Electrical Forum - Custom Homes

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Subject - Custom Homes
kiwisholland	Hey, Monolith: Belated congrats on winning that custom home contract. A few questions please: -Can you wire those houses by yourself? -Can you make good money on custom homes? -If you only do 5-6 a year, would this leave you time to do service calls? I plan to focus on residential service, but wouldn't mind doing a few large custom homes per year, if I could do it by myself, and could make money. Thanks
MONOLITH	Well, I'm still only in the 'beginners stage' of doing this as my own business, but... quote: Originally posted by kiwisholland Hey, Monolith: -Can you wire those houses by yourself? Yes, but it's a matter of time vs money. I could do it all myself, if there's time in the builders schedule, and keep all the money, OR, I have one or two people do it with me, in which case I lose money, but am done quicker. One has to choose what's right for them at the time. I'm doing it mostly by myself because I am a brand new company and don't have the employees to maintain likesome of the more established guys here, some of which don't use tools anymore. -Can you make good money on custom homes? I guess I'm about to find out. I think YES! So far I have done two small additions, both priced at around $6000 and $7000. Working by myself I'm sure 60% of that was profit, with minimal actual labor hours put into the work. -If you only do 5-6 a year, would this leave you time to do service calls? Yes, definately. You're not at these projects full time. You go in for a week and do the rough wiring, then come back in a month and spend a week installing devices and fixtures, etc.I need this type of work right now, because my phone isn't ringin off the hook (no yellow book ad), so home wiring for GC's is paying the bills in between the service work that I do have. I plan to focus on residential service, but wouldn't mind doing a few large custom homes per year, if I could do it by myself, and could make money. Thanks A lot of guys around here could tell you more. Romex Racer goes thru 30,000' of romex a month, so he must be cranking out homes. But there's a difference between model homes in a development community, and large custom homes.
Wirenutz	i do post & beam, log, stresskin,as well as many 'gee i really don't know what i'd like but i've got $$$ to burn' homes kiwisholland a good year i'll do a 1/2 dz, as well as a number of renovations myself i also have all the greenlee shivs to pull in 300' UG services myself i like dividing by 1 ~W~
kiwisholland	I came from an industrial new construction environment, and do still love doing new construction. I just have no desire to and can't financially compete with the guys with 5-10 man crews roughing in 3 town homes a day for peanuts.... But large custom or spec homes, with all the home automation stuff and lots of lighting, that would be perfect to fill in empty time on my service time sheet. Monolith, I know you have gone over your technique before, but how did you hook up with this spec home builder- just call him up?
MONOLITH	I currently have two builders, both called me after recieving a direct mailed flyer I sent. One I specifically sent to the builder, the other was from a series of mailers I did to 500 homes in the area, one just happened to belong to a builder. He was very impressed with my flyer, and was looking for someone in the area. The first large custom home I will be wiring is less than a mile from my own house. EDIT IN: You mentioned "did you call them". I think that's a bad idea. Success or failure is largely about the impressions you make. I think receiving professional looking literature in the mail, gives a much greater advantage than a phone call. Humans respond internally to visual stimuli. That's why forums have these little smilies. My flyers are in color, they look really sharp. They text is well put together, it speaks a pleasant and inviting message, and it really comes across, subtlely and almost subliminally, that "you'd be crazy to call anyone else but me". The flyers give the client the ability to look it over in privacy, without someone there waiting for a reaction. They have time to think about it, absorb it. And it's working. My whole business is running on it. The phone call however, is a whole different animal. On the phone, you may be cornering someone at the wrong time. There's no visual stimuli, nothing to grab attention, just a voice on the phone. There's an immediate pressure on the client to respond, which is uncomfortable. And you and I know, everyone hates telemarketers. Calling can be an intrusion. I think my flyers are a much better way.
SR Scott	Just my two cents regarding custom homes and our past history(maybe five cents, it could get long). We've done two new pretty large custom homes over the past three years and I'm just glad it wasn't more. Many of these things we should have charged for and maybe could have controlled, but didn't. The numbers look large but please consider. First, think about the general's role in all of this: an overseer there to make sure he makes a profit and gives the customer what they want. Notice that make you a profit is not part of his job. He may be making money on the materials and an overage on subs, but his success does not depend upon how profitable you are during the process. And it is a process. Most people able to afford a large custom home are used to be catered to. They don't think of there being any limits in terms of how they might want to help it "evolve". They also tend to have friends who live in custom homes, who know a designer, friends who tune into the travel channels, etc. There will be daily tours through areas with them, and please know that these people who typically spend 90 hours per week at the office have suddenly made this house their daily job for two hours, (it is after all their dream home). It starts in the master bathroom. "Will our built-in medicine cabinets fit there with all that wiring?". They proceed to tell you that their neighbor used sconces, they'd like that and will have to get back to you with sizes on all of this. Then the interior designer walks in, he's a little late so let's start in the master bedroom. He immediately looks at the ceiling fan opening and reminds them that spacially, it isn't right, it contrasts with the theme. Three inch cans will be placed around the perimeter and coordinate with the carpenter regarding a cove we're going to be building to house some cathode lighting he saw on the internet. The general contractor looks over to you and says to have a proposal to his office tonight so he can present it. You venture out into the hallway and ask who the man is carrying the briefcase. "Oh", the general remembers, "that's right, the homeowners hired Tom from Smart Gadgets to install a low voltage automatic dimming system, "which actually makes your job easier because we wont need as many regular openings" Tom mentions as he hands you a color coded diagram. "But", he continues, "they're still a little uncertain about a few areas, we'll have that worked out this week". Okay, we've just gone through one hour in two rooms and I promise you it's not fiction. I wont continue any longer and bore you with any more details, BUT I SWEAR TO GOD IT IS THE TRUTH. So my warning is this; if you do these, CHARGE FOR EVERY MINUTE SPENT WALKING THROUGH, COORDINATING WITH OTHER SUBS, MULTIPLE CALLS FOR RANDOM FIXTURE DELIVERIES,REMOVING ROUGHED-IN WIRING, RESEARCHING NEW PRODUCTS WITH THE COSTS AND AVAILABILITY, AND TIME SPENT CALCULATING THE COST TO UPGRADE SERVICE FROM THE 320 AMP SERVING TWO PANELS TO A NEW 600 AMP SERVING THREE BECAUSE OF THE ADDITIONAL AC UNITS, WINE COOLER AND SWIMMING POOL. This is certainly not meant to suggest there's no way to make money, but please don't give your time away. I did and I regret it. Those houses cost us a ton. Don't give it away. Scott
