I’m not in the building business but i’d like to be on my own GC on my next house and have some pretty basic questions for you guys (gals?).
1) Do suppliers (a yard … either a smaller local yard or big guy like HD) typically give discounts if i select them as a major supplier? If so i assume i’d need to set up an account w/them. What kind of discount would be considered good vs. bad?
2) i think i could do my own takeoff on much of this but i’d rather have someone else — like the lumber yard for trusses, flooring, framing, … — I could see them picking up some items that i’d miss.
3) when a contractor buys these supplies does he typically pay sales tax.
Replies
1) Most suppliers give a basic discount if you have a contractor a/c. The terms and discounts vary widely but 10% seems typical and is not to be sneezed at when you consider how much you're about to spend. The big thing to go for is to get the prices locked in for the duration of the job. If you haven't noticed, the price of materials, especially OSB and plywood, is extremely volatile right now. Those Florida hurricanes are causing price changes several times a week here in BC at the oppositye corner of the continent.
2) By all means take them the drawings and have them bid on the package. Anyone decent - especially places that are contractor-oriented - will run a takeoff and price it all off in the hope of getting the entire job contract. Generally you will save money, but also they will almost certainly forget a few things too. Once again, make sure you lock in the prices so in 2 months when you go to get lumber for the decks or whatever it is still the original budgeted price.
3) Check rules in your state/province.
Have fun,
Wally
It may not be wise to commit the whole house to a single supplier, especially up front. But, you can shop around major packages. For example, all your lumber and basic building supplies is a sizeable order and could be purchased from a single yard. Windows and doors can be a separate package. Mine (for a 2300 square foot house) not including the front door and garage doors which were handmade came to $13,000. So it's easy to shop it separately. Kitchen cabinets are another element to shop separately.
Plan your cash flow. If you are working off a construction loan you get draws as stages are completed. You have to have the cash to perform each stage, then get payment from the bank. So you have to start off with a big wad of cash then keep rolling it over as each stage is complete. You do not want to be stuck having to pay a supplier before you have the cash from the bank unless you have your own money to cover it.
This also means you have to move things along. It would be really bad, for example, if you had a draw after drywall was up, and you put in the rough wiring & plumbing, insulation, and bought the drywall, but didn't get it installed (so the bank won't give you the draw) but you have to pay the plumber, electrician, and drywall supplier. Your schedule and progress can't be casual, it has to accommodate your cash flow.
Also, you say you want to be the GC, but you realize that subs will probably purchase their own supplies. Keep communicating with everyone. Everyone has to be clear about who is supplying and doing what.
good luck GC'ing ....
Jeff
Buck Construction, llc Pittsburgh,PA
Artistry in Carpentry
Bob, I suggest you do your own take-offs first. This will help you form a clean 3D mental picture of the house frame components, giving you a better understanding of what's being built (and how). You will be a better homeowner/GC for it, communicate better, maybe even see/prevent problems before it is too late, get more respect and probably save yourself money to boot. Bonus, your work will surely complement your supplier's take-offs, which means that less is overlooked. Have fun with the process.
thanks all. I will do my own takeoff initially and compare it to 1-2 i get back from a local supplier. Also good points about locking in on current prices. I'm sure these are only good for some fixed period of time -- i.e. a few months.
Less than a few months.
Also check which yards give a 2% discount for prompt payment. You can get 2% off on your entire material bill that way, just for dealing before the 10th... a lot of dough on a whole house.
Dave's comment reminds me of another point. Find out how the lumber yard billing cylce works. For example, if they close out at the end of the month, then bill a few days later, payable within 30 days, and you can delay a purchase that you would ordinarily want the 29th to the 1st, you buy yourself a whole additional month to pay. That can make cash flow easier and make the difference between your ability to pay within the discount period and save money or not.
really good points. thanks.