OK, as the homeowner, how much do I tip my crew?
Job is a time and materials, total is about $800k now.
Foreman has been on since January 2005, with a varying case of characters around him, but a core of 4 carpenters (varying skills levels).
How much would you tip the Foreman?
The senior carpenter?
The junior carpenters?
The laborers?
Pay scale here in California has been a billing rate for the foreman of $60/hour (the General Contractor pays everything above board; workman’s comp, etc); the carpenters vary $55 down to $40/hour; laborer around $15-22/hour.
And would you tip the General Contractor himself? Or just a really nive bottle of single malt scotch? (or a case?)
Any ideas?
Thanks
NotaClue
Replies
Buy em a case of beer and call it a day.
Hmmm.
At least some of the crew is in recovery and passed on the beer bust option at the midpoint...Great idea otherwise! It's what I'd want!
NotaClue
Ditto to the last reply...
Being in and out of General Contracting for almost 40 years now I never received a tip. I was often invited to houses warmings and and other celebrations of completion but never got a tip as the GC. I did on many occasions after a very well done job give the crew and select subs a bonus check because their good work had brought things in on time and under budget.
I would have fainted at getting a tip.
Of course no tip is required, but if you liked the "cast of characters" ( and the phrase alone implies you developed something of a relationship) and wish to show them you appreciate their efforts on your behalf, that's really great. Anything you do that's thoughtful will go over big, even a sincere "thanks" and a handshake has always meant more to me than some tips.
Any local resturants that have gift cert. for dinner for two would be good, he gets the gift and gets to share it with someone.
Tell them on Thursday not to bring lunch tomorrow and have it there for them. Maybe have a bottle for them to take home, or some big box gift cards.
And if the foreman went out of his way for you, a little extra cash given to him privately would also be great. You'd have to judge the appropriate amount.
The GC ,as the owner of the company, I wouldn't tip. Have them over for dinner, write a nice note they could use in their marketing, or something along that line would be good... Buic
Edited 12/7/2005 7:37 pm ET by BUIC
Just got a set of tickets from a customer I finished up 4 months ago they have season tickets to the Grizzlies and were going out of town so they called me up and asked if I wanted to go.Going to take my 10 year old daughter to the game.
Early this year another customer gave me a deep sea fishing trip took three of the crew.
Others have given me 100$ gift certificates to high end restaurants.Good way to make up to the wife for working late.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
season tickets to the Grizzlies
Ok, suppose you're working in Houston. If the HO offers you tickets to see the Texans, is that a good sign or a bad one?
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
Ed,
Texans tickets would work with me, especially if they were playing the Colts.
My lumber company gave me four tickets last year, with a parking pass. They provided all food and beer. In the forth quarter we discuused the fact that we were all seeing 44 players on the field and two sets of refs. Oh yeah, the Colts were playing and we were mezmerized by Payton, the Field General who was approaching the NFL season record at the time for TDs.
They regularly provide me with 4 tickets and a parking pass to Astros games. We sit 5 rows up from the third base dugout and closer to the third baseman than the first baseman. We can tell if the players shaved before the game. Alternatively, they provide four tickets in the Club Section. It is one section up from the field, and exclusive to Club Section ticket holders only. The restaurants and food are upgrade, a menu is provided with a personal waiter. High Cotton for this country boy.
I did a job a few years back very similar situation, about 750k, myself& 4 core employees. I had 8 months in the contract for completion, we did it in seven. Everything came out really well.
The owner tipped my guys $ 1000 cash each, I got 20k added to my final bill.
Can't say I done so well since.
Wow... T&M... $800 large so far and you're still happy. I'd say not less than a couple of hundred each and maybe an extra stack for the foreman.
Yah, we were thinking along the same lines; maybe 3-4 thousand for the foreman, 800-1000 for the best carpenter and so on down the line; bit less for the best sub, except the electrician's chief guy, who made a thing of true beauty out of the wire loom.
They'll be all back to do the rest of the additions in a year or two, so maybe we'll stick in their minds (and hearts) that way.So you don't tip the GC hiimself as the owner of the business? That's what my wife said too.
However, the idea of the reference letter and so on, that's a great idea!
Glad to do it.
Thanks for your suggestions!
NotaClue
Well, not to divulge trade secrets, but I'd say the GC has probably tipped himself or herself.
If you show some gratitude to the people on the job it will pay you in spades. So many ungrateful or downright rude owners out there, it'll be easy for you to stand out, and you'll get VIP treatment.
