Toddm, I was speaking more about premium builders charging premium prices. By definition, "premium" will never be on every corner.

Would you please point to an example of any HVAC system installed that is less now than 30 years ago?

Dunno what you mean. The first geo system I saw (or heard of) was a friend's new construction in 1982 in Texas. Geo penetration is pretty slim for a technology that has been around that long. I make it 8 percent or so of US single family homes based on 600k installed units. That makes a custom market no matter what you call it. Geo is well-based here in the mountains, a sideline for water well drilling companies, and not cheap in any analysis.

Ahhh, you discussed price and niche in the same breath thus obscuring your point. If your point is "niche" then I would suggest again that premium by definition will never be common place. It appears that geo sales may have fallen off in spite of incentives, so we may be reaching saturation.

Like all things "premium" not everyone wants to pay for it......just like some don't want to pay for a GC.

Met with another GC the other day and he bluntly told me that he would charge 30%-40% over the cost of the home if he was the GC. In addition, he stated that he had no experience in the green building techniques and materials and would be learning on my job and on my dime. He recommended that I be my own GC and hire out a project manager.

That is the basic rundown of the GC's in that area. Nobody knows how to build a proper green home and that leaves the option of doing it yourself or not building at all.

What is it you want him to do that will cost more?

Posted By ICFHybrid on 01 Nov 2013 07:07 PM
What is it you want him to do that will cost more?

The 30-40% he quoted was his mark-up/profit. So the $300K build becomes a $420K build.

I mean, in terms of the Green Building. It sounded as if his quote was higher than his regular markup.

Posted By ICFHybrid on 01 Nov 2013 08:59 PM
I mean, in terms of the Green Building. It sounded as if his quote was higher than his regular markup.

He said it didn't matter, his markup of 30%-40% is irregardless if it's a green or non-green build. He was upfront and said he would be learning on the project and the learning curve costs would be taken on by the homeowner.

I talked to about 10 GC's, and no one was close to 40%.  Most of them quoted between 18-22%, and it was a line item on their quote.  Where are you finding your GC's?  You say you deal with them on a daily basis.  Is that 1 GC in particular or a variety of them?  Have you asked your ICF subcontractor which GC has hired him before?  Your guy sounds like he just doesn't want the work. 

Posted By eugenep on 02 Nov 2013 01:27 AM
I talked to about 10 GC's, and no one was close to 40%.  Most of them quoted between 18-22%, and it was a line item on their quote.  Where are you finding your GC's?  You say you deal with them on a daily basis.  Is that 1 GC in particular or a variety of them?  Have you asked your ICF subcontractor which GC has hired him before?  Your guy sounds like he just doesn't want the work. 

Yes this is more like reality
I hope that the viewers of this thread don't perceive that the GC is walking away with 18-22% pure profit, the GC has office overhead,salaries, insurance(general liability, workers comp., commercial auto insurance, builder's risk) Truck payments and expense, and hopefilly he can take a salary himself for his efforts.
and the percentage of mark up is all good as long as he did not make an error on his "hard bid", in the end most contractor's would be happy to end up with 5-10%
the contractors's expenses don't start and stop when the jobs do, it continues regardless of wether there is work or not.

40%? With a 28% gross profit,(120/420)he'd have to be an idiot not to make an excellent net profit. Nice work if you can get it I guess but impossible in most of the country. Is he the only GC within 100 miles?

Another option might be an outfit like U-Build-It or similar. It's sort of like a cross between a GC and a Construction Manager. IIRC, the fees fall somewhere down in the 10%-13% range. They prepare a plan and handle the paperwork and subs some, but the homeowner is responsible for most of the day to day onsite supervision.

I'm working as an hourly consultant to an out of stater who is doing a remodeling project and has hired one of my subs (with my permission). Saves me the headaches of GCing an out of the way complicated, ill defined job, but gives him the satisfaction if not going it alone.

