Design Build Projects - Whose Minding The Store?
Author: Tammy A. Borges
So you're ready to start your design build remodeling project.
You've hired yourself a contractor and are raring to go right?
Wrong!
Of course a new renovation project is an exciting time
especially a design build project which allows for the most
instantaneous freedom of expression.
Anticipating the end and having a fresh new look is a
temptation to hurry the process along. But a word of caution;
walk don't run. A design build project can also be difficult to
keep on track if you don't have a plan.
Unless you are someone with endless means, don't get ahead of
yourself, the work you do up front could potentially save you
thousands even tens of thousands of dollars in the end.
Working out a comprehensive budget that will get you both the
final design you desire while keeping you out of financial
trouble is sometimes a high-wire balancing act. But it can be
done.
Ok so how do you achieve this important goal when you don't
even know everything you want? Well first you must take some
important steps that if not done, can have a negative impact on
your actual budget.
Here's the Top 10:
1. You must realistically decide how much you can "invest" in
this project. And it is truly an investment as you will benefit
financially from the return on investment (roi).
2. Determine what type of funding will you use? Savings,
personal note, home equity line of credit or loan? Choosing the
right type of funding can also save you money. You should speak
to your financial advisor.
3. How much of a contingency are you able to set aside for
unforeseen conditions which result in changes. (It should be at
least 15%; 20% if possible).
4. Get the basic design on paper as soon as possible. This
would include plans, elevations and specifications. Whatever
can be determined up front should be. This will help solidify
your budget.
5. Obtain a minimum of three bids from contractors based on the
basic design intent. Make sure they are pricing apples to
apples.
6. Establish allowances for all large purchases such as
plumbing fixtures, appliances, lighting and stick to them.
7. Check contractor references thoroughly; view their work if
possible. Having an incompetent contractor will cost you money.
8. Get it in writing. Whatever pricing, materials and/or
project schedules are agreed upon up front, they should be part
of a written contract.
9. If your renovation project is large (and large is relative
to your budget), you may want to consult an attorney to review
or even write the contract for you.
10. Require insurance certificates (general liability and
workmen's compensaton) from your contractor and subcontractors.
So What's Up With the Title?
Ok why is this article is entitled "Whose Minding the Store"?
Well of course it is only a metaphorical question but it is one
of great consequence. The "Store" is your budget. And the
question is who will be minding it?
Believe it or not, I see many just sort of loose track of it.
Then all of a sudden, wham, the reality hits them like a
freight train. Someone needs to be in charge. It can be you,
your architect or your designer but it should be done
consistently by the same party and updated no less than once a
month on a good size project. A written comparison of actual
costs versus estimated costs. This will keep your budget from
derailing.
Design build projects are difficult to anticipate costs way in
advance keeping constant tabs on them is imperative. A good way
to do this is to create categories or phases in the beginning.
The construction industry uses what are known as CSI codes.
These construction cost codes break down a project by every
category and assign a number to it thus creating a schedule of
values.
If your contractor is unfamiliar with them, they can create
their own just make sure it covers all the categories you can
think of and includes material and labor. Then when they
invoice you, they should bill against these categories.
Not only will you see where you may be getting into trouble,
you may also see where you have a windfall and can move some
money (theoretically) around. Your contractor should be able to
provide you with this information. It can easily be managed on a
simple spreadsheet.
Don't Forget This One:
A category that many people overlook is general conditions.
These costs can add up especially on a large project. It
includes items such as dumpsters, temporary utilities, portable
toilets, cleaning, management fees, temporary controls and
protection to name just a few.
Other substantial amounts of course will be found in the major
trades. These will include rough carpentry, plumbing, HVAC,
electrical, millwork and finish carpentry, flooring, doors,
windows and roofing materials.
Ok so now you have your design and a budget you can live with.
Now what? Now a call to action. Research your product
selections and their availability. The earlier decisions are
made the earlier the orders can be placed. Delays cost money
pure and simple.
Dilligence is the key:
Don't let the inertia of your project get your budget spinning
out of control. By carefully monitoring your budget, you will
not only get the finished project you desire but also may find
a way to get things that were once only on your wish list.
About The Author: Tammy Borges is the founder and author of
http://Remodeling101.com - A beginner's guide to the home
remodeling process. She is an experienced and accomplished
Senior Project Manager and has been in the construction
industry for 25 years.
