagling, but I don't think he ever paid a dime of tax on the profits from any of those houses.
Good luck, and get back to us.
FWIW, it's booming here. (see my profile) Lots and lots of huge junky new houses starting at over 400k and going way up to 3or4x that.
EricI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
Second house has smaller bedrooms and the master bath isn't what people dream of.
The mortgage may be hard for use to swing. Could turn out to be the only option.
Where do you call home.
you just answer your own question. No jobs, lot of retiree.. That both an answer for cutting back, saving, building small. Not enought sudvision, maybe start a sudvision.
Place your cursor over my name and click. That'll give you about all the info on me I'm willing to give up at this point!!
The mortgage may be hard for use to swing. Could turn out to be the only option.
Put a small apartment over the garage or in the basement, works every time. (don't tell anyone)
EricI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
fellow wichitan,hello i clicked on your profile doesn't look like your still around. i had to laugh at the employers you listed pizza huts gone, beechcraft is raytheon , laid off probably 10k, cessna about another 10k, boeing has probably kicked 15 k out the door all since 9-11.pretty scarey place around here since then. real estate has probably held as well or better than could be expected because of intrest rates , but that is the only bright star around here. anyway i'd hate to be sitting on a bunch of spec house's right now. i have a buddy that has about 4 or 5 sitting ready to sell, the offers he's recieved won't even cover his cost and they are on his own money-no const. loan intrest involved. anyway good to see someone from this part of u.s as most are up n.e. larry hand me the chainsaw, i need to trim the casing just a hair.
We moved in June of 97. Pizza Hut had already left. I used to take care of their airplanes and knew the Carney brothers and others in the start of PH. Last time we visited, about two years ago it was still booming on both East toward Andover and West.
I lived in Tallgrass, that was a great development, one square mile with country club in center and at least 10 subdivisions and a commercial corner. IIRC ranged from about 135k to 1 mil in 1987 when I moved there.
Miss it a little, at least I had a transition from the jet set to a manufacturer's rep before moving back to the original homeplace. Former employer and best friend owned Midwest Corporate Aviation at Jabara. I was Executive VP and Gen Mgr. Knew lots of rich folk. Think I prefer those just above the poverty level here. <g>.
I preach this alot... have'n been in business since i was 15 and never had a job i didn't create...
You make your money buy'n & work'n smart... the market tells you what you can sell your product for...
I unlike others here do not put a $$$ value on my labor.... but then everything I build is mine and for me (commerical retail & office, apartments, or I'll live in it and use it).
everything you don't spend you don't have to make...
I've addressed a few things on here before... but do'n what you have been doing will keep getting you what you have...
I'm not say'n buy the cheapest stuff you can get... but buy the best stuff at the best prices... if i need alot of something I'll import a whole container of it... if i need/want a $500 bath fixture i'll hunt ebay... every time i don't spend $100 or a $1000 dollars thats money I don't have to pay interest on...and don't have to repay... I can and do projects for less than half of my best bids...
most anyone can toss dollars at a project and get a great project... but knowing value can get you a great project that makes sense...
If you have a spec house that hasn't sold... you can yell a hundred reasons why, but there really is just one reason for a properly marketed house or anything not selling
PRICE
it's why i like ebay what something brings on ebay is exactly what that item is worth today at that time & place ...period...
pony
If i was building spec houses I think I'd want to know what it'd sell for real world, before i ever started and work back from there... yeah you'll hit homeruns sometimes but base hits are alot more common...
JB, if you want to come north, there's plenty of work to be had on Cape Cod. A carpenter who's run his own business should find no shortage of work, and can make $90k a year as a subcontractor (subtract overhead items from that figure). Much of the work is fairly straightforward, and plenty is over the top if you're interested in that.
Email me if you want more information.
Mike
hey Mike,
congrats on your article !
best wishes,Stephen
You could run the specific numbers for your houses by Allan Edwards and the other guys on the JLC site Business Strategies forum. There have been several good threads there about the economics of spec building. From what I've been able to absorb... you need to build relatively cheap and dirty and forget you ever cared about straight studs, plywood sheathing, proper flashing, good drywall finishing, nice fixtures, and the tightness of miters.