Posted By cmkavala on 02 Nov 2013 07:52 AM

Posted By eugenep on 02 Nov 2013 01:27 AM
I talked to about 10 GC's, and no one was close to 40%.  Most of them quoted between 18-22%, and it was a line item on their quote.  Where are you finding your GC's?  You say you deal with them on a daily basis.  Is that 1 GC in particular or a variety of them?  Have you asked your ICF subcontractor which GC has hired him before?  Your guy sounds like he just doesn't want the work. 

Yes this is more like reality
I hope that the viewers of this thread don't perceive that the GC is walking away with 18-22% pure profit, the GC has office overhead,salaries, insurance(general liability, workers comp., commercial auto insurance, builder's risk) Truck payments and expense, and hopefilly he can take a salary himself for his efforts.
and the percentage of mark up is all good as long as he did not make an error on his "hard bid", in the end most contractor's would be happy to end up with 5-10%
the contractors's expenses don't start and stop when the jobs do, it continues regardless of wether there is work or not.

Well put Chris. Around here it is very rare for the combined overhead and profit to exceed 25%. And on a larger job more like 18 to 20.

Posted By Lbear on 01 Nov 2013 06:55 PM
Met with another GC the other day and he bluntly told me that he would charge 30%-40% over the cost of the home if he was the GC...

Here is my take on this.  He just doesn't want your work.  But if the money is there, he will put up with the headaches he foresees.

Posted By cmkavala on 02 Nov 2013 07:52 AM

Posted By eugenep on 02 Nov 2013 01:27 AM
I talked to about 10 GC's, and no one was close to 40%.  Most of them quoted between 18-22%, and it was a line item on their quote.  Where are you finding your GC's?  You say you deal with them on a daily basis.  Is that 1 GC in particular or a variety of them?  Have you asked your ICF subcontractor which GC has hired him before?  Your guy sounds like he just doesn't want the work. 

Yes this is more like reality
I hope that the viewers of this thread don't perceive that the GC is walking away with 18-22% pure profit, the GC has office overhead,salaries, insurance(general liability, workers comp., commercial auto insurance, builder's risk) Truck payments and expense, and hopefilly he can take a salary himself for his efforts.
and the percentage of mark up is all good as long as he did not make an error on his "hard bid", in the end most contractor's would be happy to end up with 5-10%
the contractors's expenses don't start and stop when the jobs do, it continues regardless of wether there is work or not.

I wasn't trying to imply that he is making 18-22%, but that was just his line item above the costs of the subcontractors.  I am also assuming that he isn't padding the subcontractor fees.  I know that is his gross amount, and it only goes down.

As another aside based on my current experience, my GC has a pretty big staff for a small firm.  On my project, we have a project planner/interior designer, a project foreman, and the head GC, who is a partner in the company.  Once the project is rolling along, my foreman should be there most of the time, that is based on what he told me, and what I saw at the other homes that he was the foreman. 

With regards to the value of hiring a GC, just last friday, they had 3 subcontractors and all 3 staff members discussing many of the important details with regards to penetrations, sewer, window rough opening, door rough openings, radiant layout, etc.  For an owner/builder, I am not sure I would be able to get everyone together to discuss things versus I talk to each subcontractor individually, then communicate the details to the other subcontractors.  Plus I wouldn't necessarily know if they are telling me the correct things, and I am sure it would be tons of back and forth, but with all of these subcontractors working closely with the GC on this project and previous projects, they know each other, they already communicate well with each other, and they already know some of the issues of the other subcontractors, so they are trying to work together to get things done.  At least, that is how I feel.  Also, these were just the head guys talking to each other, work was being done to lay block, lay rebar, cut the blocks, etc. 

I have about 400-500 linear ft of footing.   I totally encased the garage in ICF, and  all of the stem walls are in ICF.  Originally, we were planning to use CMU for the interior stem walls that supported the Amdeck, but I thought it didn't make sense to switch stem wall material.  Even the stem wall under the garage door is using ICFs.  So, there is lots of work to level all of the ICF, place all of the rebar, place all of the dowels, cut all of the penetrations, create the vents.  My finished floor height is very low, and with the vapor barrier in the crawl space, I only need 4 vents.  However, because it is so low, they will need to create small wells for the vents.

