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The Owner-Builder Book
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.
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.
Papa Legba come and open the gate
Not everyone can do it. Especially if your work and other commitments aren't flexible enough to allow it.
"A contractor is very simply a project manager, and usually not a very good one at that."
:-) I think I will have to go with the professionals to handle the work. )
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.
~ kjrose
A nerd doesn't need a house, just a big fat T1 into his cardboard box. Pfah, homes are for wusses.
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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
It's generally a good idea to meet with as many contractors as possible beforehand, to see who can be thrown the farthest.
Step into a huge movement. Don't Tread In Me.
I am in the process of building a custom home at this time. Here are some things I've discovered along the way...
The primary job of an architect is to add design features to your home. In other words, they charge you money to make your house more expensive. You almost always DO NOT need one.
Instead, I recommend a good structural engineer. Start out with a pretty good idea of your budget, and a pretty good idea of what you want for a house (look through the $5 house plans magazines and books and free sites on the web until you think you are going to be sick).
The structural engineer will take care of the rest.
We started with an architect. $25,000 later we had house plans that we couldn't afford to build, and didn't even have the structural engineering done yet. Everything that the builder and subcontractors and permit process need are provided by the structural engineer, not the "architect".
After abandoning that approach, we purchased house plans from one of those house plan books. Only to discover that it couldn't be 'stamped' for the state we live in (Ohio) and had to be completely re-engineered anyhow. Another $1,000 wasted.
Once we got this part of the process right - the structural engineer cost us about $4,000 (to do everything).
I read a bunch of books on being your own contractor. Indeed the job description is basically that which we in IT call a project manager. I figured I'd make a go of it myself.
Then I discovered the next issue - every single material supplier and subcontractor had higher prices for me, than they did for a full time general contractor. 'Contractor Pricing' was often 1/2 of what they would charge me as an independent general contractor.
On top of that I had a really hard time finding a bank willing to do a construction loan without a trade contractor involved.
Lastly, I found the government inspectors to be very grumpy and skeptical about dealing with an independent contractor.
Therefore I was able to actually save money, as well as many headaches (there are enough already) by hiring a general contractor.
O=='=++
My parents built the house they live in now. Friends and family did the framing. A few things, like the plumbing, cabinetry and masonry were contracted out. My granddad did the electrical and Dad and granddad did the finishing.
The only way this was possible in the first place was that my parents have a good friend who is a (very good) building contractor. He sort of tutored them along. Still, there were plenty of problems. My folks paid a premium for the "best" masons, who left mortar stuck all over all the face of the brick. Dad had to spent days with a rented acid washer cleaning up the mess. The guy who laid the marble in the foyer screwed up so most of it has cracked over time. My granddad fell off the porch roof that he was shingling. Luckily his paratrooper training kicked in-- he tucked, rolled, and was fine. But mostly it was the countless little things that just add up.
Was it worth it? Certainly my parents have a much nicer house than they otherwise could have afforded. But I think it put a huge strain on my parents' marriage. My parents were able to do things exactly the way they wanted, but later they discovered that some things they thought would be really cool just weren't. (The bathroom setup though good in concept has proven to be particularly sub-optimal.) We had to live with my grandparents for a while during the construction and that was pretty hard sometimes.
Basically, I don't think my dad would do it again.
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.
_______
2B1ASK1
This book is not a typical story. I'm in the industry (structural engineer with an architectural firm) and have seen many different scenereos...many of them not pretty. Here's some basics:
If you take a typical tract home (built by an experienced, if average, builder) with basic finishes (paint, carpet, vinyl, MDF trim) and standard items you can expect $80/SF for the house and $20/sf for the land/improvements/utilities to purchase the house...we'll use this $100/SF number as a good basis number.
The contrator is only going to pay about $55/SF to build your house in material and labor. That means he's going to make $100 on a $75 investment. Remember, he'll have to pay $3-5 to market/sell, $3-5 in interest expenses, and his time and liability exposure.
You'll be competing with this guy for subs and materials. He'll probably only use one material supplier (or just a few) because HE GETS A DISCOUNT! Sometimes is overt, like 10% across the board. Often it includes perks like free job-site delivery, or extras such as a boom truck on drywall deliveries. It's only a couple of percent, but it adds up. You'll be paying full price. His subs, to whom he supplies work on a regular basis, will get to his job before yours - even if you called them first. So what - it's just time right? Well, if you're paying 9% on a construction loan, time is money.
Don't forget that you're going to need flexible job hours - often your low bidder sub (and even some high ones) aren't nearly as particular with their work when they're not being checked. A neighbor-owner/contractor had the felt left off his roof assembly by his roofer. He found out when a shingle blew off and there it wasn't! He got the roof replaced for free, but only after several weeks of arguing and calls to the building department. You don't need to be there all the time, but you do have to be able to check in on them.
Finally, if you don't understand how buildings go together, you could be in for a nasty suprise. A contractor generally started as a carpenter, and has seen lots of houses go together. He recognizes when something is not-quite-right. You won't. Trust me - you'll miss something. Did you check to see that the all the hurricane clips were installed, installed properly, and in the correct quantity before the drywall went up? Do you know what the right one looks like - there are different types!
