How Builders Make MONEY
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- čas přidán 5. 07. 2024
- Learn more about building and construction with the Perkins Builder Brothers!
On this episode…
Learn all about How builders Price construction jobs to ensure that they make money. Learn the pros and cons of cost plus Building versus fixed price contracts with the Perkins Brothers!
#construction
#learning
#building
Hey! I'm so glad to stumble on this channel. I'm a small remodel contractor and between you guys and awesome framers I've really been pushed to start working on a spec house next year I would love to hear more from you guys on the business side if you're ever willing to share more.
We all know Eric edits the videos (Jamie) to make sure key points are hit without making the video too long, but his more "in depth" explanations on some things like this is really helpful. Great content and advice, thanks!
When we had our house built, I acted as general contactor, and paid the building contractor by the hour plus tool and equipment fees. This allowed me to pitch in as much as possible on the labor end, thereby saving me a ton. Especially jobsite cleanup. I made sure all necessary material was on-site, when needed. I am no professional by any means and was our first build. It was an extremely rewarding experience. Builder was very happy, as he didn't have to worry about anything except swinging a hammer.
There's golden triangle of how the job my be done. The corners of the triangle are: fast, cheap, well done. And the customer (home owner) and builder have to choose one side of that triangle. If job has to be done well and fast it won't be cheap, if it has to be done well and cheap it may take longer. If they choose fast and cheap it most likely not going to be done properly. All options have some advantages and disadvantages. The "golden point" is in the middle, but it's the hardest point to achieve.
I'd love to see that spreadsheet that Eric put together. Sounds like it's really helpful!
The men spent years to build it, don’t think they’ll wanna give it up for free
Never knew he had a CS degree, kinda explains why he uses a massive spreadsheet instead of using some pre-built software.
Builders don't give up their books or plans, that basically is their business and it's a lot of hard won knowledge
Please make more of these yall
#LetJaimeTalk!!!!
We need more Jaime! It's time for another great video. Please. 😁
Do more videos!!! you have fans here that need em
I agree reveal a spreadsheet! Lol sounds like y’all have a nice setup!
You brothers are awesome to watch funny and knowledgeable love to learn your tricks of the trade keep it up guys
Love this behind the scenes series.
Really appreciate videos like this, my brothers and I are starting a construction company and it's helpful watching guys with as much experience as you two! Would love to see more business related videos on this channel!
Loving this channel 🙌🏽
Intresting that Eric and Kyle from RR buildings both have degrees in computer science and ended up building residential structures. And also have successful CZcams channels.
Just learned about this in my contracts and specifications class. great video!
Great job. Agree 100% that building is all about expectation management.
Thank you for sharing! 👍
Think it would be awesome to spend a few days working with Jaime in his shop building something. I’m a woodworker and own a cabinet company but Jaimes knowledge would still awesome to draw from!
Love the new channel.👍
Thank you. Excellent and easy to understand explanation. Thank you Jaime and Eric.
Brothers! Put that spreadsheet for sale! You would get ton of extra motivational money ;)
Yippie. Jaime & money. Keep up the good work.
Great job articulating all that info!!
Thank you for the insight into all of this. I learned a ton, and I appreciate your willingness to show and tell us.
Good info, great video guys.
Very interesting stuff, guys! Fixed price or cost plus, both rely on the builder having a good relation with the home owners. Trust is needed to give the builder the freedom to build as he sees fit. I'd let the Perkins Builder Bros build my house, but the commute to the Netherlands each day would be a thing 😂
I am at the point of selecting a building contractor to begin the build, since you guys don't cover middle Tennesse, a pdf. file of your building contract would be VERY helpful. Is that something you would be willing to share? You guys make some great video content but this video has got to be one of the top 5. VERY good information for the customer to be aware of as well as creating the potential for the builder & customer to work together. COMMUNICATION is critical. 👍
Thanks for the advise!
Interesting video Jamie. Thanks for continuing to share your great knowledge!
Hey Jamie I accidentally found your channel????? More shout outs on the PBB Channel brother!
I just want to say I prayed for you when you had your accident and I am happy God had mercy on you !
Honor him !
I think your other channel is great, and I like this one just as much. Thanks!
Best channel evvwa!
man you guys are awesome!
I'm a Rigid guy and can't tell you how many of their drills I've blown up!🤣🤣🤣🤣
Hopefully he's got that LSA!