Another detail that I didn't know was the rebar up the walls.  They were asking me for my window/door openings while they were laying blocks for the stem walls, and I was annoyed because I thought they haven't even poured the floor yet, why do they care about the wall openings.  I was thinking I had 3-4 weeks before they poured the walls, but then they explained to me about the rebar that will go up into the wall.  I was thinking it wasn't necessary because they already had dowels that were 3-4 ft about the top of the stem wall, and that should've secured the wall to the stem wall.  I guess ignorance isn't bliss in this case.

I am glad that I have an experienced GC, or else I wouldn't know that they were doing it correctly.  Actually, I still don't know if they are doing it correctly, but I am trusting them.  I do ask questions here and there, but I have to trust the people that I hire know what they are doing.  Just on all of the coordination of the city, the plumber, the excavation, the ICF installer, and the radiant planning, it has been worth hiring the GC.  They are spending so much time planning and meeting and discussing things, and I would probably be still trying to find a good subcontractor for each job, but I wouldn't know how to get them all talking to each other without spending even more money.

Posted By eugenep on 02 Nov 2013 01:46 PM

Posted By cmkavala on 02 Nov 2013 07:52 AM

Posted By eugenep on 02 Nov 2013 01:27 AM
I talked to about 10 GC's, and no one was close to 40%.  Most of them quoted between 18-22%, and it was a line item on their quote.  Where are you finding your GC's?  You say you deal with them on a daily basis.  Is that 1 GC in particular or a variety of them?  Have you asked your ICF subcontractor which GC has hired him before?  Your guy sounds like he just doesn't want the work. 

Yes this is more like reality
I hope that the viewers of this thread don't perceive that the GC is walking away with 18-22% pure profit, the GC has office overhead,salaries, insurance(general liability, workers comp., commercial auto insurance, builder's risk) Truck payments and expense, and hopefilly he can take a salary himself for his efforts.
and the percentage of mark up is all good as long as he did not make an error on his "hard bid", in the end most contractor's would be happy to end up with 5-10%
the contractors's expenses don't start and stop when the jobs do, it continues regardless of wether there is work or not.

I wasn't trying to imply that he is making 18-22%, but that was just his line item above the costs of the subcontractors.  I am also assuming that he isn't padding the subcontractor fees.  I know that is his gross amount, and it only goes down.

As another aside based on my current experience, my GC has a pretty big staff for a small firm.  On my project, we have a project planner/interior designer, a project foreman, and the head GC, who is a partner in the company.  Once the project is rolling along, my foreman should be there most of the time, that is based on what he told me, and what I saw at the other homes that he was the foreman. 

With regards to the value of hiring a GC, just last friday, they had 3 subcontractors and all 3 staff members discussing many of the important details with regards to penetrations, sewer, window rough opening, door rough openings, radiant layout, etc.  For an owner/builder, I am not sure I would be able to get everyone together to discuss things versus I talk to each subcontractor individually, then communicate the details to the other subcontractors.  Plus I wouldn't necessarily know if they are telling me the correct things, and I am sure it would be tons of back and forth, but with all of these subcontractors working closely with the GC on this project and previous projects, they know each other, they already communicate well with each other, and they already know some of the issues of the other subcontractors, so they are trying to work together to get things done.  At least, that is how I feel.  Also, these were just the head guys talking to each other, work was being done to lay block, lay rebar, cut the blocks, etc. 

I have about 400-500 linear ft of footing.   I totally encased the garage in ICF, and  all of the stem walls are in ICF.  Originally, we were planning to use CMU for the interior stem walls that supported the Amdeck, but I thought it didn't make sense to switch stem wall material.  Even the stem wall under the garage door is using ICFs.  So, there is lots of work to level all of the ICF, place all of the rebar, place all of the dowels, cut all of the penetrations, create the vents.  My finished floor height is very low, and with the vapor barrier in the crawl space, I only need 4 vents.  However, because it is so low, they will need to create small wells for the vents.