Around here I see a few guys build specs, and I've seen a few sit on them a long time as the listing price gradually got reduced until they sold. Hopefully those guys didn't have money owing on those places at 9%. A typical lot here, in town on the water system, is $70K+. Not easy to find 5 acres for less than $150K. Plenty of 5+ acres pieces with views for several hundred K and up. I'll probably never build a spec unless I meet someone with money falling out of their pockets who wants to bankroll it.
From what I've been able to absorb... you need to build relatively cheap and dirty and forget you ever cared about straight studs, plywood sheathing, proper flashing, good drywall finishing, nice fixtures, and the tightness of miters.
I've know a very few guys that have done well with specs, I've worked for a few of them and been aroound the whole thing a bit.
I'll say this in defense of the good and sucessful spec builders..........If they're building houses like you described, it's quite likely they're running the business end of things the same way, so it's no wonder they're barely making pay.
Mike Smith got caught in an economic slump. I've seen that happen often, and like someone else said, it's totally unpredictable. Now if he had built that house to live in and THEN sold it with thw upturn...........would we even be talking to him now??
I know one guy in particular, would build a house a year or two, move in live in it and sell it. I understand a lived in, furnished home is a lot easier to sell.
There are companies that will furnish an empty home for that purpose.
EricI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
Whatever you do, don't move south. Don't even think of Florida. You would not begin to imagine how few $500K homes are selling. It's real dreary here, you'd have to work year round, and fish almost every weekend.
:-)
Nice work by the way
-----------------------------------------------------------------------------
"It is so, because Piffin tells me it is."
plus we got this hurricane problem, you finish a job and then it get blown down and you have to start over.
JB,
35-45k for a lot! Were I live in MA the average lot goes for just under 300k & up!
Like Mike Maines said, You can make good money. I work alone doing mostly interior finish/exterior finish, rot repair etc. the occasional kitchen / bath. I make my own hours. I treat the home owner fair, keep my word,and make just under 6 fig.yr, and I still have time for a life! Maybe you just need to figure what the home owners NEED in your area. I stoped trying to figure out what they need, and now I give them what they want!
All Things Wood!
Stephen Prunier Carpentry
JB,
I ment give them what they want not need
Good Luck!
Great looking work on your siteAll Things Wood!
Stephen Prunier Carpentry
No wonder we get fools from MA come up here willing to spend 400K for a dump as long as it has a view
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Piffin
Anything good for sale on sebago or moosehead lakes ?
Good luck with the stormAll Things Wood!
Stephen Prunier Carpentry
Stephen,
Whats the going rate for a Carpenter in your area?
JB,
At any time on breaktime it seems like there will be 2 or 3 threads talking about essentially the same thing YOU are talking about---------
" Why won't people pay me to do what I want to do? I am good at what I do. I do quality work. Why don't people value quality anymore? How can I get people to pay me to live out my dreams????"
the guy from SP Carpentry, I believe has the simple solution. Read his post again.
I think most tradesmen complaining that people won't pay for the quality that the tradesmen wants to provide are fooling themselves. The market place doesn't owe any of us a living----and it certainly isn't set up to provide us with a lucrative occupation working at our hobbies.
I believe you described your area as a high cost area to live---and yet you say there are no jobs and it is filled with retirees.----If that is so----then I bet there is PLENTY of money about---and almost certainly a need waiting to be filled that will allow you to make lucrative use of the skill set you ALREADY have. Think about the retirees for awhile.
also-----there are PLENTY of people who will pay for quality----they just won't do it at the point in the market MOST convenient for the builder( new construction).
Instead catch 'em after they have been living in their starter castle for 10 years or so----after they are fed up with dealing with the consequences of LOW quality----bad windows, leaking roofs, worn out vinyl floors, improper flashing, rotted out door frames, leaky vinyl siding.---NOW those folks are ready to hear about quality----since it is going to be the answer to their very real problems.
