Sure it's "possible". But you won't save any money.
If you want to learn how to build a house, and are willing to do it in real time with your own money, go ahead.
An established GC has reliable subs who give him the best prices, as well as scheduling priority. A good sub isn't hurting for work and would prefer working with an established professional he knows, than an ignorant noob who he will have to take the time to educate, plus he doesn't know how reliable you are about paying your bills. So if the subs charge you ten percent more, and then with your own screw-ups you cost yourself 10% in mistakes and omissions and do-overs, then there goes your savings.
I have done it more than once. But then I have a degree in architecture, worked as a structural designer, a project manager and an on-site superintendent. If you have to ask :"can we" or "is it possible", then no you should not. If you have to ask, the answer is no.
Reply to NG only - this e.mail address goes to a kill file.
This is not quite what you wanted, but sort of on the same direction. At this custom house builder:
they have a program that might appeal to you.
(NOTE: I've never dealt with this company. I simply found their web page when searching for something, and recalled it when I saw you post).
Perhaps someone in your area has a similar program. They talk about it in the FAQ, but before I get to that question/answer, let me give another, since they use the term ArmSystem in their answer, so that needs to be explained first:
Q: What is the ArmSystem(TM)?
Armstrong has been building quality custom homes for over 50 years. Blending your budget, property, and design to give you the very best in custom building is what the Armsystem is all about. The entire project can be handled by our trained professional staff, from start to finish, including all those special little details that makes your house your home. A home that not only reflects the outstanding quality framing methods of the Armsystem, but also reflects your taste and lifestyle, just the way you want it.
ArmSystem is built in sections at Armstrong's manufacturing headquarters in Auburn, Washington, using the Off-Site Construction Method. Then it is installed by the Certified Professionals to ensure the industry leading warranty up to 10 years for peace of mind.
They can do the traditional method of home building:
Q: ArmSystem Turn-Key Program?
Turn-Key means you don't have to do anything with building of your home. You just let us know what you want, and we will make it a reality. We, literally, give you a key when we finish the construction.
But they also have a program that might be what you are looking for:
Q: ArmSystem Owner-Builder Program?
With this program, you get to coordinate part of the construction process, thus, saving you money. The conventional owner-builder programs are geared towards Do-It-Yourselfers where you have to put in the labor (or the sweat equity). But with the ArmSystem» Owner-Builder Program, you make the phone calls! Of course, you can paint, or install the cabinets, or build a deck... to save you more money. But we install the ArmSystem» of your home with our certified professional, so the hardest part of your building endeavor is done by the time you start calling your electricians and plumbers. On average, ArmSystem» Owner-Builders are realizing the instant equity of 10 to 35 percent!!
(Snip) Sounds like the old shell-home concept, except with modular units.
I grew up in the business, have a fair grasp of most of the trades, and I wouldn't try to be GC on my own place. Maybe if I was retired and had time to be on the site every day, and be available to be on-call when questions and problems arise. The objections everyone else raised are quite valid- all the subs will consider an owner-builder their lowest scheduling priority, and be very wary about dealing with someone clueless. So, yeah, it's possible to do what OP proposed, but it will likely take longer, and not save very much. And expect to have a real hard time getting financing, since most banks consider owner-built a high-risk loan. A painfully high per centage end up being walk-aways or require lots of fixing to pass inspection.
(I lump owner-as-GC in with owner-built, since almost everyone has to sub some stuff out.)
But if OP isn't in a hurry, and can self-finanace- what the hell, go for it. It'll be an educational adventure.
I'm not sure what the distinction is, but they seem to consider themselves different from modular units:
Q: Is it a modular? Manufactured?? Mobile???
NO, NO and NO!!! Armstrong is a complete custom home builder. That means everything is CUSTOM! The ArmSystem utilizes the Off-Site Construction Method. With our Off-Site method, the walls are assembled into sectional panels just like the On-Site method But the difference is, with On-Site, the weather and site conditions vary from day to day causing the walls to be out-of-square and exposed to rain. But with our ArmSystem.