"Well, not to divulge trade secrets, but I'd say the GC has probably tipped himself or herself."amen brother! damn GCs are making a goddamn fortune and it really should be a crime. im acting as a GC to build myhouse and by the time I am done I will spend 75,000 for a house that will be worth 250,000 (according to my insurance company) plus the worth of the land which is 3.5 acres. Now you tell me where the hell all the money goes that the rest of the world has to pay 175,000 dollars which seems to vanish in thin air just to buy a house????freakin highway robbery man! heres a tip. punch that #### and ask for your money back!
Edited 12/7/2005 11:06 pm ET by Johnny1985489
I really hope you are kidding Johny................
On a hill by the harbour
I'm very new to this forum but have been in the building business for 17 years. Please tell me that you were liquored up when you posted the last stupid comment about GC's making a fortune. That's like saying all software guys (which I see you are) are geeks and make as much money as Bill Gates. I'd say you either fess up that you were having a bad or you formally apologize to every one on this forum...and I'm not kidding.
If contractors (or anyone else, for that matter) charge too much for you, then don't hire them. I'd venture to say that 9 out of 10 contractors are not making a fortune or anything like it. I'm definitely not sure where you're getting your information.
Thats a crazy thing to say. are you in the trades yourself and do you make a habit of stealing from people? I for one am insulted. I have been in business 20 years and have never intentionally tipped myself nor tried to mislead a customer. Thank God for people that realize the effort, time,and care that goes into building someones home and are willing to show that in whatever way they think is right. I am in a similar situation right now except that I am doing a cost plus job (6000sq.ft reno)and it is at a million two. My rates are 35$ per hr for carpentry and 25 for general labor. My client called two days ago and asked how much I was giving as bonuses for Christmas, she will be giving bonuses as well, ranging from a thousand for my lead to 250 for a laborer. This woman is a perfect example of a person, with money, respecting OUR trade, and willing to share some of her wealth with the rest of us. I as the G.C.( I still wear a tool belt whenever possible) do not expect a tip or bonus but would accept a gift if offered. My biggest concern is if she is the one in a lifetime dream client. Thank you not a clue for this discussion... you are also (I'm sure) a dream customer.
Lou
Stop screaming at me. You're totally misreading what I'm saying. It is not customary to tip the owner of the business with money, at least in my opinion. Maybe a gift. Where is this talk of stealing coming from??
If the contractor has successfully managed an $800K t&m job he has probably worked his butt off and done a lot of things very well. Hopefully he has made a fair profit for doing so.
NotaClue - For one, showing your appreciation with his crew is, in a roundabout way, tipping him. He gets a crew that likes to work with the boss that gets them the good jobs, with the good customers. A happy crew is a benifit to the owner.
As others said, if all went well as you imply, he should have made his profit when you paid the balance.
Enjoy your new space...Buic
Holy smokes, is it too late to help finish the house? Would you like someone to water the christmas tree? Did I mention how nice you seem? You look younger--are you working out?
More seriously, you'll be of the very few owners that will tip a crew and I think they will think good thoughts about your project for a very long time. Even at $100 per person they'll have warm fuzzies about you and your home. At the amounts you've mentioned they will probably never recieve another tip that large so you'll be forever etched in their memories. It's quite a feat to do something that a person will take with them through life.
As for a gratuity for the contractor, that's probably more common than tipping the employees and subs, although it doesn't trickle down so most employees never hear about it or see anything. I would suggest something other than a strictly financial reward. A weekend getaway would be a great thank you and is probably the most common that I've heard of.
All the best,
Don
I think I should discuss your generousity with the GC, and get his blessing.
I have done similar things with subs, but clear with the boss first. It just makes for a respectful obversation of authority....something that can be so beneficial but lacking in the workd today.
I'm not apologizing to anyone. My father and I just completed his house for $75,000. We framed it but sub conctracted just about everything else: foundation, roof, plumbing, electrical, and drywall. We did much of the finishing work, painting, siding, etc. It took us 6 months to build, not bad for a computer geek whos never done it I say. My point is this, we saved a minumum of $175,000 by doing some of the work and acting as your own GC. I'm sorry dude, but somebody is making a killing on home building. If you're not, maybe your not a very good GC.