BTW-----I would suggest re-thinking your web site----I don't think it is helping you out at all. I didn't find out anything about YOU, your company----nothing compelled me to want to deal with YOU-----you over-focused on 2 houses which makes me think you have limmited experience----the whole thing seems set up to appeal to YOU---but doesn't seem to appeal to a prospective homebuyer------tell me why I should deal with YOU!!!! That's what I want to know. If I am gonna enter a business arrangement worth several hundred thousand dollars----I want to know about you and your company-----after all---you are gonna run a credit check on ME aren't ya?????
I really think the answer is serving the market like Mike Maines and also SP Carpentry.
Best wishes,
Stephen
stephen.... i built my last new house in 1990.. before that we had built about 30 , each one custom... but there was a paradigm shift in the '80's... houses cahnged from custom built to commodity items
each aspect of new construction became an item to be awarded to the lowest bidder.. so if you want to compete with developers with a stable full of low bidders , it is almost impossible..
blue continually points this out in his quest to get it done faster
it didn't take me long to realize that my efforts cost twice as much as those who were subbing out all of the aspects of the new house.. so we switched to remodeling and additions.... where we can compete..
now when we don't get a job.. we often hear how the owners wish they had hired us instead of the new home builder they used..
if one is trying to compete on a commodity basis, you can't do it unless you deliver the product at the lowest price and still make money to stay in business..that means .. in the case of a new house.. your house has to have a lower cost per square foot than the general competition... your package ( state & municipal fees, land, utilities, structure, & landscaping ).. has to be competitive..
unless you are cutting corners.. it's an impossible task
speaking of impossible tasks... we've got 2' on the ground , still comming.. and recorded gusts to 70 mph...
how's about them Patriots's ?Mike Smith Rhode Island : Design / Build / Repair / Restore
Cut enough corners and pretty soon you will be building round houses. Convenient since you will be running round and round with the bankers chasing you and you chasing them, LOL
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
you know Mike, I am glad you mentioned that story again.
I have heard you tell it so many times----I bet I could tell it equally well myself!!!!!!
I didn't want to mention it 'cause I was afraid it would embarass you.
However---since you brought it up-------LOL
Anybody who reads these business threads for a number of years----- with the slightest degree of discernment----is gonna notice a few things.
1) the same questions get asked over and over
2) some people run into trouble and are confused---OR angry
3) some people always seem relatively content with their business. I could name probably 10 guys here---and your name would come out near the top of the list.
NOT because those 10 guys are geniuses
but all 10 seem to share a lot of the same traits----first among those is that they are realists.
they run into the same amount of problems everybody else does---but they don't waste a lot of energy moaning about it. They ALL seem to accept the situation as it really IS---they approach the problem in a business like fashion and they find a solution to the problem----without blaming everbody else around them.
I would bet if I named all 10 or so---they would honestly tell us that their business isn't exactly how they initially concieved it. I know from reading these threads for 6 years or so that ALL the people I am thinking of succeeded by ADAPTING, by learning to deal with the same problems that killed other businesses.
without being too smarmy----I know as a result of all that---when I run into a problem I try to mentally walk around it and view the problem from a LOT of different angles. sometimes it a problem almost however you view it.
Sometimes---from another angle its actually a huge opportunity.
Sometimes it's neither a problem or an opportunity---but rather a clue---a hint---a thread that when you---- pull reveals something I would never have concieved on my own.
BTW---only 6-8 inches of snow here. I keep telling ya---Akron , Ohio is the center of the universe!!!!!
Stephen
so , stephen...
have i got my legend down pat ? ...
or do i keep changing it ? .. get's harder & harder to remember it every year ....
lemme just say... meeting a lot of the guys here on BT, has reinforced a lot of teh things i thought and a lot of the things i do..
you included..
the biggest thing i've found is you have to run your business so you get YOUR price.. your price has nothing to do with the other guy's price.... he /she will NOT do the job the same way you will..
and your roofing anecdotes sure brought that home to me.. it's one of the first inklings i had about pricing...
you can sell roofing for $500 / sq .. just as easy as you can sell it for $125...matter of fact , easier.... because for $500 / sq.. you can deliver "peace-of -mind" to the homeowner... you certainly don't have any margin of error at $125..
i'd guess that that's what we're selling... "peace-of-mind"Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike---
I bet you have heard the expression " see one, do one, teach one" ????