(I hope the people who build their houses are better than the people who build their website. That last sentence fragment is from their site, not an error in my transcription).
We have an outfit nearby that does something similar. They prebuild all the frame walls in a large building, stage the entire building in an empty field nextdoor and truck it out to the site. I would think actual site construction is just a couple of days rather than a couple of weeks for typical framing.
That obviously means the framing plan needs to be good, but I suspect the overall cost isn't that much more. Material delivery is about the same, labor is the same or less. Quality can be better in a factory than on site.
They typically have a dozen or more buildings being staged, so buisness must be good.
I have endured more than one sales pitch for panelized building. It have seen other builders (usually commercial) using them, and one day I'd like to try them. But I'm still a skeptic. Basically, what you are saving yourself is the wall building, which as a percentage of time spent on a project is very small. You still have to set trusses, run subfascia, sheath the roof, etc. Although you can frame a building somewhat faster, the cost savings are offset by needing to have several days worth of crane time (big crane too, probably going for 200 bucks an hour) and needing to truck the panels to the site (you have to ship a lot of air with the panels, so a lumber pack which would fit on one truck is going to take several). I don't believe the malarky about them being more square and straight...the builders I talk to who have used them have more swoops in their walls than conventionally framed houses. When my crew frames a wall, it will be within an 1/8th or usually less of square--I haven't checked prefab panels, but it's hard to see the advantage in quality. Provided you have decent carpenters, the quality of your walls is going to depend on the quality of the lumber, and we're all in the same boat there. I'll bet you the panellized outfits aren't going through and picking the straight studs out of a unit. then you have the problem of fitting the house to the foundation. Pretty common for the masons to get things out of whack, especially when dealing with stepped footings which are common where I live. If your foundation measures, say 36-1, and the panels are 36, what do you do? Fix it, sure, but there goes yet more of your labor savings.
There were a couple of projects going up next door to my projects last summer, built of panels by a company who had earlier given me a hard sell. That was quite entertaining to watch--took longer to frame their projects than my conventionally framed houses. There is a very good reason why sheathing should not be put on the rafters before they are set! They gave the sawzall a workout more than once. Plus the lumber pack was provided by the panel company, and guess what! they were short of vital roof framing material! Some mornings you'd show up and listen to the foreman bitch about waiting for a load of panels. I suppose it's best not to judge every panel company by that bunch of jokers, though. Panel building has been around for a long time, and time will tell whether it's the way to go or not. But framing a house is really a pretty small part of the whole process, and although it sounds good in a sales pitch, a house is a hell of a lot more than framing.
(snip) and time will tell whether it's the way to go or not. But
As a kid in Indiana 30-some years ago, when of big apartment complexes were going up, a few of them tried the prefab panels. Seems like an ideal app- 300 to 600 repeats of same basic floor plan. But since even a short wall gets heavy fast once skin goes on, on a 3-story 4-entrance apartment building, you end up having to fly them all in with a crane. I guess they found crane time cost more than carpernter time, becaise within a few years I never saw it again.
A prefab panel system I might be inclined to ponder would be those foamcore SIP panels, like they showed on TOH a couple of times. You can't make those on site.
Right. The wall framing itself is the least of it. If I can put up a superior shell, complete with superior insulation and a completed 100% fastenable interior wall surface, then that's the way to go. Modular housing also makes more sense than panelized.
I always thought that a problem with sips was getting them to fit together. Easy on paper, but unless your foundation is dead flat, it seems like a good fit will be a struggle. I saw a new commercial building one winter that had the roof framed with sips. I wasn't impressed with the melt lines at the panel joints. Also, wiring and plumbing penetrations are liable to be interesting. I suppose I come across as a stick framing neanderthal, but both sips and panel houses have been around for 20 or 30 years. Given the price pressures in residential construction, when a method that is better-faster-cheaper comes along, it will make its own way into the market.