So now in your post a GC who is profitable goes from being a crook to being a "very good GC"?"We framed it but sub conctracted just about everything else"
You framed it? How man hours did you and your father have in framing? Did you place any value in those hours or do you consider your time worthless. The last time I checked, my framing crew required payment for their time."We did much of the finishing work, painting, siding, etc. It took us 6 months to build" I thought you said you subcontracted just about everything else? How many hours did you, your father, friends, etc have in helping to do much of the finishing work, painting, siding, etc?How many square feet is the house? Exterior finish? Interior finish? Garage? I usually don't let an insurance company tell me what the market value of a house is going to be. How do they know if you used crap windows or high end windows? You did know there's a difference right? Did you ever get a cost from a GC to build the house according to the specs you actually used? They make so much money they probably could have taken the time to do all that estimating work for you...for free right?Oh and there are those pesky things called insurance, general liability, workers comp, direct overhead, indirect overhead, supervision. Oh and I almost forgot about profit...This reminds me of a quote -There are in fact two things, science and opinion; the former begets knowledge, the latter ignorance. - HippocratesLater...
Get defensive all you want. All I'm saying is if we had paid painters and framers we would not have spent another 175,000 dollars in labor. Somebody a few post back said they figured the GC pulled in 40-60k for one job. How many jobs does a GC do in a year? Only 1? Sure the build took 2 years but was the GC out there every day for 10 hours a day? I doubt it. My father and I worked approx 6 hours a day for 6 months with weekends off. I figure thats approx 720 hours each, so we'll say 1500 man hours total. Now lets be very generous and pay ourselves 50 bucks an hour. Which is pretty good for the types of jobs we put in. Ok so we have now spent an additional 75000 bucks. So the GC made $100,000 on this job? It doesn't add up to me. This house was 1750 sq ft with a garage that is 660 sq ft. 10 foot ceilings throughout the entire house. It may not be the most exciting house in the neighborhood but considering the experience level of the 2 of us I think we accomplished alot. If I had been doing this for the last 25 years it would have been completed faster and for less money as there would have been less mistakes along the way.We havn't had the house appraised or anything yet so we are basing this on what the insurance company told us. They have to put aprice on the house. There are smaller houses on small lots being sold for more than 250k so likely this house is worth more, I'm just using this as a worse case scenario.So anyway hats to you for getting your GC liscense but with that bitter attitude of yours I would hire your competition.
Edited 12/8/2005 11:38 am ET by Johnny1985489
Post #66816.17 by Johny1985489"amen brother! damn GCs are making a goddamn fortune and it really should be a crime. im acting as a GC to build myhouse and by the time I am done I will spend 75,000 for a house that will be worth 250,000 (according to my insurance company) plus the worth of the land which is 3.5 acres. Now you tell me where the hell all the money goes that the rest of the world has to pay 175,000 dollars which seems to vanish in thin air just to buy a house????freakin highway robbery man! heres a tip. punch that #### and ask for your money back!"Who has the bitter attitude?You wouldn't have a choice. You would have to hire my competition, because I would refuse to handle your project. I'd even give you their names and numbers.
I just wrote a program to automate estimating for footings and foundations.
I saved myself at least $1000.00.
You software dudes are making a killing stealing from us non geeks and all you do is sit on yer azzes all day.
SamT
I have a few questions.
The house cost you 30$ a square foot does this include the price for the 3.5 acre?
At 30$ a square foot I am trying to figure what type siding, windows, flooring, and trim did you use?
Does this price include your appliances?
How many baths and what type of cabinets and counter for the kitchen?
Did you finish the garage in sheetrock?
Is the house single story and what did your slab cost you?
ANDYSZ2
PS this is such a good price that I would deeply appreciate a breakdown in cost for plumbing,electrical,heat and air.
I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
Andy, you have lots of questions for Johnny! I've got some too but I'm going to hold off. Instead, I'm making an offer.
Johhny, if you'll come here to Michigan, I'll let you build me ten houses for that price and I'll give you 100k profit on each one. I'll just keep a measley 75k for myself.