"Teach one"---that's where I think we really learn . I learn a lot from reading here about other peoples mistakes-------
But the most value for me is when I try to explain here how i have done something,or how I handle similar situations-------teaching---sharing your experience forces you to crystalize your thinking---distill---get it down to the main focus.
BTW----a little off topic
but about getting your price.
finalized a sale last week----insurance company is involved. I am talking to the claims adjuster and she says they generally only pay $140/sq.
I tell her that she may generally only pay $140 /sq.---but that I was getting that much and more 12-14 years ago. " what is your usual rate NOW "she asks---I told her I don't price things per sq.----but it usually works out to $350-$400/sq. and up.
Insurance adjuster only wants to pay $140/sq.---but the homeowner is DELIGHTED to pay a price that works out to $379/sq.---and wait untill April.
Last winter I was participating in a roofing forum online---and I got beat up pretty bad when I pointed out that I routinely got $350-400---and that I was working on getting up to $500/sq.------a lot of guys told me I was dreaming---that you can't consistently do that---that the " going rate" in their area was $160-$180/sq.
But I am pretty confident I could get on an airplane ,fly to just about any area of the country where "contractors" think $180 is the going rate and so that's what they have to accept------and in that same area find contractors rountinely getting twice the "going rate"---and more.
WE set the price---not the customer---but WE have to SELL it at that price.
Intellectually----I suspect charging for estimates is the SAME---( I just don't have the 'nads to try it---and luckily it's not necissary for me at this time)
If I worked on projects so involved that they took 40 hours or more to estimate---you better believe I would be charging for estimates---and getting 'em.
BTW---why aren't you outside shoveling????
Stephen
i was... but not much....
then i went to the lumber yard to pick some stuff up for tomorrow.. but they were closed so the loaders could clean the snow out of the yard
the guys went home early because the 3 pallets of cellulose didn't get delivered today... they're shoveling out their yard too..
just another day in FairbanksMike Smith Rhode Island : Design / Build / Repair / Restore
mike,
don't shovel snow---it's bad for ya.
Personally I follow Tommy Lasordas' advice.
tommy, it seems loved to pitch BP. One day it's really hot---Tommy is out there pitching BP and his face is getting bright red. his players start to get worried thinking Tommy is gonna have a heart attack or a stroke. They beg him to take a rest and lay-off pitching BP.
Tommy says" BS---pitching BP is GOOD for ya---I never heard of a guy having a heart attack pitching BP. I HAVE heard of tons of guys who drop dead shoveling snow. Ya never hear of a woman having a heart attack shoveling snow---just guys. that's why in MY family---the wife shovels the snow---and I pitch BP"
works that way at the Hazlett house also.
Pass the Linguine.
Stephen
Stephen,
You got to be a helluva salesman. Getting your wife to shovel snow like that. LOL How soon before she pays you to shovel it?
Good job. Always enjoy reading your thoughts.
BTW. Just hung up the phone. Contractor wants to use us. Big time builder. (for Portland) Gal called in December. Says we are too high. Call us if you want some work. LOL Yeah right. LOL I'll invest in equipment, men and A/R if you will LET me work for you.
I must be moving up the food chain. Different guy calls today. Same speil. We'll see how far this goes up the food chain.
Get your price. My motto for 05
scrapr,
in practice the wife functions as the super---she "subs" it out to my teenage sons.
the son's compensation comes in the form of access to their own car,tuition paid on their behalf, beach vacations etc.
RE : the contractors contacting you.
10-15 years ago I used to periodically get calls from contractors looking for a sub to handle their roofing. I din't know much about the new construction market---so I would ask " what are you paying"
Well the contractor replies" last roof we subbed was $14/sq."
14 dollars!!!!!!!
I didn't know much---but I knew my own numbers wellenough to know that I would be better off staying home that roofing new construction at $14/sq.
The contractor who called you gave you a big clue---" call us if you want some work"
they would prefer to find someone desperate enough to work cheap.
On the other hand------if you concentrate on getting YOUR price---you will likely have the resources to wait out a slow spell.
and if you mathematically know what your price HAS to be----- it's a lot easier not to let a contractor--or a homeowner ---finagle you into a situation where you are working at a loss---in effect paying for the " privlege' of taking on a liability.
