Starting the Construction Process
Where to start and what it takes to be your own contractor
Construction by nature is rewarding and frustrating at the same time. There is nothing like the feeling of looking at your finished project with pride. At that point all the frustration fades into the background and disappears. You forget how earlier in the project you were staring at the footings full of water after a good rain or cursing the roofing subcontractor for being late. Managing expectations is important in a home build or improvement. No construction project in the history of the world has gone per plan with no obstacles or problems. The phrase, “twice as long and twice as expensive” started with the Parthenon. There is the plan and there is what happens to the plan when all the external factors like rain, snow, rogue building inspectors, material and subcontractor delays start effecting the job. Then there are the internal factors that are controllable but occur nevertheless such as changes and special orders. This is a phenomena coined “friction” by Clausewitz in On War. No we are not fighting a war although it will definitely feel like it at times. I have been successful in my 25 years as a contractor because I can handle friction.
A contractor or homeowner doing their own contracting has to wear several hats, sometimes at the same time. You are a designer, accountant, project manager, laborer and psychologist. It is your job to handle all these in a calm and rational manner, especially when acting as an owner-builder. The more rational you are in making decisions and dealing with people, the better your project will turn out. It is hard to be you own contractor especially when it is your house. You are emotionally attached, making it hard to look at the job through a clear lens. Workers, subcontractors and material suppliers all want to succeed. There are still some bad apples and scam artists that will pop up so have your radar on. More on this latter. Save the tantrums for after the work day. Workers and Subcontractors have a life outside of your project. They are not living your job. You will get better performance by treating them with respect. I’ve had customers call me at 10:00 at night because they were either upset at the time or it was a convenient time for them to call. Do you think they get the best performance or service from people?
Understand that construction is a problematic endeavor. There are not many “manufacturing” projects where you are making something from materials and labor that does not have a set price or completion date before you start. Take a motor home or RV as an example. They are priced from prototypes, complete when you buy them. The better production home builders get close, but each house end up with a different completed cost and schedule. Each construction project is unique and will have challenges and problems unto itself. Even the best bids for a turnkey project will change as things come up that were not on the plan or when unknowns occur.
Any project from a custom home to a backyard shed will need your attention. Building plans do not include every specification and selection. Owners involvement is always needed if you want the job to meet your expectations. To get the completed project you want it you need to be present. In many cases plans can be interpreted and you are the vision. Checking in every morning will save you problems later. Construction is a morning business. You can be a successful contractor and be on the golf course by noon. Problems happen in the morning. By lunchtime most guys are figuring out how to wrap up their day with the least problems. I’ll point out the key phases where things tend to go wrong in the following chapters. Excavation for example needs a lot of input where drywall or roofing need little.
The biggest decision before you start a project is to decide whether it is going to be a remodel, addition or a new build. Building a new house is expensive and time consuming. It will generally cost more per square foot to build new than to remodel. There are many advantages to new construction. There are usually no compromises as long as the budget has no restrictions. A remodel is a good option for saving money, but you will have to deal with the bones of the house. It is costly to change a roofline or move structural walls. Anything can be accomplished but it takes time and money. A remodel with an addition can give you the house you want in an established neighborhood. Even our backyard shed can either be a freestanding “new” building or a 3 sided addition attached to the house.
Financing is often an obstacle. New construction loans are hard to obtain in many markets and bad economies. Equity loans can be obtained on remodels provided three is enough in the home. A bridge loan can get you through the construction phase with an automatic rollover to a mortgage when completed. There is currently a government program run by the HUD department called a 203K loan. It is for purchases or refinances. The program allows the construction costs to be included in the price. There is a process to follow in order to qualify but it can be a good option. You can remodel or add to your existing home through this plan, refinancing before construction starts. This may allow you to get a better interest rate. This is not a low income program. A 203k consultant and lender work as a team to crunch the numbers and see if the project is feasible.