ADU Project -- Contractor Selection and Negotiations

Dear community! I am about to embark on a basement ADU and attic development project that is going to be quite substantial in cost and complexities. Naturally, I would like to keep costs down. I am looking to learn from your experiences around sourcing and project management for this sort of undertakings.

For example:

  • Searching and identifying (short listing) contractors -- Where did you search, and how did you go about evaluating qualifications to meet the needs of your project? Did you send out a questioner to contractors?
  • Negotiations -- Requesting / receiving bids and cost negotiating – what was your process? How many proposals did you solicit? How did you compare and analyzed the bids? Did you negotiate the cost? Why or why not? What was your approach / strategy? What was the contractor/s reaction (willing or unwilling to negotiate)? What were the biggest challenges and what were the end results of the negotiations (lowered by x%)?
  • Contracts and timelines – Did you negotiate the terms and timelines? Did you write a formal contract? Did you consult with a legal professional, used a template, or just worked with the documents provided by the contractor? In retrospect, do you feel a more binding/stronger contract could have spared you some headaches?
  • If you chose not to negotiate (costs and/or terms), what drove that decision and what were your concerns (harm future relationships, uncomfortable negotiating, no time, stressful, lack of expertise, lack of resources and tools, other)?
  • Project management – did you hire someone to manage the project? Did you do it yourself? What drove either decision? Are there any online tools you can recommend? What were your biggest lessons-learned?
  • At the end, are you satisfied with your process and the results of your project management and negotiations approach? Did you enjoy it and would you do it again? Why or why not? Did you use any online tools that you can recommend? If you had to do it over again, what would you change?
  • In general, where were your biggest challenges, and what would you do different next time? What tips and advice can you share.

Any and all advise, tips and insights you are willing to share are GREATLY Appreciated!

Thanks! Nervous First Timer

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Be very careful.  We went through this whole similar experience about this time last year.  Of course costs are always a concern, but what really put the kibosh on our project was the various and byzantine permitting process from the City of Berkeley.  They were in the process of changing their guidelines/etc., and each contractor we spoke to made it sound WAY TOO EASY or WAY TO DIFFICULT to navigate the process, which, apparently, could be costly AND THEN the application for the ADU could be rejected...It simply wasn't worth the aggravation.  Furthermore, in seeking someone to work with, we were disappointed by Design firms, building firms, and Design/build firms, which we thought would really offer the best option-- it turns out that even the Design/Build people were subcontracting out, and we were paying extra administrative fees right and left.  We finally decided it was NOT worth our while (or sanity) to continue this project.  Even professionals who came to us via friends' referrals, ended up being unacceptable. : (

On March 9, 2019 at the Rockridge Library, we attended ADUs in Oakland presentation. 

The Oakland Rent Board, Oakland Permit Department, City of Oakland representative plus two private facilitators (Loni Gray and one for Oakland and the other, for Berkeley [I believe]) and contractors, lender and architect who are familiar with the ADU process. 

After this 2 hour meeting, our family will be making appointments with architects and contractors who have done this sort of work to get estimates - basement, small cottage or modular?   We will also make multiple trips to Oakland and Berkeley to find out what the permitting process is and whether or not our ADU will be rent controlled [we'd like to rent it out until we actually need to use it]  Loni Gray led the ADU Seminar last November and intends to have more --  On March 25, Loni and her group held an ADUs in Berkeley presentation.  The name of Loni Gray's group is ADU Task Force.  They are a volunteer organization, but well informed.  

I am not going to be able to answer all those questions, but I will provide my thoughts/opinions on a few. I asked friends and neighbors for suggestions. If I saw a contractor in the neighborhood, I asked for his/her business card. Get at least three bids. The lowest is not necessarily the best choice. Contractors are very busy; the good ones are booked out several years. You are probably just going to have to accept any bid they provide and be thankful you found someone to do the job. No negotiations. Whether to manage or not depends on your comfort level and your knowledge. Can't give advice on that. But no matter what, you have to keep an eye on the job and make sure that the work is done to your specs. Contractors and subs do stupid stuff to cut corners. Watch out! I love using the space after the project is done. I enjoy it everyday. So, yes, I would do it again. Be aware, that some contractors and subs will take the job and start on time, but they are working three jobs, so are only on yours part-time. Very frustrating! Also, don't pay too much upfront. There are laws about that. Google it. Some contractors take the money and run. 

As to the question of hiring a manager:  this all depends on your ability to understand and manage the process, and devote time to it.

As a given you need a general contractor who can be trusted and will deal fairly.  But keep in mind a general contractor works for themselves.  A construction
manager works only for you.  At times this won't matter, at times it can be crucial.  A construction manager can take can of the myriad of details that come up, and stand up for your position if and when needed.  But at a cost in money, and in potential for adding complexity to the project (additional communication, and the need for the general to satisfy both you and the manager).