Very best wishes,
Stephen
Stephen...."But i am pretty confident I could get on an airplane ,Fly to just about any area of the country..................". Better stay where you are.
Nails----I will except that it is entirely possible that you are right.
On the other hand----it is entirely PROBABLE that there are contractors in your area getting WAY over the " going rate". Just because you don't know them---doesn't mean they aren't there---and they probably aren't working as subs---they are dealing directly with the homeowners---and possibly don't advertise at all.
when I was in highschool I had a friend---still friends actually, whose ' dad was a painting and wall paper contractor. I heard my friend and his dad " laugh" several times about the Home Builders Association------- the painting contractor knew that the best and most profitable builders were not HBA members the HBA served no purpose for them---and most people had NEVER heard of these guys----but their customer base certainly knew them.
that was over 25 years ago. Somebody might say---ya but times have changed.
Maybe
But I was at a New Years Eve party a few weeks ago in a pretty affluent neighborhood. My friends had sold another house and bought THIS house and had just finished completely remodeling it. Not my Taste---but really beautifull work none the less. They absolutely RAVED about this contractor---the work was obvious---but I had NEVER heard of the guy.
I am from the other side of town-----most of the people at the party were from the same parish as the homeowners---they ALL knew the contractor---in their circle he was well known--------I doubt very much he settles for the " going rate"
Best wishes, Stephen
BTW nails,
I did forget to mention
I have a sub that I sub a lot of the basic work to on larger projects.
I know what I pay him---he sets his own rate BTW--not me.
I know what my materials etc. cost me.
those 2 things usually total just under the "going rate"
Sub is happy---but he has no concept of what I am actually getting for the jobs.
I HAVE told him what I routinely get for certain repairs----he is incredulous---doesn't believe it's possible.
If he asked me what I get for the jobs we work together---I would tell him.
He wouldn't believe me----he doesn't believe it's possible---so for him it ISN"T possible.
But---not only possible---but the reality is that I just re-added my hours by actual count for 2004
577.5 hours production, 328.25 overhead.----- I MAY have mis-added---but i doubt it. those numbers fall well within my usuall hours that I have tracked for years.
I know my price and i am prepared to happily stay home if i don't get it.
I am absolutely nothing special----If I can do it--ANYBODY can.
the ONLY thing I have going for me is that I track my costs EACH job, I take the time to think things through in advance, and I know my number---that's it.
I am older( in this trade), fatter, slower, really not a good salesman, and most people who know me for any length of time would tell you I am kind of hard to get along with-----but I do know my numbers and that compensates for most of my defects.
Really and truly--best wishes to you,
Stephen
Edited 1/25/2005 11:10 am ET by Stephen_Haz
Stephen ....Thank you for your obvious thoughtful comments and experience.
Stephen,
Thanks for the compliment!All Things Wood!
Stephen Prunier Carpentry
In you post advocating a shift in quality craftsmen to after market work I think you have something there.Remodeling and renovating is often so complicated and nuanced a project that the big builders, the ones who make the money on what amounts to mass production of spec houses, can't do it. Theirs is a brute force approach. Hard for them to work a couple of quality tradesmen, now used to directing instead of doing, and their army of half-trained and mostly illegal, but quite willing and diligent, labor on a small job.There is money in remodeling. Some studies say that remodeling a house is usually more expensive than building new. This causes a certain amount of house hopping but the costs of financing, troublesome sales and the tendency of the human heart to attach to a house and prefer what we know.Renovations are usually more a PITA. HOs want input and options. Some of them will wisely move out or into a distant wing but most will be relatively under foot with margins between living and working spaces a constant difficulty. Yet again another reason renovation is more expensive.One thing I have noticed is that most renovations involve a lot fewer financial middle men. It can be another source of conflict but a lot of folks are doing renovations without any financing. Often the driving force behind the family living on site, saving money. Or perhaps only a simple personal loan not requiring a lot of involvement by banks and insurance. Smaller jobs can be swung financially by the tradesman. Investments in extra labor and equipment is limited. Getting paid is more a trick as the contract is less complete. the payment schedules less laid out and secured. There needs, IMHO, to be better laws protecting tradesmen doing renovations and in return protection of HOs from unscrupulous contractors. From what I have seen, discounting the very few genuinely dishonest people on both sides, a lot of the conflicts and projects that go off the rails do so because neither side knows where they stand. Lacking this knowledge and fearing getting screwed both sides come into it in a fighting crouch, untrusting attitude and a very forced smile. At the first hint of perceived duplicity one side jumps. the other side then takes this as the power grab they were expecting. Both sides, having confirmed their suspicions and original bias, leave in a huff sure the other side is a bunch of jerks.Seems a well written and nuanced law, when was the last time a well written and nuanced law was produced, and contract, same proviso, would eliminate the uncertainty and need for excessive defensiveness. If this was worked out in some way A lot of folks who have been burned on both sides would, IMO, get into the market again.I think you make a good point. The future of quality construction work and contracting is in renovations and small jobs. If the conflicts internal to this process can be worked out.
