The Owner-Builder Book

Jeff Lewis writes: My first house was a simple tract home that did not even have phone lines in two of the three bedrooms. A few months after I moved into this first house, a friend of mine invited us over to the house they were building. For $20,000 more than I had paid to purchase this little 1,500 SF tract home, my friend had built a 4,400 SF custom home. And he had not done any of the work himself." If you're considering home ownership, and especially if you want to design in the things which ordinary houses don't take into account (here are two more related stories: one, two), this sounds like a useful resource. Read on for the rest of Jeff's review. The Owner-Builder Book author Mark and Elaine Smith pages 314 publisher Consensus Group, Inc. rating 9 reviewer Jeff Lewis ISBN 0966142837 summary How to save money by being your own general contractor.

So a few years latter when I decided that I could afford a new home, I asked my friend how he had built such an amazing house for so little. He pointed me to "The Owner-Builder Book." When I saw the subtitle to the book, I was a little suspicious: "How you can save over $100,000 in the building of your custom home." I had seen a few too many infomercials making similar promises, but my friend had done it, so I figured that I could too.

Now, a year later, I have completed building my $550,000 home for $320,000. Much of my 41% savings can be directly attributed to this book:

Chapter 1: You Can Save $100,000
Chapter 2: Learn The Wealth-Building Secret
This is the pep-talk part of the book written to give you incentive to read the next 300 or so pages. This chapter talks about how custom homebuilders know and use the ideas in this book all the time. Ever seen an ad for a "builder's own home"? Why are they always the upper-end homes? Hmm.

Chapter 3: Contractors Aren't What You Think They Are
Chapter 4: You Can Manage Better Than a Contractor
Chapter 5: You Will Profit By Building a True Custom House
These chapters dispel myths about contractors. Hint: A contractor is very simply a project manager, and usually not a very good one at that. Among other things, they rarely shop around for better material prices. They usually use the same lumberyard that they have always gone to. I saved over $20,000 just by telling my framer that I was going to purchase the materials from a different lumberyard, all he had to do was give me the list.

Chapter 6: Conquer Details Room By Room and Save 20%
Chapter 7: How to Get the Subs on Your Side
Chapter 8: How to Build a Budget That is a Powerful Miracle Tool
Chapter 9: Commando Shopping Techniques
Chapter 10: How to Schedule the Work at a Savings
These chapters talk about how to actually save money: The key points are planning, getting down the details of exactly what you want, (i.e. I want two phone outlets in every room with two strands of cat5 and coax.), and make sure to shop around. As an example, I had bids ranging from $5,000 to $15,000 for my electrical. One would assume that with 5G's you would get less than with 15G's, right? Not necessarily: for $5,000 I got everything that I wanted, plus I was able to add a bunch of outlets that I hadn't thought of at the last minute for free cause the subcontractor was a nice guy. Now I love that TV above Jacuzzi tub.

Chapter 11: How to Make Your Lender Swoon
Chapter 12: Paperwork Before You Begin
Chapter 13: Six Months to Victory
These chapters help you get the paperwork ready that you will need throughout the process. Remember contracts with liquidated damages and lien release forms! I only had problems with one subcontractor that my wife had been responsible to get fill out our contract with and had never done it. But, luckily their own contract, which my wife had signed with them, covered most of what we needed. I even got to keep an extra $2,000 dollars because they didn't have time to come back and stain the stairs. Let's see, $50 in stain and supplies, 3 hours time. Yeah, I'll take the $2,000.

Chapter 14: Smooth Execution Saves Money and Improves Quality
Chapter 15: Mistakes You Can Avoid And Successes You Can Achieve
These chapters drill into your head what planning and details mean. I had one major problem over the course of building my home. The truss company built my trusses wrong. It took them three more tries and fourweeks to get me a completed set. Because of my contracts and planning, I cut the cost of the trusses by almost half, but the time hit was the most damaging. My total time to completion was 7.5 months. I had planned for 6.

Chapter 16: If You Decide to Use a Contractor
The final chapter discusses how to choose and work with a general contractor if you decide that being your own general is too much for you.

Conclusion
Don't leave with any illusions: this book will not build a custom home for you. By planning and following through on the information in this book, you too can build your dream home.

The first page of each chapter is available online at: http://ownerbuilderbook.com/book/Ch1.cfm, and a free CD-ROM with software templates for budgets, contracts, the entire book in MP3 format, and a previous edition of the eBook in PDF format is available. You can purchase The Owner-Builder Book from bn.com. Slashdot welcomes readers' book reviews -- to submit yours, read the book review guidelines, then hit the submission page.