You get the extra profit because you're name will be on the credit apps.
blue
Its the middle of the night and I can't sleep so I'll answer a couple questions. I am not full of it. My father, my brother, and me cashed out on our houses in California and moved to NM where everything is much cheaper. We all went together and bought 14 acres of farmland outside of a small town. 3.5 acres of that is mine. We built my fathers house first. He just retired and I wanted him to get into his place first. The reason I am sitting in front of a computer instead of building houses is I am waiting for my foundation to go in before I can start. The footings are dug and the plumber has finished his work, however the weather is down into freezing temps every night and my foundation guy wont poor until it warms up slightly. I don't have all the figures for the house because its my fathers house and his money. But when all was said and done he spent about 75k. The only thing not completed yet is the floor and trim. We plan to use that plastic hardwood flooring and figure that will be another 2500. Some of the cost that I remember off the top of my head was 15k for foundation, 6k for plumber, 4k for electricians, 2500 for the roofers, 3600 for the drywallers, 4000 for the ac unit (we ran the ductwork, the plumber and electricians did the rest), 5 grand for septic tank. These were the labor charges, we paid for material. We shopped around and got several bids before choosing anyone and one advantage we had was living in a mexican community. They work much cheaper. Example, another company run by white fellows wanted 25000 to poor the slab. A white electrician wanted 9000. These are not illegal mexicans either, all liscensed and all carried there own workmans comp.As far as building multiple houses thats what we are doing. Like I said first we built my fathers so he could enjoy his retirement. My house is next and then we will build a house for my brother. Where we live you can only legally build 1 house as a home owner. So each permit has to be in each persons name. After that we cannot build anymore. In fact the inspector threw afit when he first found out we were building 3 houses. He told us only general contractors are allowed to do this and he was going to do everything he could to stop us. We got the state involved and was told what we were doing was legal and they straighted out this inspector. The whole thing put a sour taste in my mouth.So anyway thats my story. If they would let me I would love to build more houses. I'm enjoying this.
Edited 12/9/2005 4:37 am ET by Johnny1985489
Get you license, and buy some more land. If your making 233% profit you'll be a millionaire in no time.
If you can build 10 more homes, spending $75,000.00 and selling for $250,000.00 in the next three years, you can retire at 35. But, why retire when you are only 35 and can make that kind of money?
10 x $175,000.00 = $1,750,000.00
Make sure you take your balance sheet to the bank. Show them you are making 233% profit, and funding should not be a problem. If you have trouble with the bank, find an investor.
When you get it done, you can write the National Association of Homebuilders, becasue they will probably want you to write a book on how you did it. Then, in your retirement, you will have residual income from the books sales. A method to obtain 233% will have builders scrambling for copies.
Remember me and this great advise when you come into your kingdom.
Edited 12/9/2005 8:21 am ET by txlandlord
Ok your at 40.1 K and no lumber package,cabinets countertops siding,flooring,fixtures,landscaping,dirt work,windows,doors.
On the stuff you did list you said that was for labor so I am still waiting for material cost on concrete,wiring,sheetrock,roofing,copper & pvc,ac unit.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
I have my own thread, lets leave this one alone. If anyone wants to continue this look for a thread entitled "Construction has begun!!! Woohoo!!"http://forums.taunton.com/tp-breaktime/messages/?start=Start+Reading+%3E%3E
Aw, c'mon! Don't stop now, I am enjoying this thread!Coming to you from beautiful Richmond, Va.
Hey Mr Know-it-all computer geek...
you linked to the thread that is the "start" thread when you enter BT.... which is not always the same...
Try getting the Link correct...
Doublewides cost about $35 per sq. foot.Maybe his house is a Doublewide?
"I'm sorry dude.."I guess I'll take that as an apology?To everyone else:Sorry to hijack this thread but it just hit a hot button with me. It's a shame that a client who appreciates his skilled craftsmen is discouraged at any level from showing his appreciation and generosity to whatever extent his bank account and conscience permit. If we had more folks like that to work for...ouch, I just pinched myself.Well I gotta go see how much money I can make now...the yacht payment is due, so I need to write some Change Orders. Just kidding. It's really my Aspen vacation home mortgage that's due....Stop it.
why is there a need to tip?
It is ONE of the many ways civilized people say thank you to workers who have toiled on their behalf....
it's a liberal thing...
;)
Mr. T.
"I YAM WHAT I YAM AND THATS ALL THAT I YAM"
-U.S. Sweet Potato Council
yes, its truly a liberal thing. 2+3=7
Is it just me----or does " Notaclue" clearly win the best customer of the year award?
Personally, I would be cautious about tipping the GC------- that could possibly be insulting. He likely considers himself as a higher life form than his underlings in some respects----------
for the GC write something more than a note----- write a a page or two detailing how pleased you are with the project, it's details, his management etc. ( would you tip a surgeon?--no---but you might write a heartfelt letter about how the surgery changed/saved your life----)-------- any gift would be something you might give a peer or a close friend/family member.