If your on your own like me, I think you can get 50-60 hr. For T&M jobs. Bid job's $? Still good.The going rate I belive for a well rounded carpenter is around 22-30hr. When I need help from time to time I use my brother and give him $200 for the day. He isn't licensed.
Hope this helpedAll Things Wood!
Stephen Prunier Carpentry
Most people want a fixer-upper in North Asheville/Weaverville or they are looking for a ranch 1/2 hr to an hour from town, but there are lots of people interested in moving to the area from elsewhere. How are you marketing it?
DCS Inc.
"He who xxxxs nuns will later join the church." -The Clash
Fixer uppers are hard to find now days. Unless you dedicate your life to finding the good deals.
FSBO. Have had plenty of lookers. some useless offers. feel like, for the price, its marketed well enough. Monthly pub. and internet site
What part of WNC?
my fiancee is a realtor here in asheville. inventories are so low that she (and a bunch of other realtors) scan the iwanna and mountainx for fsbo's every week. she has had clients in the past agree to pay commission if she represents on a fsbo. some of the sellers have, too.
if you haven't tried the mountainx, check it out, the ad rates are reasonable and lots of people respond to the RE ads. if not, i know a great agent...ha..ha.
DCS Inc.
"He who xxxxs nuns will later join the church." -The Clash
Hey, welcome to another local! Buncha friends live up near Weaverville.You saying inventories of houses for sale are low? High demand? Seller's market? Hmmmm.You ever hear of Cress Mountain...a development off Patton? Trying to verify that 350k/lot rumor.Which realtor does your fiancee work for?
hey cloud.
haven't heard of cress mountain, but if it's off patton mtn. i can see 350k if the lot is like 8 or 10 acres. i ride my bike up there all the time, great views, like all the way to tennessee. a house sold up there for $1.5M last year. it was like a 5 acre lot with a 5000 sq. ft. brick mansion (new construction) on it.
i live over by unca and things over here have about a 10 DOM average, if that. last winter at this time the market was dead, this winter is about as busy as say april or may. remodels (for me) as well.
DCS Inc.
"He who xxxxs nuns will later join the church." -The Clash
You live close to UNCA.
I live right off W.T Weaver.
Barnard AVE.
You Know?
jb - i think you know my fiancee, she had the listing on the house behind me (clearview terr.) about 2 years ago.DCS Inc.
"He who xxxxs nuns will later join the church." -The Clash
You guys fixin up a house up off of Merr. ? She sold the Yellow house with th eextra lot. You from Colorado?
yep. the guy still hasn't built on it. i don't know what he's waiting for. he could put up something quick and put more of his daughter's college pals in it with literally no cash out of his pocket. must be real patient.
DCS Inc.
"He who xxxxs nuns will later join the church." -The Clash
I'm a construction superintendent working for a builder in Raleigh NC. I've only worked for him for 3 months so I don't know all that much about his business, but I'll tell you a little. He owns 2 companies that work out of the same office. Long story about that so I won't go into it but suffice it to say one company builds $300k to $2 mil and the other builds smaller homes, town homes and small to medium sized apartment buildings. I work for the small home company which has built and owns ~1000 apartments. Re the homes, we build both spec and presales. Not sure what the ratio, but I'd say maybe 50/50 spec/presale. He has been doing this for at least 20, maybe 30 years. I was told that at one time he was doing 60 houses a year. Right now, I'd guess he is doing about 20 houses a year. I think he has at least 5 specs under construction right now, including one ~1.5 mil. I'm building 2 specs.
