General contractor for house build

[88CRX]

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On an attached? Never lol

Yea I was thinking he's building a duplex but only hired a GC for his 'side' of the duplex. Lulz would have been in order. But I guess they're 2 separate detached homes. In which case once the property is split there are no sides. Was just a weird way to word it.

But as others have noted if he knows what he's doing he'll be worth every penny. What has be built before? If you've hired a 'handyman home builder' you're going to have a bad time. Also under no circumstances should you attempt to GC it yourself. And $40k to GC a 'custom home' seems extremely low.... in construction you usually get what you pay for.

[bjstare]

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And $40k to GC a 'custom home' seems extremely low.... in construction you usually get what you pay for.

/thread

[JRSC00LUDE]

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Yea I was thinking he's building a duplex but only hired a GC for his 'side' of the duplex. Lulz would have been in order. But I guess they're 2 separate detached homes. In which case once the property is split there are no sides. Was just a weird way to word it.

But as others have noted if he knows what he's doing he'll be worth every penny. What has be built before? If you've hired a 'handyman home builder' you're going to have a bad time. Also under no circumstances should you attempt to GC it yourself. And $40k to GC a 'custom home' seems extremely low.... in construction you usually get what you pay for.

I think it is a duplex? Being that it's a joint venture from the property purchase to completion what he is doing (paying the guy who's running the project) makes perfect sense. 40K is not an unreasonable sum or unreasonably low given the situation proposed. It a deal for OP and for the GC since it's all piggy-backed one side to the other. If GC was keeping one half and selling the other he'd expect more than 40K in his pocket when the realtor fees and other dust settled but in reality, it's just a couple months more time and not that much more "work" to manage so they're both getting value.

The partnership since property purchase is the key piece here.

[killramos]

I still think this is an excellent idea

[SkiBum5.0]

In business cases like this, you have to be ready for things to go completely sideways and have the relationship ruined. With a common GC arrangement, no big deal. But this will be your neighbour. I hate neighbours who didn’t fak up my house.

[The_Rural_Juror]

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If he's actually an established builder with experience there's nothing wrong with 40K, it's a pretty ok deal IMO. Smaller build and flip infill guys should net 10% in their pocket on projects like that. More is great, less is you're doing it wrong. 40K is less than 10% of end value I would assume.

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On an attached? Never lol

10% of cost or sale price?

[max_boost]

Consult 89coupe to make sure builder materials are quality.

[benyl]

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We are trying to keep the budget of 750k each side so with that math , typically a GC would charge around 75k.

hahah, find me a reputable GC who knows what he is doing for 10%.

Shitty ones I found were charging 15 points. Big reputable ones, more. $40K is a steal. If he is going to deal with all the trade issues, you should pay him more so he doesn't feel spite when you guys live side by side.

[JRSC00LUDE]

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10% of cost or sale price?

See below

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hahah, find me a reputable GC who knows what he is doing for 10%.

Shitty ones I found were charging 15 points. Big reputable ones, more. $40K is a steal. If he is going to deal with all the trade issues, you should pay him more so he doesn't feel spite when you guys live side by side.

Benyl, in an infill situation like this I would expect if you're the selling builder, after buying the land, building the house and clearing all expenses (these include realtor fees and factoring in GST) to net 10% min. profit on the sale. Now obviously there are other hourly billing rates, etc. at play that can/will be additional to that with each builder (especially custom ones) but as a good baseline for a spec house, that's what one should reasonably expect to net at the end of the day. Keep in mind you have several factors on these homes, such as relatively static material and labour costs and comparable neighbourhood real estate values, that affect your minimum costs and maximum returns.

Now if you're going full custom it's an entirely different ballgame and the margin is a lot better for the builder absolutely.

Just reading his situation I have looked at this from the perspective of a small time builder/flipper, that's where the spec viewpoint and the 10% direction came from relative to the 40G (which is a good bargain). If he's a small builder he's not likely doing full custom build in-house and is likely a spec seller or, has a couple real estate connections that help him find starter/entry level build clients and then partners with someone who has an assortment of canned plans that you make minor layout mods to and finish selections.

The other guy is running this project anyway and they are partners on the land. There's mutual benefit already accomplished in the land purchase. He's already got all the trade issues to contend with regardless of OP and, since other guy is living there too he'll realize his own cost savings for his unbilled expense tohis house that will (pending our economy collapsing) pay out well when he sells. 40G is a great addition to his pocket, a fair one to his property ownership partner and a sum of enough size to not cause hard feelings one way or the other imo.

I realize I am making a lot of assumptions (including that there isn't presently much of a difference between our markets), but they are the scenarios that make sense in my mind.

Will it all work out for them? Who can say. But the numbers/structure of it make sense to me.

Source? Reputable Contractor who has been involved in numerous infills.

[jabjab]

I will add some more context to the build situation here.

Last year I was looking for homes to move into but most required so much work to get to what I needed. Building seemed to be the best option but lack of land closer to the city was non existant and I knew nothing about how I would tear down and build nor had the finances to take on a project like that.

