Project Management for Owner—Builders
The U.S. Census Bureau defines Owner-built houses as houses built for owner occupancy, on the owner’s land, under the supervision of the owner acting as the general contractor. These homes are: (1) in most cases built partly by the owner and partly with paid help; (2) sometimes built entirely with the employment of subcontractors; and (3) occasionally built entirely by the owner. Contractor-built Houses are all houses built for owner occupancy on the owner’s land with construction under the supervision of a single general contractor. According to residential permit data from the U.S. Census Bureau, of the total number of private single family homes completed in the U.S. each year, owner-built homes account for approximately 7% and contractor-built houses account for approximately 15%. The percentages are slightly lower in the Western U.S. – approximately 5% and 10% respectively. Applying those percentages to the Ada County, Idaho, the number of owner-builders averages between 250 and 375 per year.
While being responsible for the construction of your own home can be rewarding on many levels, it is complicated, challenging and disruptive. While some of a contractor’s work is done on the job site, most of the work is planning ahead of time – so that things will go well on the job site. This includes reviewing plans to look for potential problems and the best way to get the job done; estimating the costs of materials and labor; locking in material quotes; obtaining permits and approvals; hiring, scheduling, and managing employees and subcontractors; scheduling inspections; ordering materials and scheduling deliveries; and tracking accounts payable and receivable to keep the whole thing afloat.
Based on our 50 years of construction industry experience, we can state with some degree of certainty that Murphy’s Law is alive and well on all construction sites. “Things will go wrong in any given situation, if you give them a chance.” The list of potential problems is extensive for any general contractor and includes items from the trivial to the catastrophic. An owner-builder’s lack of experience in construction usually means they can expect more than the average share of surprises and problems.
For the owner-builder, problems can develop for many reasons and have a range of impact on the project, its cost and the home’s long-term value:
• Lenders may not want to give the best terms on a construction loan without a licensed builder on the job
• Failing to build to local code (and the unbudgeted costs of correcting issues)
• The best subcontractors won’t work with owner-builders
• Being taken advantage of by disreputable contractors
• Risk of out-of-control construction costs and blowing your budget
• Complicated construction issues, requiring solutions that may be beyond the owner-builder’s capabilities
• Inability to control your schedule properly, causing costly time overruns and delays in project completion
• Difficultly extending or refinancing a construction loan if the project completion is delayed
• Mechanic’s Liens filed against your property by subcontractors or suppliers
• Foreclosure or other loan-related distress caused by budget and cash flow problems
• Depressed resale value when home is not built by a known professional
The better the planning, the fewer the problems and surprises.
Our Construction Project Management services include:
• Assisting our owner-builder clients with the planning and budgeting of their custom home, remodeling, or commercial construction project
• Assisting our owner-builder clients with permitting, selection of trade contractors and suppliers, and scheduling of the construction project