Owner Builder Insider Secrets
Multiple ways (39 to be exact) to save your money: (Especially see 39)
- FREE home plans from TRUE Custom Green Built Homes(TCGBH)
A story: One of our clients was told by a “Custom Builder” the CB would build the client’s home plan (drawn by the client’s architects) as soon as the CB’s architect reviewed and modified it to meet CB’s specs and that it would only cost the client an additional $10,000. Translation: CB is saying build our plans on your lot or pay thru the nose.
Another version of this story is: CB will modify CB’s plans to meet your design desires and the fee for the redesign will be $__________ (fill in the blank)
Multiple bids/estimates always produce savings
We use a guide of 3 bids/estimates on each area so you get the best choice of what to pay. All subcontractors bid to the same specification so it is easy to pick which one you want. (Hint: Our clients generally choose the lowest bid and have praise for how much they saved and the quality of the work performed.)
Know what are the profit margins and overhead margins will cost you
If a Customer Builder wants to earn 20% on a building project they must add that percentage to their overhead costs. Let us say 15% overhead for this example (remember overhead and profit have nothing to do with the builder cost of materials and labor for your home building project). The total is 35%. Let’s use a figure of $350,000.00 for the cost of materials and labor for your project. So to pay for CB’s 15% overhead and the CB’s goals of 20% profit, you get a total of 35%. 100% minus 35% = 65%. To determine what the Customer Builder would charge, you divide the real builder costs - in this case $ 350,000.00 ÷ .65 = $538,461.53. This is what the Custom builder will charge you for your home. Here is how that breaks down. $538,461.53 x.15 (overhead) = $80,769.23 apportioned to overhead. $538,461.53 x .20 profit = $107,692.23 apportioned to profit. Proof is: $350,000.00 (real builder cost, not Marked up cost of materials and labor) +$80,769.23 (15% overhead apportion) + $107,692.31 (20% apportion to profit) = $538,461.53. If this math does not convince you should be your own builder, then nothing will. (Third party verification source “Construction Math Quick Study Bar Charts” See Calculating Profit paragraph)
Know how to get builder prices
TCGBH has a large list of places and faces vendors/suppliers/subcontractors who will give you owner/builder prices/costs.
Know the negotiating power of wholesale buying
TCGBH gives the subs/vendors/and suppliers repeat business. Thus they extend builder prices to all of our individual clients.
Know the best green technology to use vs. the most expensive or the one that gives the most profit to someone else
One example is in order. We recommend open cell foam for insulation. Not many builders are using this insulation. There are other options and we will discuss them all in our insulation class. You decide what you want.
Know the steps to get it done right vs. shortcuts used by some to generate more profit at your expense
Here is one example. You need to have installed foam sheeting under the bottom of the outside frame base plate to keep bugs out of your home. Very simple and inexpensive step we recommend. We call these small things doing it right.
Know where to purchase for the best builder prices
We not only have a list of places and faces, but we will visit 8-12 of these each year as part of our Builder Education University program schedule. These hands on sessions are very helpful in making selections for the component parts of your Custom Home.
Know what gives you, not a builder, the best return on investment (ROI)
A very good example here is what materials and what methods are used to water proof your showers. Since this is behind the wall, it is tempting to cut a corner here. If you do not know what needs to be done, how you will ensure they are doing it. This potential expensive point of failure (2-7 year time frame) is something you want done right. We will show you two systems we recommend you install.
Know new construction vs. replacement construction
Windows are the best example. Home shows showcase replacement windows. You are building new construction. You will get what you want and get much better prices when you go with new construction windows. We will take you to several window vendors who can show you the good, better and best options.
What are the most expensive parts of the home?
Per square foot, the Kitchen and then the Master bath. TCGBH’s Builders’ University has a separate class on each of these areas. The options on cabinets alone can make your head spin. We will show you how to make the right decision for you and get the best bang for your buck.
Insider Green Secrets from TRUE Custom
What’s the best proven return on investment (ROI) insulation?
We recommend open cell foam for insulation. Not many builders are using this insulation. There are other options such as closed cell foam, cellulose, fiberglass, ICF, and SIP. We will discuss them all in our insulation class. We will also show you hybrid combinations that can save a few bucks. You decide what you want. TCGBH is excited to show you how alternate stud construction in your outer walls will make you insulation work at the optimum level.
