Cost of being your own G.C. vs. hiring a G.C.
Hello, I have a small/medium renovation project and found a couple general contractors I'd be happy to hire but they're taking a while to get back me with their bids, etc. I'm assuming this is b/c not only are they busy, but they're waiting for their subs to get back to them about their estimates. So while I wait for them to get back to me, I've been finding meeting with licensed subs through Yelp and BPN, getting prompt responses and and fairly quick availability. My question is... have you found hiring your own subs to be more cost-effective vs. hiring the G.C. and his team? (I do have the time to be my own G.C. and don't mind the project managing, though I don't love it; but I also can't sit around waiting when I've found subs who can start soon.)
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My husband and I served as our own GC for a major home renovation in 2016 and compared to the quote we received at the beginning of the project from a well known/well used GC we saved a SUBSTANTIAL amount (like over 100k). If you have the time and know how to do it I highly recommend it. Just be sure to consider what needs to happen when, for example, wiring and inspections before you have drywall hung, etc. If you're good at planning you'll be great as your own GC. Congrats and good luck!
If you are up for the challenge, it is infinitely more affordable. We found the cost difference was 2-4x less than contractor bids. The trickier pieces are that you'll have to be comfortable navigating the permitting process and building codes, figuring out how to coordinate timing between trades (and being willing to wait for availability when it doesn't line up), and doing specs for materials and scope of work. I personally prefer doing this myself--we have done projects both ways--but you have to have time for it. (A lot of time!) We are doing a project with a GC right now because our lives are too crazy to GC it, and I don't think the quality is as good as the projects we've managed ourselves, which is frustrating. The upside is that we don't have to do anything other than let them in each day. But since I notice all the problems, I find it maddening and almost wish we had GCed it this time around too. (YMMV based on the skill/experience of the GC you choose, though.) If you have time and are willing to do it, it's definitely worth considering. I will also add that we had a huge issue with a small/medium project getting quotes from contractors because they were looking for larger projects--a few even said upfront that they wouldn't do "small" projects (which by Bay Area standards can mean anything from <$100K to <$500K). Just something to be mindful of.
That’s a great question. I just had a lot of updates to my home and used a general contractor who had worked on another house on my block and we established rapport quickly. I booked and paid for windows and flooring directly with those companies. The contractor and his employee did painting, dry rot work, and a fence, and hauling, and was available to assist with prepping for the windows and flooring as needed. The contractor charged the same hourly rates regardless of the task, which seemed to come reasonable.
Hiring a GC will add 30% mínimum (and likely even more) to the cost of the project. Typically a GC charges a fee for their time plus markup on all of their subcontractors’ bids.
If you have the time you’ll save substantially but frankly the headache was not worth the savings to me.
We did the owner-as-contractor thing thirty years ago and do not regret it. Neither my husband nor I have a building trades background, but I have project management skills.
We built our entire house. For the framing and rough plumbing we hired a licensed general contractor. I managed all the subs. The only problem was with the drywall people. They underbid themselves and walked off the job after an altercation with the butch tile contractor. This is a beloved and funny family story now, but we felt great consternation when the drywall people filed a mechanic's lien.
We did have issues with getting financing. The situation on that score has changed since the early 1990s. If you can pay cash, this is not an issue. But if it is a construction loan, the lender could interfere with your plans. Don't know whether a home equity loan would cause such a situation. You might want to check with a mortgage broker who does this type of financing.
As others have written, you will need to deal with the city permit office, but we had well drafted plans and did not have major problems, except that the construction lender wanted to see permits, then stalled long enough that the permits expired before the loan was approved. We were surprised by the expired permits, but we got them re-instated. Another family story: I went to the permit counter with my toddler son in a backpack, and he fussed "BYE-BYE, BYE-BYE, BYE-BYE" until one old building inspector emerged with a giant bag of candy to get him to shut up. The entire office burst out laughing at the sudden silence when our sugar-deprived 2-year old beheld this bounty