THANK YOU FOR THIS VIDEO. I’d love to see your spreadsheet!
Great explanation for happy customers.
Great content! As always... For us in the government contracting business specifically defense contracting we're always going back and forth between cost plus and fixed price. And the real distinction is where the risk resides. For a cost plus job, the risk resides with the client. Whereas on a fixed price job the risk resides with the contractor. Who holds the risk then largely determines how much fee you can expect to get. If the client holds all the risk I will get less fee. However if I take the risk by taking a fixed price job, then I can expect to make a larger fee.
Over here in the UK major projects are let on a design and build basis where the Contractor takes the risk for the design and construction. The Contracts are designed to place all risk onto the Contractor with the one exception being Client changes vary the price and time duration. Typical profit margins are 1 or 2%. Management Contracting became popular for a while in the 1980's coming from the USA but Client's got fed up signing blank cheques.
Great break down but my number one complaint. Are realtors wanting 5-10% commission for no risk and little to no work. But builders take all the risk for 10-20%. It’s insane and the monopoly they have.
I really want more here on this channel. Personally I'm currently struggeling with wood finishes. I know you already had a video about it, but I made stuff like a counter top extension from OSB and scraps and was wondering what finish to use, so a hot-ish pot or a water spill would ruin the finish. Or a carrying plate for pots directly from the stove. I didn't come up with a good answer other than putting a cork or silicone disk on top.
Once you have finalized plans, about how long does it put together your cost for a house?
My boss doesn't bother with all that. He charges a fixed amount for dealing with the building process (his fee, 30-60k per house) and open accounts at the material suppliers where the client buys directly. At the beginning, he gives a range to how much it should cost and a budget that he monitors to stay on track but no fixed price and he doesn't take the financial risk.
A client would be more open to pay 100k to the contractor for materials, than paying even 40k for just materials to be delivered to the job site. Some may be ok with it, but the contractor's job is to take care of everything (that's what he's paid for). Imagine the client goes to lumber yard, and they don't have the 1x4x10 but only 1x4x12. What does he do? Call the contractor? Waste of time and avoidable stress for the client.
Jaime we need MORE content!!
Do you use the Chief Architect to determine the building materials required? I have that software and am considering it to calculate material costs.
We use it to draw homes but not for material estimating.
@@jaimeperkins9606 I started to use it for rough material costs. Works pretty well but you have to spend all the time to assure wall builds, roofs, etc have the correct material types. I like the new channel!! Really appreciate you guys perspectives.
I'm here, too!
Nice!!
I would love to see you go over the pricing and timeline of one of your previous contracts in detail. I'm really interested in building a house of my own someday and I'd love to know more about the costs of each "component".
Like for the farmhouse:
- X for digging the basement
- Y for the CMU walls
- Z for the concrete footings/floor/grouting
And because we have an excellent video series for reference, the prices have a context.
Best is to ask your local contractors (or sub-contractors). But then you'll need a house plan for that. Having that info from Perkins isn't going to help you, as those prices depend on region, time of year, sometimes the relationship with the sub-contractor, how busy the sub-contractor is, etc. And material prices always change.
whered ya go brother? your channel is doing really well for just a couple vids
Nice
Great stuff! Do you guys ever do spec houses (build and then sell)?
This is why I like small jobs, in the end I make more money and in less time and hassles.
It's a twofer Sunday! Woot!
Oh yeah!! Big day! Lots of work put into it so I hope everyone enjoys
I think I know you .. lol
Another great video! Question...do you ever factor the land/lot in your fixed price for your custom homes?
Good question… Usually our clients already own the property so our price is usually just for the house. We don’t usually include Land, grading, or the well. those prices can vary so wildly in the mountainous terrain we build in.
@@thebuildingknowledgechanne7799 Thanks. My wife and I have been coming up to the Maggie Valley/Cherokee/Gatlinburg area for years, and hope to one day build a getaway place up there. Who knows, one day I may be at the right place at the right time in the right neighborhood, and purchase a Perkins Builder Brothers home??? Keep up the fantastic builds and videos!!!
We need more content!
Are you guys still going to be working on this secondary channel for extra content? Been some good and interesting knowledge
spectacular B roll footage and information graphics ... great job Erik. Jaime comes off as incredibly trustworthy. The Perkins Brothers and RayJay are publishing exquisite content.
