Does being my own general make sense?

CamGJune 21, 2012

Hi all,

My questions never end and your patience with them is incredible.

We're now to the point of deciding between using a general or subbing our house ourselves. I've encountered a number of subs who insist this is a good way to go, that they would give me their discounts, etc. (Biased sources, I know.) But I'm also friends with the manager of a contractor desk at a big box store w/ an outdoor lumberyard who works with owner-builders routinely, and who thinks this subbing out one's own home would work pretty well.

I'm no construction professional, but I've done just about every part of a construction, from framing, plumbing, wiring, flooring, etc. My parents built most of their own house and were their own generals on another house a couple years ago.

If I were to sub, I know that we would loose out on some efficiency and a general's discount with subs and suppliers, but of course I would save on the general's cut. I was also planning on doing some of the work myself--I can do a good job roofing, siding, painting, installing the laminate and vinyl flooring, hanging cabinets, etc., and I have a decent number of family and friends who would work for short periods for pizza and beer. I wouldn't want to do much else, such as framing or drywall, because I think I don't think I could do a professional job.

For background, this is going to be a relatively inexpensive house with lower-grade finishes--for my very simple 2,200 square feet two story house, I've received quotes between $175k and $190k from generals. The materials, if I bought everything I could at the above-mentioned big box store, would come out to about $75k, not including labor, foundation and flatwork, and hvac. Of course, without knowing my market, this probably doesn't tell you much.

Maybe this is an unanswerable question, but I'd love to hear any thoughts on whether I should get a GC or do it myself.

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Are you on a timeline? Do you have a day job?

    Bookmark   June 21, 2012 at 6:12PM
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Are you paying for this out of pocket or will you need a loan? If you need a loan, have you spoken with the bank about being your own GC?

    Bookmark   June 21, 2012 at 6:39PM
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I'm doing a sort of combination of using a builder as a GC and subbing out some of the work myself and having family help with a few things along the way (my brother in law is a roofer, and used to do tile, my stepfather has installed many kitchen cabinets over the years, that sort of thing).

Our cost to build is in the 500k range, and I do have a full time job and our house will be around 3000 sq ft.

The builder's team (without subs) is doing the foundation, framing, drywall, and he is subbing out electrical and plumbing, and I'm sure a few other things that are over my head.

I'll be subbing out a lot of the finish work that the bulder doesn't do himeself (or I can get done cheaper than what the builder chargers) that includes roofing, tiles, floors, HVAC.

We are also buying many items ourselves (windows, doors, lighting, cabinets) though he does have some suppliers he suggests where he gets better rates.

    Bookmark   June 21, 2012 at 7:25PM
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I would never be my own GC. I'm sure it's possible, but I wouldn't want the stress. I'd rather have a smaller building budget and let someone more experienced handle the day to day problems.

That being said, I would be checking progress each day and would be available for any questions or changes to the plan...but I would want to have someone who is ultimately responsible for the project, besides me.

Also, I'm one little project to these subs...but the GC could/might use them on many projects. Who do you think they'll show up for on time and stay until their job is completed? And, who do you think they'll disappear on for days/weeks/months at a time, before coming back to finish?

    Bookmark   June 21, 2012 at 7:50PM
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With respect to background, it sounds to me as if you're about as prepared to be your own GC as anyone. I know there are folks on this forum who will insist that you should "let the professionals do it" but...

As far as I know, there are no colleges or trade schools that teach how to be a general contractor. Nor do I know of any formal apprenticeship programs anywhere although there may be a few somewhere. Many states don't require that GCs even be licensed. Some require a license but getting one is a matter of sending in a form with your name and address, a signed avowal that you don't have any felony convictions, and a small licensing fee.

That means pretty much every "professional GC" out there learned on the job. Many of them started out as laborers in a particular branch of construction, decided they could run a business in that branch for themselves so started up their own painting/framing/roofing/foundation/whathaveyou business, and from there branched out to general contracting.

Basically the GC's job is to keep the work flowing along, he pull permits, secures insurance, schedules inspections, hire subcontractors (and, IMHO, SHOULD make sure the subs work is done correctly), order materials and make sure they're on site when needed, handles the cash flow, and keeps records.

If you need financing for your build however, you will need to find out if your bank will work with an owner-builder. Many won't. A few will. If your bank won't work with an owner-builder, find out what you must do, if anything, to get licensed as a builder in your state. Then set up a "building company" and contract with your own building company to do your build.

As for whether it is a good idea to be your own GC... ARE YOU AN ORGANIZED PERSON? Can you keep up with names, addresses, sales slips, bids, contracts, warrantys, timelines, material's lists, etc. Do you know how to make and use spreadsheets? Are you willing to spend time learning everything you can about housebuilding? Are you willing to spend time checking references of potential subs? Are you willing to spend time everyday at your site checking the work of subcontractors and keeping up with use of materials so stuff doesn't "walk off" - at least without you knowing it? Will your real job suffer from neglect while you build? Can you be tough when necessary without getting emotional? Can you deal with people who lie to your face without losing your cool? Have you ever fired anyone? Have you ever run a complex project of any sort? Have you ever supervised a dozen people all at once?