Crew members.------ money would be great, does the Garret Wade Tool Catelogue have gift certs.?---also you should personally encourage them to take pictures of their best work there for future referalls( they may be GC's themselves some day)
Avoid the beer thing---that can be insulting and demeaning in a way that wine or singlemalt is not.
BTW----- my dad tells me that when my grandfather was working( pre WWII)----when tradesmen worked at a customers house--- the customer provided lunch ALWAYS-------- 1 day job, 20 day job---didn't matter---every day you worked at a home---you got lunch.
I know a roofing contractor here that STILL buys his guys lunch EVERY day.
A box of donuts or pastries works for us.
Donuts? We supplied a catered lunch during the weekly review meeting every week---BBQ, Mexican, Thai, Middle Eastern, Pizza, Burger, Italian---and stocked the fridge with whatever the crew wanted.
Some days, 19 guys were working on that house; ha ha ha, although the foreman denied it initially, the subs started to cluster around the Friday lunch time slot...Glad to feed them...they did great work...I think they all know we appreciated the work they did.
But we wanted to thank the core carpentry crew which has been in there since the beginning.
All of your suggestions have led me to believe this is rare; that's odd; among my friends, all of whom did remodels out here in the past couple years, everyone did something for the crews...
But you're right; they didn't tip the GC on the time and materials jobs--figured it was in his 20%...
I'll thank him anyway----he sails (I think I just paid for next boat)---maybe a GPS or something.
NotaClue
Your on the right track NotaClue. The world needs more people like you. I've been tipped for framing, deckwork and remodeling and I've always appreciated it and the favor returned.
It sounds like you had an excellent relationship with the core crew and that creates a win-win atmosphere while ensuring that you got the very best job possible. My hats off to you!
blue
All, but especially Johnny and David,
At $800K gross for over two years work, the GC probably took home from less than $40K to just over $60K per year from this job.
$60K/annum for working 60+hr weeks is nothing to get uprighteous about.
NotaClue, if you bought him a new boat, that's all you did. You didn't buy him any groceries to put in it. On the other hand, you are one heck-of-a customer.
SamT
That sounds good.Most homeowners think they are overpaying and don't feel like they are obligated to provide those things.
Wow your catered lunches probably cost more than some of the design fees we get. I wish we had more clients like you. It nice if we are told we did a good job. We have one client that sends us some citris fruit about this time of year, I always thought that was a big deal.
I did do some cabinet work in a home, the homeowners would make us lunch which I appreciated.
It sounds like you had great luck with your crew.
How much to tip the crew at the end?
Well , being a total diy, I'd say about 30 degrees on them riding in back of the dump truck would do it. (at about 65 mph on the highway)
Edit; forgive my inappropriate behaviour, but just finished a bottle of wine after a 14 hr day, but " total is about $800k now" and your 'notaclue' handle prolly says it all. They should each get an envelope with 12 $100 bills in it. I usually keep these snide comments to myself, but it really has been a hard day!
Edited 12/8/2005 1:03 am ET by junkhound
You should have another!
Try red wine; it's better for your heart...
I'm impressed with your willingness to give something back to the guys who are building your home. It's rare to find that kind of respect from homeowners so I'll offer you a slightly different perspective.
The old tradition was to have a topping out party for the carpenters. When the roof was sheathed the foreman would cut a live branch from a tree on the property and it would be nailed up on the peak of the roof. This was a signal to the homeowners to prepare a feast for the workers. A great noon meal would be brought to the new home the following day and the homeowners would happily serve as hosts in their new residence for the first time. This custom is quite old and has many variations but it's essentially meant to confer blessings on the house, it's future occupants and all who enter there. By offering respect to those who build your home, you preserve the best of what they each put into it.
Feeding the working guys a great lunch is the first thing I'd do, for all the reasons mentioned and some others which you may also be feeling. Other gifts expressing gratitude are entirely appropriate at the end of the job but I'd make it something personal, not cash. If the foreman is a fisherman, I'd look for something which would fit the monetary reward you have in mind. Maybe put together a weekend fishing package for him and his crew. Put 'em up in a nice lodge, hire a guide, etc. That's the sort of thing which will make the job memorable to all of them for their entire lives. It would also have the effect of confering blessings on you, your family and your home.