MONOLITH	Certainly good advice Scott. And you're absolutely right. It's not that much different from some of the large commercial buildings I did, that had owners reps, architects, engineers, and even interior designers/decorators, all pulling you in different directions and looking to have work 'adjusted'. I think the real key is to do as you said, make sure any added time/labor to you is charged for. I am going to be very careful to spell out in my contracts exactly what my scope covers, and make a blanket statement about potential additional charges for the types of situations you mentioned. If we can actually get paid for some of that stuff, those 'hassles' could actually become profitable. One good thing about this 2nd builder I hooked up with, is that he builds homes first without an owner, then just sells them as is. There is none of these issues, and he says he does that now to avoid those hassles even for himself. He just builds them how he wants, then dumps them. So it's just me and him. Thanks for the good advice.
John A. Peters	Could we please have a sample of the terms or paragraph that notifies the client, that the walk-through time is billable? I could use some help here.
jcarl	hey, just found this site after being at the other one, this is much more user friendly. in regards to custom work and only being in business for a year and half, i try to anticipate the problems with designers,architects and any other person who makes the job more difficult(the spouse who can't make a decision)a lot of this time is pre built into the price and if its not don't changes without signed slips,it can be a hassle but its not for free and its not for fun.
MONOLITH	Here's a semi related question that's bugging me; Although I haven't done it yet, in the future I'm going to spell this out very specifically in my contracts with GC's... "My payment is due at the completion of my scope of work. My payment is not contingent upon any other agreements between the General Contractor and another third party." Meaning, the old thing about "I can't pay you because the homeowner hasn't paid me yet" Doesn't apply anymore. I don't really care that you (GC) didn't get your money from the homeowner yet. You paid me to perform a service, I did, you pay me now. Your business with the homeowner has nothing to do with me. Any thoughts or experiences with this? Thanks.
jcarl	monolith, all the time,in my contracts it states when payments are due. up front money when contracts are signed,on rough inspection and on final inspection. after a recent rough a contractor asked me to wait a week till he received his next payment ( he receives payments on an ever changing scedule i.e. whats good for him!) I explained that as a small contractor and it being spelled out in the contract it would be nice to be paid on time.on larger jobs you can try to work out a scedule as a performance payment, it can help if it will be a while to complete a job. hope this helps!
kbsparky	How about a clause in your contracts that adds a base charge for each change order requested Something along the lines of $100 administration fee in addition to the changes requested. Hit `em with a few of those, and that might tend to make them think twice before asking for changes here and there, and all over, etc. I got the idea from a "This Old House" episode, where the builder did just that, to keep the constant barrage of change requests to a minimum. Hey, if the builder can do it, so can we As for payments, mine specify a schedule tied to the progress of the work, and approval of inspections. And, I add this phrase to each one: Invoices are due upon receipt. Past due invoices are subject to Service Charges of 2% per month[24% per annum] + collection costs. There is no mention on whether the builder gets paid first. I don't pay my bills that way, and expect my customers to do the same.
MONOLITH	Keeping in mind that I'm still new at this, did you guys ever feel like you didn't want to push an issue, for fear the GC would just use someone else? I realize it's easy to say now, "screw him, if he ain't paying you, he ain't worth working for anyway", but I'm sure at some point you were like me, where this was some of my only work, I needed the $, and didn't want to lose the client. Yet, all day long I imagine myself going into his office, grabbing him by the throat, and demanding my cash.
sparkie2170	Although I thought they were an expensive pain in the ass, the AIA contractor subcontractor contracts are very well written. I still add some riders on them depending on the job, but they pretty much cover everything. If you go to the AIA website you can see a list.
Romex Racer	Here in California it's now illegal for a GC to withold payment because he has not been paid. When I first started out, I got screwed on that scam. I signed a contract for a custom house that said "The subcontractors shall not receive final payment until the general contractor receives final payment". Well, my final payment was $3,000 and the way the scam works is the GC is due a final payment of $50 from the owner, except that the GC never actually invoices for that final payment. I bought a CD from a construction bookstore with standard contracts in PDF format. I don't use the GC's contract. I've seen contracts from GC's that require me to pay for the portable toilet and construction cleanup... I like the base charge for extras. That's a very good idea. Whoop! Whoop!
MONOLITH	quote: Originally posted by Romex Racer the GC never actually invoices for that final payment. Heh heh. That's actually pretty clever. Rotten, but clever. I would've had to meet him in his dark driveway one late night and 'politely' ask for my money.
MONOLITH	quote: Originally posted by John A. Peters Could we please have a sample of the terms or paragraph that notifies the client, that the walk-through time is billable? I could use some help here. John, I'm actually working on putting something like this together today... I'll be back with something.