If you can answer yes to the above questions, I'd say go for it. It sounds as if you have a support system in place (parents) who can help guide you thru the order in which things need to be done and figuring that out is one of the more intellectually difficult parts of being a GC.

Having worked in many phases of construction yourself, you probably know enough to at least be able to tell when most jobs have been done correctly but you might look into hiring a GOOD third party inspector with experience inspecting new builds at various phases.

Getting subs is NOT that difficult and my experience when I took over GC-ing my own house after firing my sorry-a55 builder was that subs/suppliers were as willing to give me builder discounts as they had been to give them to my builder. After all, unlike my builder, my credit scores are good and I was willing to actually PAY for materials when they were delivered and pay the subs as soon as the job was completed. And the money I saved stayed in my pocket instead of going into my builder's.

I found that the most difficult aspect of getting subs was getting them to actually show up when they said they would. When you're a homeowner building a single house, subs will often put off finishing your job in order to go start a job with someone else. Basically, they want to "lock in" all the work they can and they figure that once they've started your job and have some of your money in their pocket, you have no option but to wait for them to finish the job.

The way to handle that is to make sure they never ever have any of your money in their pocket and that your agreement with them gives you the right to rescind the contract without notice to them and hire a replacement if they fail to show up. Email me and I'll send you a list of the terms that I started insisting be into every Sub's contract when I got fed up with being the "lowest priority job."

    Bookmark   June 21, 2012 at 8:04PM
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bevangel hit the nail on the head perfectly! :)

I actually have a builder on record who is looking after the majority of the items, but then others I am managing and it is all worked into the contract in a way that is both legal, and approved by the bank. Saving his 10% markup on windows, roofing, tile, cabinets/installation, flooring, painting and whatever else I deceide to manage is going to save quite a bit!

Here are some resources that I've found helpful:

Carl Heldman wrote a book called: Be Your Own House Contractor: Save 25% without Lifting a Hammer and he also has a website with some great resources and tools!

Here is a link that might be useful: Be Your Own House Contractor

    Bookmark   June 21, 2012 at 8:34PM
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Thanks for the thoughts everyone.

I do have a dayjob, but it is fortunately very flexible. We are not really on a timeline, only need to finish construction within one year to comply with the covenants. I've already spoken with the bank and I won't have any trouble with financing due to my being the GC.

I'm glad to hear that others who have pulled this off without regretting it! This is a tough decision. Thanks for the link, Laura. The build isn't to start until spring, and I've pretty much narrowed down my floor plan, so it's time to exhaustively research this process.

    Bookmark   June 21, 2012 at 9:01PM
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Happy to help!

Do you mind sharing the bank you are financing with? Anyone national?

    Bookmark   June 21, 2012 at 9:19PM
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Laura, no one national. A great local bank with a history of working with my family and financing these unconventional kinds of projects.

Bevangel, terrific ideas. I hadn't considered hiring my own inspector--a few hundred dollars here and there and I could discover problems before the city inspector shows up (or before I eventually discover the problem after that statute of limitations on the work!). Luckily our building site is only a few minutes from our house, so daily visits wouldn't be much of an inconvenience. I think I can handle the rest of the considerations you've raised.

So I think this is an issue of the amount of time I would spend versus the money I would save. Since I'm a young attorney, and my wife stays at home with our son, our income is still relatively low. As such, even this pretty modest house is right at the limit of what we can responsibly finance, and saving 10% on the project would leave us very comfortably within the budget. But for the current interest rates, I would let my income increase for another year or two, and then hire a GC without question... but I think we would be crazy to pass up any chance at financing our (hopefully) long-term house at these rates. So that's what makes this tough. Thanks everyone.

    Bookmark   June 22, 2012 at 6:12AM
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Aren't you already working 70-80 hour weeks as a young attorney??? Don't know what has happened to the work ethic among young people these days. LOL!

Seriously, do keep in mind that your legal work could easily heat up just when you most need to be able to take some time off to deal with the house. Is your wife willing to be your back-up or at least your eyes and ears when you can't get out to the build site as often as you really need to? Unless she is naturally pretty assertive, it might be better if you handle the actual hiring/firing of subs b/c far too many men working in construction are neanderthals who just don't like having a woman giving them instructions and get their backs up if a woman dares to do anything more than tell them how great they are. But that wouldn't stop your wife from being able to do the daily inspections and report back to you re anything that looks problematic. But, she has to be willing to learn what to look for. I actually think women can be VERY VERY good at this sort of thing because they're often more detail oriented than men and, for them, the house is their NEST and they want it done right!

As for hiring an inspector, a really good code inspector will do more than just help you discover problems that could keep your home from passing city inspections. As you probably know, city inspectors just look for major code violations that would make a building potentially dangerous. They're not concerned with making sure that your plans are actually followed or that the builder followed best practices as he built. But you need someone with more experience than the typical real estate inspectors who comes out to look over a house prior to resale.