I slammed a shot for every "maturial" and now I'm dead drunk.
I would love to buy your spreadsheet. Again great video bros
At a min in the add is Kyle from RR
Great video! thanks for the info. In regards to pricing allowances, how do you show pricing for the installation? in the example for flooring, the client has $10K to spend on flooring. I assume that is to cover cost of flooring materials only. Do you provide a seperate line for installation? What if different flooring options have large differences in installation costs. Is this negotiated with clients after they have chosen what materials they want? I imagine installing kitchen cabinets could be largely variable depending on how big and complex the kitchen is.
You can put 2-3 different installation costs, one for hardwood, one for laminate, etc. Or just decide with client that you'll put hardwood of their choosing everywhere. Hardwood installation doesn't really depend that much on the kind of hardwood. As for your kitchen question, they define the kitchen at the design time. The client only chooses the color and finishes (laminate, wood, acrylic, etc.) Same for everything else. Installing a 1000$ lighting fixture isn't much different than installing a 100$ fixture. Or a toilet...
i did not scroll through all the comments to see if someone asked this already. But, do you guys ever off a cost per SF of a specific set of plans that you have built previously? Or, is the majority of your home building completely custom?
Also - kudos to eric on slaving for hours (probably even days) to create your spreadsheet. i work for a general contractor in nebraska, and we are constantly updating our own spreadsheets.
They build custom, each house is unique, as per client's demand.
is there a difference between a contractor and a builder?
Building is easy money.
Some helpful tips in here. Wow, I need to move to NC if y'all are building for ~$200/sq. ft.
Why?
Stay away. It’s horrible here
My boss puts in stipulations in his contracts explaining, extras and incidentals that are unexpected
Eric, serious question, have you ever considered monetizing your knowledge and what you have built, such as the spreadsheet, for new contractors to use as a reference for starting out? I know my biggest fear as a new contractor is pricing jobs.
You do a few, you'll get a feeling for what costs how much. Take your time on the first jobs to price them right. Add sufficient buffer. But after about 4-5 builds, you'll get a good feel of the pricing of various subs.
How do you go about the process of figuring out whether or not the builder is trustworthy, like you were saying how they spend more to get the higher % of the cost of the build? Any tips?
See what else he built, talk to the owners (clients). Ask in local hardware stores if that contractor buys a lot from them and what they think about him. Building industry relationships, especially in smaller cities, are close, so everyone knows about everyone.
I live only an hour or so away in Brevard. Every builder I know, including my boss, uses the cost plus model. The average cost to build a house here is $300 per sqft…. 🧐 I’m thinking you might have made a serious point in this video when comparing the two.
Missing this channel guys! We know you’ve got a lot on your plates, just wanted you to know the demand is still here.
How would I go about getting a general contractor license with no experience
Thanks for the advice
How much can you make on average if you build a home from scratch and sell it for a profit?
After all said and done I always tell the home owners to have $15,000-$20,000 for their upgrades
Very good advice
Can I purchase the spreadsheet?
Hey there… I would really recommend building your own spreadsheet based on your particular business model! Things can vary so much business to business and in different locations around the world. I wouldn’t want to get someone way off by just using what works for our business.
@@thebuildingknowledgechanne7799 thanks for the reply and advice! I was more or less just wanting to see the spreadsheet and how it works like a template of sorts. I'm not very computer savvy
Hey guys old remolding carpenter here, question for ya. Who owns the home while its under construction ? The contractor the bank or the home owner. And insurance also.
I’d say for us usually it is the bank.
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@Charlotte Williams His availability is on What's=App📩☎️
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What’s the software at 6:09 ?
Home Designer Pro
We get paid by the hour, I'd say that's the easiest way. Only did a job on a bid one time, and we made a killing actually, but prefer not to do it that way.
Well…. What happened to BNC…. surely Jamie has more topics to discuss….😂😂😂
If I design a house with a complete of professional plans would you be able to give me a fixed fee. The plans would be prepared by myself. I know what cost are based on inferior material cost not labor cost. Can you show me in your spreadsheet that ratio?
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‘Muh-tur-ials’ 😜
How many shady cost plus builders gonna give you a thumbs down 😆
are you chennel sell me
What’s with all this B roll business? This info isn’t boring and I don’t need the extra distraction while trying to listen to what you’re teaching me.
Did this channel just die or what?