There are pros and cons to each option. Right now I am in the middle of a major remodeling in my house where I decided to be the General Contractor. I am saving a lot of money in the process. At least 30% of the average price some GCs quoted me. And I am not even including the "change orders".
It is a very wrong assumption thinking that a GC will "take care of everything" and "everything will go fine" by working with a GC. I know of several "terror stories" and "bad experiences" of people working with GCs, even building expensive high-end homes.
Get a very good architect who can make detailed drawings of your vision and the necessary specifications. Go the the local "Better Business Bureau" and check the companies and services you wish, as a start.
Another misconception is the one that you may not get the best material prices. Well... GCs and Subs overcharge you anyways and nowadays you can get very good deals in Home Depot, Lowes and over the Internet. For example, Home Depot and Lowes have a promotion of 10% discount on your first purchase with their credit card. Get one for you then later another for your wife, etc.
Pros
- You have the flexibility of changing your project without going through a contract renegotiations or "change orders" with the GC. Actually, Change Orders are where they really get you since you are on the hook with them. Actually, this was confirmed by more than one GCs (some retired) I talked with. Of course, you may have to renegotiate the changes with the subs but they are way more flexible and sometimes will not charge you for the change if you tell them in time and it is not something major (for example, adding an extra window - provided you buy it - or changing the location of a door).
- You have more control of the expenses since you are seeing each sub's costs. With a GC you only see the whole cost.
- If you are handy and a "do-it-yourself" type person you can save a lot of money, assuming you will treat your home building as a "rea job". It will take a considerable amount of your time if you want it done right.
- No "change orders" where GCs usually overcharge/overprice since it's where they make most of the money and they know they will come because some things only show up when you have the house being build or remodeled.
- Did I say you save a lot of money? :-)
Cons
- It will take a lot of your time, both managing the subcontractors and studying codes, construction techniques, etc. And you will have to discuss them with the subs explaining very clearly what you want and what you do not want.
- You will have to deal with the subs on your own and have very good Project Management skills to make sure materials arrive on time, subs finish their part on time and clear the site for the next ones, arrange the inspector visits and deal with them (in my case they have been very nice and helpful), make sure you have a good insurance policy, etc.
- You may be put in the end of the line by the best subs since they usually give priority to the GCs, who keep bringing jobs to them, as other posters mentioned.
It has been a very nice experience for me and I've been learning a lot. It is not as difficult as some like to portray as long as you choose your subs well, dedicate time and patience to the project and you do a good chunk of the work yourself. In my case I'm doing/did all the electrical, most of the plumbing, all insulation, painting, installing doors, trims, etc. All of them, so far, passing the codes and approved by the inspectors. I hired subs to do the framing, drywalls and very likely tiling. And, by the way, I could also buy some very nice tools during the project! ;-)
Nice post, Rookie. The point that stood out for me is the inverse relationship between the quality of the drawings and the required experience of the contractor.
What stood out to me was that there was no mention of the value of the owner's time. Invariably these sort of posts make no mention of determining the value of that time and don't acknowledge that it is a real cost that should carry through to the bottom line. It's akin to figuring a time and materials job and putting zero value on the time. Do not ever put a zero dollar value on anyone's time at any point. I am not saying that it can't be done, or shouldn't be done, but don't fudge the numbers going into the project. That never works out well.
If anyone is serious about doing something like this, don't pretend that reading a lot and good intentions make up for experience, nor that your time has no value if you are working on your house. It might make more sense, depending on your particular situation, to set up an S-chapter corporation to build your house, hire yourself and pay yourself wages, deduct the tools as a business expense, etc. That of course depends on a lot of factors, such as licensing laws. If you put zero value on your time, and you sell the house, you have made a major impact on the base cost which will have a major impact on your capital gains tax liability. Someone should not attempt a large dollar project like building a house without consulting an accountant that has knowledge of the tax implications _before_ you do anything else.