You want someone with knowledge of building codes and at least some building experience. The inspector I hired caught things like walls that needed additional bracing, joists that needed to be replaced because holes had been drilled thru them that were either too large or too near the edges; window and door framing that was not square and true, improperly flashed openings, missing electrical outlets, unprotected plumbing lines in places where it would have been easy to drive a nail when hanging a picture, improper framing of my staircase, ceiling light boxes that weren't properly centered in rooms, etc. My inspector was well worth every penny I paid. The link below is to the guy I hired. Unless you're in central Texas, you won't be able to use him but his website should help give you an idea of what you should be looking for in a home inspector.

Here is a link that might be useful: Code Inspector

    Bookmark   June 22, 2012 at 9:18AM
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CamG, sounds like you're in a very similar situation to ours. We purchased an unrestricted lot (in terms of builder choice/house plan) this spring and I'm in the process of designing the house now. Hoping to build next year as owner-builders.

My father in law is retired, but had a career in construction doing both general and sub contract work. Personally, I've spent the last ten years in my first home remodeling somewhat extensively on a very old house. I feel that I've learned enough to oversee the 'pros'. Our new lot is just 15 minutes away and I as well have a somewhat flexible schedule and family that's interested in helping oversee things.

It's VERY stressful, but also very exciting. By designing and GC'ing our own house we're hoping to really get almost exactly what we want.

I'll second the recommendation for Heldmann's book. It's a simple, concise book that goes over the important major items and phases of this sort of project. I'd also recommend his website, which includes this link, to his free eBook

I've found that the free book has most of the information that the print book has, though I haven't done a deep comparison.

    Bookmark   June 22, 2012 at 10:47AM
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Bevangel I cant say it better.
My husband and I are currently building our home/farm. This is a big project and my husband is not the organizer, he works his own business-high stress job. I also work in the business part time-flex.
I am the primary organizer/designer of this project and things have gone smoothly so far with a few hiccups. None of the problems could have been solved by a separate GC- that person would have had to come to us to have decisions made.
My problem has been dealing with the people we've hired who were once GC's and we are not utilizing them in that capacity- They like hearing from my husband. Once they understand that I am OK to make the decisions they have been fine. Once it was proved that I could solve a problem and really could swing a hammer....
We are taking our time with this house but currently are having the issue of keeping the subs getting the project moving forward in a timely manner. Everyone elses job is a higher priority. This week heads may roll...
Be prepared to research everything, We have had alot of help from the township inspector, first one retired and the new one has been great. But everything questionable has to be written, documented and put in the file. This has been time consuming, we are using new to our area components on this build, so it is show and tell.
This has been a more than full time job for me. My husband can and is doing some of the hands on work on the weekends. Exterior window trim, deck, we will be doing all finish work inside once drywall is in. The problem is not that we cant do it -- it is now the time involvd. My husband is very accomplished and could do this for a living and that is the issue. Finding subs who will do things better than he can for a reasonable fee.
Cam -you can do this but it will eat up your life and test your family. Your wife has to be Full Partner in the project. As in she's probably not going to have time to get her nails done. You have to be super organized. We did our first house 20+ years ago when our son was a baby. We've done several homes since as weird way to fill our free time. It's all been good but let me tell you this will be the last house I do and I cant wait to start/finish the barn/fence/farm/landscape part!

    Bookmark   June 22, 2012 at 11:03AM
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remember that code is the legal minimum you can do.
incorperating better building practices will cost
a bit more upfront..but benefits are long term.
things to upgrade above code
would be (short list)

hvac. there is a reason the hvac mfgs jumped from
10 SEER to 13 SEER as minimum efficiency. upgrading
to 14-17 SEER is a good investment. if all electric
consiter heat pumps.
mastic seal only. no duct tapes, no foil tape.
correctly sized hvac..load calcs to determine size
duct sizing and design.

insulation package. adding a 1" foil/foam sheathing
board to exterior of walls, taping all seams and sealing
any holes will allow insulation in walls to perform
its rated R-value. follow up with sealing sole plates
to slab & sheetrock with air tight drywall will eliminate
air movement in walls.

recessed lights ...ICAT only. insulation contact air tight.
about $20 more per case of 6, but $15 per light for air tight inserts.

don't oversize stove vent fan. people are causing all
kinds of issues by installing 1200 cfm fans. unless you
are feeding a huge crew daily..keep it reasonably sized.

a good resource is
look for info specific to your climate.

best of luck.

    Bookmark   June 22, 2012 at 8:04PM
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I too have been toying with the idea of being my own GC. I'm extremely organized and know exactly what I want (have been planning my new house for the last 6 years)--that said, I have no construction experience. My general outlook is that it is not rocket science. I would definately hire an inspector to come in after each phase. I am worried that I will have trouble finding quality subs and also getting the work done the way I want in a timely manner. Is anyone willing to post a schedule as to what happens when (or should happen) to keep a job flowing as smoothly as possible? Just need some general guidance from anyone who would be willing to share pitfalls to look out for and like I said a schedule. Thanks!

    Bookmark   June 25, 2012 at 11:50PM
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