Thanks for caring about the working guys.
Peter
Edited 12/8/2005 1:21 pm ET by Hudson Valley Carpenter
Edited 12/8/2005 1:22 pm ET by Hudson Valley Carpenter
Edited 12/8/2005 1:23 pm ET by Hudson Valley Carpenter
That is a great idea!
Foreman golfs; maybe one of those great new drivers...
The other guys it's harder to tell; didn't get to know their interests as well.
But I can ask the foreman!
Thanks!
NotaCluePS
I really like the topping out party; that might be something to do, or a variation of it...
"PSI really like the topping out party; that might be something to do, or a variation of it..."
It's a great tradition which isn't often honored any more. The ironworkers still do it, I believe, on big buildings. My point of view is that feeding the guys a great meal, during their working day, has the effect of bonding you with them and their work in a positive and significant way.
There's usually a pretty tight bond among crews of three to six carpenters who have worked together for at least one full project. One of the main reasons for that is safety, looking out for ourselves and each other, being aware of potential problems. Older guys will often make a practice of needling the less experienced in order to help them remain alert. Causing a younger crew member some mild embarrassment in front of his peers, getting a good chuckle at his expense, is a prime means of instructing him about personal safety in a timely fashion.
When a good bond exists on the job, it's often followed up with after hours activities. I've been on some great one day adventures with friends I made at work. That's why I suggested that you see if you can plan something for all of them to enjoy together, if it appeals to them.
Peter
Edited 12/8/2005 1:39 pm ET by Hudson Valley Carpenter
15% sounds nice to me!!!
:)
nice tips I have recieved as a carp:
200$ (bought a finish nailer)
various amounts on gift cards from Tool stores/home centers(more tools)
gift certif. to nice restaurants.
Bottles of wine
case of beer
A Heartfelt thanks and lucrative side work in the future
Hand made cards from customers kids
Lasting friendships
completion party/picnic
being taken to breakfast/lunch /dinner/bar
Over the past year I would hope you have gotten to know the "Motley crew", well enuf to get them something personal.
But if not cash or a gift cert. will always be welcomed by a working man/woman.
Mr. T.
"I YAM WHAT I YAM AND THATS ALL THAT I YAM"
-U.S. Sweet Potato Council
2 - 20 packs of Bud Light longnecks would work in Texas. I would have another cold 20 pack ready when you present your "tip" and have a beer and some "off business" conversartion with them. Nothing fancy. Do not forget to have a designated driver if y'all get into it.
I do this with some of my subs, and the benefits are good.
Thought I would chime in as well, any "tip" would be greatly appreciated cash, gift, planned fishing or golf outing. I had one customer bring us snacks, cold drinks and lunch about every other day at the end of the job she passed out gift cards and a six pack of Guinness. This was an average $300,000 house which about took 5 months, she was a great customer and now a friend.
The beer thing some guys like it but some guys are on the wagon so I would stay away from the alcohol as a gift. I personally think a tip is not needed, but if you want to show your appreciation for a job well done then more power to you. I would imagine tips of any kind in our business happen less then 2% of the time.
For Johnny: You should have just stuck with your first reply. Some GC's do make a ton of money, most however don't. Being a GC isn't rocket science but it takes a lot of organization, patience, skill, knowledge of all the trades, people skills and time and I'm sure many other attributes I forgot. It's not a 9-5 job, customers calling from 5am to 11pm with questions on their "baby" it is very easy to put in 80hr weeks. If you as a DIY built a house for let say 1/3 of the going house price that's great. Maybe it is even a nice sound house that won't have any problems, most GC's give a 1 year warranty we have been called back after 3 years for nail pops. Which we go out and fix, but have no actual responsibility to. The average profit for a GC is about 10-15%, so on a $250,000 home you could save $37,500 if the GC was not in the picture. If you crunch numbers on a 40hr/week 6 month job the GC is making less than $40/hour. Anyway if you built your place $45/sqfoot good for you, remember the story of the three little pigs? I have a feeling your house might be one of the first two in that story.
Jeff
Amen...well put on the GC comments.
"I have a feeling your house might be one of the first two in that story."Couldn't leave it alone could ya? Its amazing how much it bothers people in this profession that a DIY'er can accomplish something like this. I get the same comments until people come out to our property in person. Thats fine I can live with that. When I'm done come on by and we'll have a drink. I'm putting a bar in my home. You can tell me to my face that my workmanship is shotty. I may not live in an 800K house but you know what, I'm paying cash for it. Not bad considering I'm not even 30 yet.Anyway I'm done with this thread. Sorry to the original poster for all this nonsense. Enjoy your new home, I hope it brings you great joy.