Comments

DIY

[Papa Legba]

Most contractors are idiots, I am glad to see this book agrees. Remember when dealing with most "profesionals" that they usually have side deals going. While they are working for you this time, they alwasy work with their people. Their prime interests are not yours. That is why they will steer you towards certain yards and certain sub contractors. Not becuase they are the best or the cheapest but because they get a kick back.

A peice of advice not mentioned, from personal experience. While the contractor and the sub-contractors may be who you deal with they are not the ones doing the work. The work crews are the ones that are acutally attaching things to other things. A $60 investment in pizza or beer dropped by the site one day will pay of huge in the long run. If the crews personally like you then they will take more care in constructing your house and be friendlier to change requests. I have seen crews who had been taken care off take all the bad material out of the construction piles (warped or knotty studs i.e.) and place them to be moved to another site for use simply because the homeowner thought enough of them to bring them coffee in the morning. They put the good materials in this guys house and the crap went to everyone else.

not as easy as it seems

[f00zbll]

To do it properly, one has to have the time and energy to supervise the construction closely. If you don't, it's easy to get into trouble. A contractor has the experience to know where mistakes are made and when to check for them. On the otherhand, if you really have the time and energy to do all that, it produces much better results.

Not everyone can do it. Especially if your work and other commitments aren't flexible enough to allow it.

Contractors...

[MarvinMouse]

"A contractor is very simply a project manager, and usually not a very good one at that."

Knowing a friend who's father built a quite expensive house. As well as knowing contractors myself. I can attest that this is not always correct. You have to understand that a contractor knows the people to go to, and generally who to trust and who not to trust.

If a contractor can save money he will, but unless he is a bad contractor (in which case he won't be around long), they won't purchase the lowest quality materials just because they are cheap. They try to find a happy medium.

Unfortunately, the biggest problem with hiring a contractor is the fact that you have to pay the contractor on top of everyone else. You have to remember though, that you are paying for the contractors time spent in arranging contracts and getting the right people together at the right time. If you take all of that upon your own shoulders, then you are also taking the stress of finding the right people, controlling them, getting good contracts, etc.

If I had the extra money, and a choice. I would hire a quality contractor (one that had been recommended to me), since I don't have the time or the strength really to handle all of the work necessary for proper contracting.

It is true though, that if you are knowledgable on prices for various products, and services, and are willing to take on the work. It is better for you to do the work then the contractor, since you might be able to find deals that the contractor wouldn't know about due to unforeseen circumstances.

In general though, this sounds like a useful book for people who are willing to put in the effort needed to handle a large project like this. (But for my future $1,000,000+ home that I am planning on buying. :-) I think I will have to go with the professionals to handle the work. )

Re:Contractors...

[sphealey]

If a contractor can save money he will, but unless he is a bad contractor (in which case he won't be around long), they won't purchase the lowest quality materials just because they are cheap. They try to find a happy medium.

Would that that were true. Homeowners contracting construction are caught in several classic game theory traps, particularly those involving information costs and public vs. private information.

And the homeowner loses every time, because they do exactly one transaction per decade with the contractor, while the contractor does hunderds of transactions per year with homeowners. Yeah, bad word of mouth can hurt in a smaller community, but when was the last time you heard of a contractor going out of business for that reason?

sPh

Amateur vs. Professional

[sphealey]

Except for certain specialized tasks (e.g. brain surgery), a dedicated amateur can almost always do a "better" job than a professional - because the amateur can value his own time at zero, and ignore issues of profitability and sustainability.

Basically, this book is saying that if you have the skills of a project manager and the time, patience, and persistence to act as your own general contractor, you can save money and get a higher quality house.

No doubt true - IF you have those skills, if the plumber who used to beat you up in high school can't still intimidate you, and if you have the time.

You also need to consider, however, that most contractors/subcontractors in a given area form their own community, and generally will work together to take advantage of any "lone wolf" outside the system. You will also have a difficult time figuring out, e.g., who the good HVAC contractors are vs. the rip-off artists. This is something the general brings to the game that you can't duplicate.

Anyway, have fun!

sPh

Re:Not enough phone lines?

[Jucius Maximus]

"The best advice I have heard is to put plastic PVC pipe in the walls from a phone closet (or at least a central point) when your home is built for your phone and cat-5 runs. That way phone, fiber, cable, more cat-5, etc. can be run with a lot less difficulty."

Here is a strategy that I think is even better than this for running cat5 and such:

The people who install home security systems tend to be extremely skillful about putting wires through walls. If you are getting a home security system, these people can often put your networking equipment through the walls for a small surcharge, and do it with much more ease than you could yourself. This was how the home my family bought, which was 30 years old and had exactly 2 phone jacks in it, was increased to 22 jacks over 2 lines plus cat5 in all the bedrooms, living room, rec room, plus coax from the satellite in a couple of the bedrooms and rec room as well.