Right now we are the ONLY company in Central Texas doing this new Green system.
Know the truth about solar power?
Solar is a great source of energy especially here is Texas. It is best when you have the south roof of you home free of tree obstructions and for aesthetic reasons southern exposed roof is in the back yard. You should check on what if any rules your HOA has about solar power. We will give you recommendations on what panels to buy, as there have been some problems lately on the quality of panels. Energy rebates are changing and will stay in flux, we believe, for a while. the same is true for what your energy companies are paying for buy backs of what you generate but do not use. If you need to store the energy generated by your panels at your home, you must have an expensive battery system. This changes the ROI. If you want them, we will put them in for you. We will endeavor to explain the ROI for your particular system before you make the final decision. As a good hedge, you can have the wiring run to your attic or to the outside (for ground mounted panel) at the time you build. This is an inexpensive way to be ready to easily add a solar system when the economics work in your favor.
Know about grey water and how best to use it
Waste not, want not. We are in a record drought period here in Texas. Water rates are going up. It is fairly inexpensive to put in a system that will capture your “grey” water from washing machines, showers, bathroom sinks and tub baths. You can direct this to a flower beds ,trees and or shrubs. Given that the average family of 4 uses 300 gallons a day for these activities, you will be saving 300 x 30 days = 9,000 gallons a month.
Know about the alternative stud wall building system
This system allows the inside wood surface of most wall studs to be covered by insulation (we recommend open cell foam). This virtually stops any heat transfer through the wood. And yes, there is heat transfer through the wood and that raises your monthly utility bills.
Know about the last findings on Low e windows
There have been some successful lawsuits in California about leakage of Argon gas from between the double pane windows. We have located one product that squarely addresses this potential problem. It means you will have the option to build in a solution now, instead of paying to fix it later on. These windows fall in the better category. You decide if it is worth it to you. These are still less than replacement windows.
Know why wood fireplaces and green just don’t mix
Unfortunately, wood burning fireplaces are not compatible with today’s energy efficient homes. Energy efficient homes are more air tight and this does not give wood burning fireplaces enough draft (air) for the fireplace to work well. If you open a window to get more air, you are defeating the energy efficiency of your home. Today gas fireplaces are your fireplaces of choice.
Learn if geothermal is for you now or in future
Very expensive and the ROI is not here just yet for most. We have a few clients that have put it in and we will do so if that is what you want. We will cover specifics in the Builder University class or in one on one conversation.
Learn if tankless, heat pump, gas or electric water heater is best for your project
Natural Gas is the most cost effective. A very good consideration is a heat pump water heater. Tankless is an option as well. Again, whatever you want you will get.
Learn about HVAC zones and what they can do for you
An excellent way to control you HVAC costs is to establish multiple zones in your home so areas that are not used in the day or the night can be a source of energy saving. We will show you how to make that decision.
Learn how to get guaranteed low utility bills
Our partner Energy Wise will give you what you need to do to achieve guaranteed monthly energy savings. Guaranteed cooling-heating bills run as low as $68 monthly average for a 2700 square foot home.
Learn why the garage is not the best place for water heating
Often the garage is a long distance from the kitchen or bathroom, leaving you to wait an excessive time to get hot water. Learn how to how to get hot water quickly while conserving water.
Of the many types of windows what works best?
Good to better windows are double pane low e of 0.30 or less and u-factor of 0.30 or less. Vinyl frames conduct less heat. There are many window options. You choose what you want. Aesthetics may play a big part. Just know that windows can be a big source of heat gain or loss in your home. We cover this in Builders University classes.
CFL’s or LED lighting?
Easy answer here. The economics say go with LED for every light in your home period. Yes, they cost a little more, but LED’s are dimmable, give you big savings and will last up to ten years.
How Fans and air circulation contribution to energy savings
Ceiling Fans in most rooms. When they are running for pennies a day, they effectively give you a cooling or heating difference of 4-5%. Make a fan a part of every room.
The myths of air conditioning tonnage and SEER ratings
Bigger is not better. Nor do you normally need multiple units, nor do you need to spend extra money to get the highest SEER rating. If you choose the Energy Wise design system, you will be surprised on the tonnage you need and how that dovetails with the zone system. This will save you money up front and in your monthly bills.