By Bob Hinz, Owner – HomeWrights
Acting as your own general contractor (owner-builder) may have significant benefits! There is no better way to build equity than to be an owner-builder in the Denver area. When you act as your own general contractor and build your own home, you save yourself the “profit” that the residential builder has to plan into the job.
If you’re building a custom home or luxury home n Denver, Boulder, Colorado Springs, or Pueblo, then between 5 and 20% of that project is profit or construction-management fees.
Builders are in the custom home business to make money and they work hard for their pay. They’ve developed systems, connections and resources to make the new home building project run smoothly. But, a builder has to make a profit on the construction project, or they go out of business.
If you act as your own general contractor and build your own custom home, you eliminate the middleman and his profit.
Benefits to Being the General Contractor in Denver, Boulder, or Colorado Springs
By acting as your own general contractor, you may also save on material mark-up. There’s a ton of raw materials, hardware, lumber, components, appliances, and fixtures that go into a new house. As the general contractor, you now have the ability for a little price negotiation or bargain shopping and that can go a long way toward helping you stick to a budget.
If you’re willing to spend just a little time shopping and negotiating bids and prices, you can save a lot of money on materials and you won’t pay a mark-up on anything.
General Contractor Quality Control
There is also the issue of quality and control. When you are the general contractor, you take control of many things that were previously out of your hands. You can make changes and improvements to your home while the project is going on, without paying significant change order fees. You are also in charge of who is on the job. You select
subcontractors who meet your criteria. And, you choose your materials and suppliers. When you utilize the Owner-Builder Program at HomeWrights Custom Homes, you are the general contractor and all decisions start and end with you!
Custom Home Builders in Denver Earn Sweat Equity
Sweat equity is a term that many people are familiar with. It means exactly what it says. You sweat – you gain equity. When you are the general contractor you have the option to put as much sweat into your home as you want. A good rule of thumb is to leave the skilled trades to skilled subcontractors. If you happen to be good at some aspect of the construction project and you want to do something yourself, go for it. But your time is extremely valuable.
As your own general contractor, you have the opportunity to leverage your time and your money to earn equity in two ways. First, eliminating the markup a traditional home builder is going to charge and second reducing the costs of change orders, and third being able to select the materials, appliances, finishes, etc. that fit your quality requirements and budget considerations.
Custom Home Builders Subcontractors – Challenges/Opportunities
Some people are worried about being able to get results from subcontractors, or getting straight answers from city building inspectors. Keep in mind that these folks really do want to do a good job, get along with the owner, and complete a good construction project. And, they really do want you to succeed!
Listen to them. Try to build alliances. Let them know that you are doing this for the first time. They will respect your honesty, and they might try to offer some advice to eliminate the possible bumps in the road.
Construction Knowledge Required to be Your Own General Contractor
Most people have the basic skills it takes to manage a new home construction project. If you manage people, projects, money, or materials on your regular job or at home, you are already doing most of the things it takes to build your own custom home in the Denver area.
A little construction knowledge will be helpful, but it is not an essential part of the puzzle. Remember – as the general contractor, you are simply managing the project, not pounding your own nails, sawing boards, or digging ditches.
Acting as your own general contractor is a lot of work with significant rewards. If you have any doubt about your ability to pull off a project like this, getting a helping hand and a little guidance from HomeWrights Custom Homes is worth considering. You’ll still save a lot of money, and you’ll love the results!
Thousands of people act as their own general contractor every year and build their own homes each year. With patience, planning, and a little help, they get the job done, and they love the pride, the value, and the sweat equity that goes with being your own general contractor. You can do it, but you don’t have to do it alone!
General Contractor or Turnkey Custom Home – Which is Best?
We’re always making comparisons of the HomeWrights Owner-Builder Program building method to a more traditional approach (hire a general contractor and wait for the keys). We believe that people who are well informed make good decisions.
So, give us a call and we’ll explain the advantages (and disadvantages) of both methods. Our Turnkey Custom Home program is a more traditional approach to custom home building but even then, we’re significantly different than most custom home builders in the Denver area.
Educate yourself. Visit our YouTube Channel. Study your options. And give us a call.
Feel free to contact us at any point of your new home building process and we’ll help where we can!
Related Article: How Much Profit Should My Builder Make?