You've hired yourself a contractor and are raring to go right?
Wrong!
Of course a new renovation project is an exciting time
especially a design build project which allows for the most
instantaneous freedom of expression.
Anticipating the end and having a fresh new look is a
temptation to hurry the process along. But a word of caution;
walk don't run. A design build project can also be difficult to
keep on track if you don't have a plan.
Unless you are someone with endless means, don't get ahead of
yourself, the work you do up front could potentially save you
thousands even tens of thousands of dollars in the end.
Working out a comprehensive budget that will get you both the
final design you desire while keeping you out of financial
trouble is sometimes a high-wire balancing act. But it can be
done.
Ok so how do you achieve this important goal when you don't
even know everything you want? Well first you must take some
important steps that if not done, can have a negative impact on
your actual budget.
Here's the Top 10:
1. You must realistically decide how much you can "invest" in
this project. And it is truly an investment as you will benefit
financially from the return on investment (roi).
2. Determine what type of funding will you use? Savings,
personal note, home equity line of credit or loan? Choosing the
right type of funding can also save you money. You should speak
to your financial advisor.
3. How much of a contingency are you able to set aside for
unforeseen conditions which result in changes. (It should be at
least 15%; 20% if possible).
4. Get the basic design on paper as soon as possible. This
would include plans, elevations and specifications. Whatever
can be determined up front should be. This will help solidify
your budget.
5. Obtain a minimum of three bids from contractors based on the
basic design intent. Make sure they are pricing apples to
apples.
6. Establish allowances for all large purchases such as
plumbing fixtures, appliances, lighting and stick to them.
7. Check contractor references thoroughly; view their work if
possible. Having an incompetent contractor will cost you money.
8. Get it in writing. Whatever pricing, materials and/or
project schedules are agreed upon up front, they should be part
of a written contract.
9. If your renovation project is large (and large is relative
to your budget), you may want to consult an attorney to review
or even write the contract for you.
10. Require insurance certificates (general liability and
workmen's compensaton) from your contractor and subcontractors.
So What's Up With the Title?
Ok why is this article is entitled "Whose Minding the Store"?
Well of course it is only a metaphorical question but it is one
of great consequence. The "Store" is your budget. And the
question is who will be minding it?
Believe it or not, I see many just sort of loose track of it.
Then all of a sudden, wham, the reality hits them like a
freight train. Someone needs to be in charge. It can be you,
your architect or your designer but it should be done
consistently by the same party and updated no less than once a
month on a good size project. A written comparison of actual
costs versus estimated costs. This will keep your budget from
derailing.
Design build projects are difficult to anticipate costs way in
advance keeping constant tabs on them is imperative. A good way
to do this is to create categories or phases in the beginning.
The construction industry uses what are known as CSI codes.
These construction cost codes break down a project by every
category and assign a number to it thus creating a schedule of
values.
If your contractor is unfamiliar with them, they can create
their own just make sure it covers all the categories you can
think of and includes material and labor. Then when they
invoice you, they should bill against these categories.
Not only will you see where you may be getting into trouble,
you may also see where you have a windfall and can move some
money (theoretically) around. Your contractor should be able to
provide you with this information. It can easily be managed on a
simple spreadsheet.
Don't Forget This One:
A category that many people overlook is general conditions.
These costs can add up especially on a large project. It
includes items such as dumpsters, temporary utilities, portable
toilets, cleaning, management fees, temporary controls and
protection to name just a few.
Other substantial amounts of course will be found in the major
trades. These will include rough carpentry, plumbing, HVAC,
electrical, millwork and finish carpentry, flooring, doors,
windows and roofing materials.
Ok so now you have your design and a budget you can live with.
Now what? Now a call to action. Research your product
selections and their availability. The earlier decisions are
made the earlier the orders can be placed. Delays cost money
pure and simple.
Dilligence is the key:
Don't let the inertia of your project get your budget spinning
out of control. By carefully monitoring your budget, you will
not only get the finished project you desire but also may find
a way to get things that were once only on your wish list.
About The Author: Tammy Borges is the founder and author of
http://Remodeling101.com - A beginner's guide to the home
remodeling process. She is an experienced and accomplished
Senior Project Manager and has been in the construction
industry for 25 years.