You can't be serious. If you pay yourself, you're taking your own after tax money and recycling it back through the tax system. Not only are you going to pay income tax on the wages your paying yourself, but also social security and unemployment insurance. It's highly unlikely that is going to be offset by writing off tools or other expenses. Plus, the IRS does not allow a homeowner to assign a value to labor they do on their own home with regard to capital improvements. I would think they would take a dim view of an S corporation, set up to skirt that, especially one that is running at a loss.
That of
In most cases this is a non-issue. The first $250K in capital gains is exempt from tax for singles, and $500K for couples. So, the house would have to appreciate a lot before there is any issue at all. And beyond that, the rate is only 15%. So, if he saves 40K doing work himself, on the slim chance he exceeds the limits, he only winds up paying $6K in tax someday in the future. Meantime, he's got the 40K.
You don't see a difference between saying it will take a lot of time and putting a dollar value on that time? How about the completed house's cost tax basis affecting tax liability years down the road?
Don't misunderstand me, I think Rookie's post was just fine on almost all points, but, as usual in almost all such owner-builder anecdotes, the owner's time is relegated to little or no value. Certainly no dollar value is used, and that is a major oversight.
No matter how much enjoyment someone will get out of building their own home, it's better to do it with eyes wide open so good decisions can be made. Not just the decision about whether to attempt building the house on their own or not, but also about how to determine if the owner should even attempt some of the specific aspects of work that a pro could complete far faster.
I digressed from my main point that the value of the homeowner's time should be calculated as there is no such thing as "free" time. I got off point, gave an example that may or may not work for some/most people, and you are right to call me on it. In my defense, I did include _lots_ of weasel words! "It might make more sense, depending on your particular situation...", etc. I have not done the S-chapter thing, but a contractor buddy got started in construction in just that way. He'd messed around enough on earlier homes that when the time came he decided to set up a business and start with his own house. He said it worked out very well for him on a a number of levels.
He's got the 40K "savings" and how much time did he put in to earn it? Would he have earned as much or more putting in those hours in overtime at his regular job?
It's pointless to argue details for a specific case, as everyone's situation is different. I am pointing out that there are a lot of intangibles and hidden costs that must be taken into account if someone is doing something other than pretending to understand what's involved so they can proceed with building their house. If I mentioned the increased risk of getting hurt traipsing around on a job site, some might counter with with, "I have insurance." That does not offset the increased risk. Similarly, all the things you and I have learned over the years, some learned the _hard_ way, are not included in books, anecdotes or covered by an architect's once a week visit. And let's face it, the type of person that looks to be their own GC to save money will rarely spring for the architect's paid site visits at $125 a pop (or whatever). Rookie didn't mention an architect in any capacity other than preparing "very detailed drawings." Have you ever seen a set of plans that didn't have errors and omissions? Me neither.
People point to change orders as being a contractor's way of gouging the homeowner. Obviously that does happen with some contractors, but that's the contractor, not the change order mechanism. If an owner wants to move something, that change can cascade back through the construction process, requiring existing work to be reworked to allow the change. It also can interfere with the scheduled flow of work. It's a disruption. People charge for disruptions. I know I am preaching to the choir, and you are well aware of how it works, but a newbie owner-builder probably doesn't. They're thinking, "Well, hell, just pull out that one, add a trim piece and put in the new one. How hard can it be?"
Rookie wrote: "Right now I am in the middle of a major remodeling in my house where I decided to be the General Contractor. I am saving a lot of money in the process. At least 30% of the average price some GCs quoted me." Out of curiosity, do you count up your profits before the job is over? You're well aware that the things at the end of the project - all of the _visible_ things - can eat up profit at a tremendous rate.
There was another proud owner-builder (Rookie this does _not_ apply to you) in alt.architecture who was fumbling his way through his build a year or so ago:
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situation quickly deteriorated from there:
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"The rough opening for our staircase on the second floor is off by 3 feet. The mistake was made by the truss company that designed our floor truss systems, and nobody caught it until after our staircase was built." I have no idea how such a large dimensional error could get past the truss company, builder and owner, but it did. An extreme and unfortunate example.
There are no free lunches. If you think it's free, you've missed something. That was all I was saying.
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