Ok johnny:
"I have a feeling your house might be one of the first two in that story."
That wasn't fair, sorry your house may be a great piece of workmanship built with quality materials. It is just when you start adding up the cost of materials it gets expensive and as a GC or a DIYer materials cost about the same. It doesn't bother me that a non-construction person can build a home or install a sink without a professional it happens all the time that's why there are Home Depot's popping up like weeds. So anyway enjoy life is way too short.
I'm still thinking a 10% tip on that 800K would be about right heck waiter's get 10-15%!
Jeff
Enjoy the wisdon of your youth.
As a builder I do not see how he did it. I would like to see his balance sheet.
Perhaps Johnny is in a great location, where the value of labor and materials is not balanced with the price of the home. Like the City of West University in the Housotn area. A 1200 SF wooden home built in the 30s or 40s with a pad and pier fondation and window units for air sell for $250,000.00 plus.
Sometimes the 50 x 120 foot lots in this area can be worth more than $250,000.00 without a house. The three most important words in real estate: location, location, location.
Johnny says he has 3.5 acres. If he can make $175,00.00 per home, he should subdivide and build. He may get 4-5 lots out of the 3.5 acres, with potential profit of $700,000.00 - $875,000.00. If he is 30 he could be a millionaire by 35.
Oh, then he would be one of us, and not a DIY. One problem may be evident by his post. If a builder can spend $75,000.00 and make $175,000.00, and he sees it as thievery, and is opposed to the profit, he probably would only charge a homebuyer $100,000.00 and not $250,000.00. He would make about 35% profit if he sold for $100,000.00, and not the 233% he would make at $250,000.00.
233% profit, I need to hire Johnny as my CFO.
Edited 12/8/2005 5:21 pm ET by txlandlord
Edited 12/8/2005 5:22 pm ET by txlandlord
I think Johnny is keeping some of the finer details to himself.
Why the hell is he sitting at a computer when he can be out building houses with his dad and pulling down $175,000 a year.
It's doubtful that he's doing that well sitting at the computer.
My guess is he's full of it!
Doug
The best tip that I've got is to have the client pay the bill on time, anything else is gravy. Your call.
Notaclue,
As a General contractor I would not suggest tipping the General contractor. Assuming you were satisfied with the project a nice letter of referral would be very considerate.
Given the size and duration of the project and your description of the crew it seems appropriate that the person most responsible for the success of the project might be the project manager or lead carpenters. You seem to have acknowledged several others that made contributions that were noteworthy.
I have found that it is typical of most construction projects for these individuals to have the greatest chance of having the an influence on project, weather it be positive or negative, as they have the greatest duration of time on a project.
If I was the general contractor on that project I would have set my profit margin at 5% this would be above my regular salary and benefits and overhead. @ $40,000.00 my profit of your project was generous enough.
Respectfully,
Tom
Working for nothing is not getting any cheaper.
Hmmm.
To account for the 20% margin on the Time and materials bills, he split it as 13.5% overhead and 6.5% profit.
My guess is that his profit is driven by his subs...
Yah, I think you're right; no tip for the GC, but a very appreciative letter and maybe some sort of thoughtful sailing doodad; he likes to go out and bash his boat around the buoys on Saturdays.
NotaClue
Edited 12/9/2005 3:04 am by NotaClue
Notaclue,
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I did not know the margins on your T&M project.
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@ A 20% margin that would have the general contractor a gross profit from your project of some $160,000.00 with (6.5%) margin $52,000.00 of free and clear profit.
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You are right; apparently he does most of this off the sub contractor component.
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If your present contactor falls off the face of the earth for some reason, I think all of us would agree on this forum we want to work for you.
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Tom
Working for nothing is not getting any cheaper.
Edited 12/9/2005 7:17 pm ET by TomMaynard
I'm not sure, Tom, I'm at 25%.
David,<!----><!----><!---->
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You’re not sure about what? You’re at 25%? Margin? Mark up? Not feeling so well today and only running at 25%<!----><!---->
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Tom<!----><!---->Working for nothing is not getting any cheaper.
I'll keep that in mind if he sinks aboard his sailboat in the next race!
NotaClue