Fast forward a few months into my search I ran into my friend (known for 20 years who is the builder) and he was interested in moving into the same area I was looking in. We found a lot together and thought it was perfect but needed to get it rezoned. He had experience in this so I just went with it. We were successful in getting it rezoned and we just finished design planning for each of our sides with the company doing the plans.

Both of us will be living in our sides and both made each of our sides custom to one another.

[benyl]

I don't doubt your experience or think you don't know what you are talking about. I am just speaking from my experience and still being in the thick of doing a custom infill.

If his GC has 2 builds side by side, one will be ahead of the other, always. Unless he gets 2 framing crews, 2 roofers, two drywall, insulation, etc crews. One for each house. I watched my GC chase and chase. He is still chasing shit for me and I've been in my house since the beginning of March. I don't envy that shit. This is my backyard as of 5 minutes ago. These guys were supposed to be here before Canada day. Today is day 1 of concrete hardscape. Again, just my current experience talking and no slight to the Jr. cool Dude.

[jabjab]

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I don't doubt your experience or think you don't know what you are talking about. I am just speaking from my experience and still being in the thick of doing a custom infill.

If his GC has 2 builds side by side, one will be ahead of the other, always. Unless he gets 2 framing crews, 2 roofers, two drywall, insulation, etc crews. One for each house. I watched my GC chase and chase. He is still chasing shit for me and I've been in my house since the beginning of March. I don't envy that shit. This is my backyard as of 10 minutes ago. These guys were supposed to be here before Canada day. Today is day 1 of concrete hardscape. Again, just my current experience talking and no slight to the Jr. cool Dude.

that is rough, I know everything usually has delays. Hopefully you can get things moving here.

[88CRX]

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I don't doubt your experience or think you don't know what you are talking about. I am just speaking from my experience and still being in the thick of doing a custom infill.

If his GC has 2 builds side by side, one will be ahead of the other, always. Unless he gets 2 framing crews, 2 roofers, two drywall, insulation, etc crews. One for each house. I watched my GC chase and chase. He is still chasing shit for me and I've been in my house since the beginning of March. I don't envy that shit. This is my backyard as of 5 minutes ago. These guys were supposed to be here before Canada day. Today is day 1 of concrete hardscape. Again, just my current experience talking and no slight to the Jr. cool Dude.

Doesn't help that Calgary is totally FUCKED right now for contractors and subtrades to do literally anything.

Maybe its not as bad in Saskabush (believe thats were JRSC is located?).

[benyl]

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that is rough, I know everything usually has delays. Hopefully you can get things moving here.

My build thread has plenty of whining from me, but expect delays on everything.

I heard Alberta has no Russet potatoes and there is also a concrete shortage. But there are plenty of bicycles in stores now. haha.

[JRSC00LUDE]

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I don't doubt your experience or think you don't know what you are talking about. I am just speaking from my experience and still being in the thick of doing a custom infill.

If his GC has 2 builds side by side, one will be ahead of the other, always. Unless he gets 2 framing crews, 2 roofers, two drywall, insulation, etc crews. One for each house. I watched my GC chase and chase. He is still chasing shit for me and I've been in my house since the beginning of March. I don't envy that shit. This is my backyard as of 5 minutes ago. These guys were supposed to be here before Canada day. Today is day 1 of concrete hardscape. Again, just my current experience talking and no slight to the Jr. cool Dude.

No slight taken, just better explaining what I based my position on. Pretty useless without context

I would fully expect the GC's side would be ahead of the OP's, I know mine would! haha Cycle from here to there, rinse/repeat.

And CRX we are in a trade and material deficit here also! We're just fortunate to own a large majority of our trades so we're in a better position than many. We also are primarily commercial but do "1 a year" level of custom homes if the client and project interest us.

[88CRX]

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And CRX we are in a trade and material deficit here also! We're just fortunate to own a large majority of our trades so we're in a better position than many. We also are primarily commercial but do "1 a year" level of custom homes if the client and project interest us.

Nice. Having your own subs or at least long standing trade relationships you can lean on is key right now.

I'm doing mostly multi family residential (from the design side) and we also do '1 a year' custom homes for select clients and they're always a fee/cost/schedule disaster haha.

[JRSC00LUDE]

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Nice. Having your own subs or at least long standing trade relationships you can lean on is key right now.

I'm doing mostly multi family residential (from the design side) and we also do '1 a year' custom homes for select clients and they're always a fee/cost/schedule disaster haha.

Yes, we own our in-house full service demolition, flooring, painting, steel stud/drywall companies as well as our own site supervisors and finish carpenters so we're ahead of the game in a lot of ways.

[eblend]

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Doesn't help that Calgary is totally FUCKED right now for contractors and subtrades to do literally anything.

I can confirm. My own build was supposed to be nearing completion of the exterior framing at this point....so far...it's just wood that got dropped off last week. Heard from my septic guy that it's impossible to find crews to do anything.

[jabjab]

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I can confirm. My own build was supposed to be nearing completion of the exterior framing at this point....so far...it's just wood that got dropped off last week. Heard from my septic guy that it's impossible to find crews to do anything.

Anyone know why there is a shortage of crews? Lots of new builds or what?

[killramos]

Been living under a rock?