I don't know what his formula is for success but I can tell you he is very conservative on expenditures. Here are a few examples: 1) We have some trusted and constantly rehired subs, but there is always a lot of bid collection going on. On the apartment side, they get the subs in a biding war against each other to get the best price. For example they needed some trusses for an apartment building. one price was ~130k. The bid was awarded to a company who supplied the trusses for $60k. I was required to get 3 bids on every major trade I'm gonna use on the houses I'm building. Still I was told not to necessarily go low bid on everything - I was told to take the lowest bid on quality work. 2) I was doing takeoffs on the 2 houses I'm building - boss man looked at some of my materials lists and gave me a verbal thrashing up and down for ordering 4 or 5 more foundation vents than were required by code. They are ~ $4 each. 3) He told me to use housewrap tape for the front doors and a window which were under the front porches to save money on flashing tape which is more expensive. Probably saves about $5 per house. 4) On the houses I'm building we are buying the lots from the city on come contract he signed with them. He does not want to buy each lot until just before the house to be built is fully permitted. That way he doesn't have to pay taxes on lots sitting around. I could geve many more examples.
Let me add something though: don't think this guy is cheap - we get medical, etc benefits, and he holds events for the employees like the annual Christmas party at the country club with a dinner served, open bar, etc.
He has been a Southern Living featured builder at least a few times. Four you Yankees & Westerners Southern Living is kinda of like Better Homes and Gardens magazine for the south. I've been told by outside parties that he is well respected in the local home building market.
So as not to paint too much of a rosy story, I was told my boss man had a ~$1.7 mil spec sit for 2 years after 9/11. Also, one of my coworkers is a former self employed builder who had a few specs sit and that and a problem with his partner's health drove him under. I've heard other stories too about other small builders going under with specs sitting here in Raleigh.
I am surprised that Boss Hog has not jumped in with his spec house from Hell link.It looks like JB is doing the samething that BH did; " Little extras, nobody wants to pay for."Sounds like he is building custom homes for a spec market.
I'm thinking that some of the secrets to building spec homes is to 1) know your market, 2) know your market even more, 3) build very conservatively, 4) be financially secure enough to be able to carry the house for 2 or 3 years if necessary, and 5) be ready for some aggressive price reductions if the home doesn't sell as soon as you would like.
On the spec houses I'm building right now my boss man had figure a) the projected cost to build, and b) the minimum sales price to still obtain minimal profit (as defined by him). He set the sales price and he had the houses listed with agent before the permit was even issued.
As far as the thread you referred to, I personally think a lot of what happened was just the regular kind of stuff, but was a bit unexpected for someone who was not a veteran to the building business. As far as the house not selling I think that was due to 1) and 2) above and some just plain bad luck. Matt
Chicago,Ill.
And surrounding Burbs.
First I want to thank you for posting this. As I have just finalized the financing on two spec homes, there has been a lot of good information. I just want to add one more thing that I think the professionals missed. Retirees. I am a civil engineer doing land development. I mostly work for the big guys and I can tell you for a fact that every one of them has one thing in common. An "over 55-development". Now I am not saying that you should find land to subdivide (although that is where a lot of money is), but think about what your grand parents (or parents if that is the case) would need. Mostly on one story (Ranch with a basement or Cap Cod); Good heating and A/C system (might even invest in radiant heat); an open floor plan for when the family gathers. These guys out here are knocking these things out with 2,000SF and less and selling them for $400k+. NC is certainly different, but the expectation is not. Build it smaller & simpler and then sell the extras. (I can build you an extra garage/workshop...; ...finish the basement...; ...rip out the linoleum and add tile/hardwood...; How about a nice deck...) As was mentioned above, renovations is where the money is at. So don't install the goodies, sell them.
Brian