Which leads me to liability. If you build your house and it doesn't work the way it's supposed to (it leaks, sags, cracks, or worse) you are the one responsible. Sure, you can try and strong arm the subs to fix it if its one discipline. But what if the problem is not obvious, such a coordination issue (framing to siding, or plumbing through the roof?) Normally, you'd stick it to the General Contractor - they're required in most states to warrant their work for a year. Guess what - THAT'S YOU! YOU are responsible, financially, for those problems.
Finally, if you're getting a $500,000 house for $300,000, you're doing your math wrong, or aren't comparing apples to apples. Most building products are commodity items. Same time, same area sales won't vary by more than 5% or so. You'll save the GC fee of, say, 20% to 25% of the cost of the construction, but you'll pay a little more for everything you get. That cost may be direct, such as paying $30 for every delivery or not getting the 15% volume builders discount at the Midtown Tile Hut, or it may be indirect such as the time it takes you to run around and compare prices, or wait two weeks for the electrician to get around to you because he has higher priorities.
Oh, one more thing. That lot you just paid $45,000 to buy? The buider paid $5,000 or less because he bought ten acres and cut it up into 10 lots. Don't forget the whole picture. If you "built" your house on a lot you owned and spent $120k, and the neighbor paid $160k for the identical house next door, you've just spent all your time and effort for the exact same thing as your neighbor got for signing a check. Don't laugh...I bought my 8 acres for $55k two years ago. The land next to me (11 acres) just sold for $90k. No well, no septic. The builder down the street (and a good friend, I might add) bought 35 acres of the same farm three years ago for $35k and is putting up six houses. He just bought 55 more acres down the way for $130k, and is getting about $50k for the timber on the land, then he's going to divide it up into 5 acre chunks and build some more houses.
Is it just my observation, or are there way too many stupid people in the world?
Dental Hygene: Have some. Buy toothbrush and use it regularly, yet not more than four times a day. Unless you grew up in the sewers of Calcutta, at some point in your childhood a dentist showed you how to brush. Dredge your memory and do it - If it seems to take twice as long as normal, you're probably on the right track. Try to avoid having things caught between your teeth, even if it's a hunk of CAT-5 insulation.
Auto Repair: Go to garage. Pay money. Would you trust your mission critical software to a mechanic who "plays with software?" Didn't think so...
How to remove tough Stains: Point out stain to drycleaner. They will remove it. Unless you're the kind of person who regularly spills stuff on your clothes (in which case, try to stop,) it's cheaper to pay them occasionally than to buy a whole bunch of cleaning products that will sit unused under your sink 99% of the time.
Arctic Survival Skills: Stay warm. It only takes a tiny fire to warm an igloo. Remember the fire needs a chimney hole. Note "warm" doesn't mean room temperature - It's surprisingly easy to melt a hole in an igloo, or have the whole thing collapse on you while you sleep, which kind of defeats the point of survival. If you kill a polar bear, don't eat the liver, as it has a toxic level of Vitamin A.
Fashion (in general): Fashion is designed as "planned obsolescence" without an upgrade path. Designers want you to replace everything every six months - This is why fashion changes every year. The easiest rule to avoid wasting your money is only buy "the look" the year after it's first seen. If it's going to be around for a while, they'll be still selling it. If not, then you avoided having to toss out things after six months because that's "soooo last year." You do get what you pay for, but after a certain point, the incremental return is marginal. These points are (approximatly) Shirt: $45, Pant/Skirt: $80, Shoes: $130, Suit Jacket: $450.
Men's Fashion: "Sloppy Chic" is not only out, it was never really in. Shirts should have measurements for both sleeve and collar, not S/M/L/XL. No woman on earth is impressed by your "Mozilla 1.0" Tee Shirt. It you're wearing a tie, you should barely know it - if it's choking you, either you tied it too tight or your shirt collar is too small. Pants come in other fabrics than Denim. Shoes should have laces, not velcro or buckles, and cover your whole foot. Mixing and Matching Rules: Solid+Solid or Stripe+Solid or Pattern+Solid - There are no other valid combinations. Easiest way to accessorize and match: Go to Macy's/The Bay/Marks&Spencer and buy the exact same outfits the mannequins are wearing. Don't try this at K-Mart/Zellers/Tesco. It's far easier to be successful dressing "somewhat conservitive" than "modern and fashionable." If you saw it in a magazine and the model's hair was not combed, you have almost a 0 percent chance of wearing that garment successfully. Try mixing in at most one (1) "fun" or "trendy" thing with your outfits (i.e. shirt, tie, shoes.)
Women's Fashion: See "Men's Fashion," but you have both more choices and more lattitude. If a boot comes less than 1/2 the way up to your knee, you should not see the top of it (They're called pant boots for a reason.) Don't mix clunky with sleek. Undergarments should not show through clothes. If more than 1/2 the time you're wearing the outfit is indoors, wear hose or socks. Never be seen in public in a Mu-Muu.
Extreme Sports: Have a good medical plan and life insurance first.
Gourmet Coffee Reviews: I don't drink coffee, so I can't comment on this.