Another detail that I didn't know was the rebar up the walls.  They were asking me for my window/door openings while they were laying blocks for the stem walls, and I was annoyed because I thought they haven't even poured the floor yet, why do they care about the wall openings.  I was thinking I had 3-4 weeks before they poured the walls, but then they explained to me about the rebar that will go up into the wall.  I was thinking it wasn't necessary because they already had dowels that were 3-4 ft about the top of the stem wall, and that should've secured the wall to the stem wall.  I guess ignorance isn't bliss in this case.

I am glad that I have an experienced GC, or else I wouldn't know that they were doing it correctly.  Actually, I still don't know if they are doing it correctly, but I am trusting them.  I do ask questions here and there, but I have to trust the people that I hire know what they are doing.  Just on all of the coordination of the city, the plumber, the excavation, the ICF installer, and the radiant planning, it has been worth hiring the GC.  They are spending so much time planning and meeting and discussing things, and I would probably be still trying to find a good subcontractor for each job, but I wouldn't know how to get them all talking to each other without spending even more money.

eugenep,
I was not inferring that you thought they were clearing that percentage,but I do know that there are some people that perceive that.
Oh and the other things I forgot to mention:
Accountant fees, attorney fees (there are also unscrupulous owners that never intend to pay you),Licensing fees (City, county and State) I carry 3 active licences in 3 states , and continuing education to maintain that licencing

Posted By arkie6 on 02 Nov 2013 12:17 PM

Posted By Lbear on 01 Nov 2013 06:55 PM
Met with another GC the other day and he bluntly told me that he would charge 30%-40% over the cost of the home if he was the GC...

Here is my take on this.  He just doesn't want your work.  But if the money is there, he will put up with the headaches he foresees.

.....BAM. There is such a thing as a client that scares off builders that percieve a high PITA (pain in the @$&) factor. They usually start the dialogue with how much they know about the builders job and the outrageous fees they charge.....as well as providing business and building tips

Posted By joe.ami on 03 Nov 2013 10:21 AM


.....BAM. There is such a thing as a client that scares off builders that percieve a high PITA (pain in the @$&) factor. They usually start the dialogue with how much they know about the builders job and the outrageous fees they charge.....as well as providing business and building tips

You couldn't be more wrong even if you tried making personal attacks, which you are doing. You have NO CLUE what type of dialogue I had and your assumptions are based on being condescending. So "BAM" back at you.

I know many GC's both professionally and personally and we have great relationships. The GC I mentioned above was being upfront and told me what to expect. He wants to work for me but was being honest about what he would charge in order to be a full-on GC. As a matter of fact he was offering me a discount amount as to what he usually charges others.

In the end he clearly stated that he doesn't understand "green builds" and that it would be better if he was a consultant and kept the subs (plumbing, drywall, electrical, etc) in line while I do the GC part of the build. He stated it would save me around 30%-40% in construction costs if I went that route.

You are taking this too "personally" and in turn you respond emotionally. This isn't a slam against GC's. Like I mentioned, many family members of mine are GC's, I grew up and worked on construction sites as a teenager. I understand the costs, fees, overhead, insurance, etc, that a GC has to carry in order to run a business. In my professional career I worked with GC's and fully understand how the business works.

The thread topic is simple. Depending on the area you live, most GC's in that area will NOT know how to conduct a proper green energy build. That is a fact. GBA and other sites all reiterate the same thing; most GC's don't know how to build green. So in some areas (like mine) you will NOT find a GC that knows how to approach such a project. They are basically clueless to these types of builds. So you then are left with only two options:

A - Be your own GC
B - Don't build

Simple. No need to complicate the matter or turn it into a personal attack.

What personal attack? My response was about the fact that a builder may put a premium on workin with "someone". If you take that to mean you, you might be right. I was not speaking about anyone in particular.
I was simply agreeing with arkie's insight, which by the way is still valid even if it doesn't apply to you Yogi.........ok that mighta been a bear barb ;).......actually I was thinking of someone else around here......(btw, I'm not a GC, so your assumption that I take any of this personally is mistaken)