Roofing & Construction Industry Information Resource

To protect yourself, always check the contractor’s references. This is an essential stage of qualifying the right person for your project. Here are just a few questions to ask previous customers:

1. Could they communicate well with the remodeler?

2. Were they pleased with the quality of work? (This is a tough question, however, since everyone defines “quality” differently. It is much better to ask to see the completed project to determine the level of quality for yourself.)

3. Were they satisfied with the remodeler’s business practices?

4. Did the crew show up on time?

5. Were they comfortable with the trades people the remodeler subcontracted to?

6. Was the job completed on schedule?

7. Did the remodeler fulfill his or her contract?

8. Did the contractor stay in touch throughout the project?

9. Were the final details finished in a timely manner?

10. Would you use the remodeler again without hesitation?

1. The General Contractor: Many home improvement projects do not require professional design services and can best be handled by the experienced contractor whose knowledge of materials and methods has been gained by years on the job. Again, be sure to deal with a professional. Even though the job may be relatively small, its successful completion is important to you. Small jobs need careful planning and attention to detail too. General contractors are also the right choice for your project if you have had your project designed by an architect or designer and you now need someone to manage the construction of those designs.

For design services, your options include:

2. The Architect: Major remodeling projects require construction drawings for the purposes of defining a contract and procuring permits. In cases where your professional remodeler does not provide design services, you may wish to seek the assistance of a professionally trained architect. It is best to work with an architect experienced in remodeling-he or she will be more sensitive to the special challenges that remodeling presents. Architects are licensed by the state and have formal education and experience. They have overall knowledge of design; however, many architects do not accept smaller projects.

3. The Designer: Another option to obtain those construction drawings is to hire a certified or licensed designer. Designers may have expertise in specific areas of the home, such as: kitchens, interiors, baths, space design, etc. They often specialize in particular types of projects and may be the best choice for a targeted project.

4. The Design/Build Contractor: If you prefer to hire only one company for design and construction services, your best bet may be to hire a design/build firm. Design/build is a concept developed to benefit the remodeling homeowner by providing both quality design and construction services within the same general contracting company. A design/build contractor will be able to see your project through from start to finish, keeping design, engineering and budget in mind. Some design/build firms have architects on staff, others use certified designers.

Finding a qualified, licensed roofing contractor can be quite the challenge these days so we’ve put together our favorite  10 Tips for finding a roofing  contractor list.

1. Relatives

2. Friends

3.  Online roofing referral companies

4. Neighbors

5. Lenders

6. Architects/Designers

7. Real Estate Agents

8. Suppliers

9. Subcontractors

10. Business Colleagues

A prospect is excited about his or her plans for a dream remodel. Impressed with a certain remodeler’s references, the potential client proceeds to ask for a bid or cost estimate. But, after the remodeler presents a proposal for a quality job at a fair price, the customer gets sticker shock. Since the estimate is higher than expected, the customer now starts to look at cost reduction. At this point, the remodeler either loses the sale to a cut-rate bidder or loses the profit margin if he or she tries to accommodate the client.

For many remodelers, this chain of events is all too familiar. To circumvent this frustrating cycle, remodelers may want to try a new approach and learn to focus on helping customers understand what type of remodel will increase the value of their home. In other words, sell the job’s value rather than the cost. By discussing value versus cost, the remodeler helps customers view the job bid as an investment rather than just an expenditure –and the resulting jobs are usually larger and more profitable.

Do it like a developer

Remodelers who want to help prospects look at their jobs as equity builders first need to help homeowners understand that remodeling is real estate development.

To begin with, professional developers or spec builders don’t pay for complete plans, engineering and permits without first knowing the job cost, what value it will add, and how they’re going to pay for it. Homeowners, on the other hand, do this every day. Some sign contracts and begin construction with half the funds required to complete the job. Moreover, surveys of architects suggest half the plans they draw for homeowners never get built, are scaled down, restructured to go in phases, or are completely delayed. This is because most of these customers have neglected the financial aspects when they began their planning.

Leading remodelers are learning that by understanding the basic principles of real estate development, and applying it to each job, the customers’ equity can become their most powerful sales tool. Here are some tips to start:

* Qualifying the Property for Highest and Best Use. A real estate developer planning a project takes certain steps to determine feasibility before proceeding. By applying an appraisal principle called “highest and best use,” a developer seeks the level of improvement to a property that offers the greatest return on his money. A professional developer reviews local ordinances and deed restrictions to find out the permitted uses of the property before spending any money on design. Then, a market or feasibility study of the property is conducted to determine the cost versus “value added” for various plans.

For example, a remodeler should go to the first scheduled appointment armed with public-record information on the customer’s property. For instance, the remodeler reads the customer’s property profile and finds the customer purchased their home in January 1995 for $300,000, and had an adjustable loan for $240,000. Upon further research, comparable neighborhood home sales show that larger remodeled homes have sold for $700,000 or $175 per square foot. A complete teardown, more than doubling the size of the home, would approximately cost under $300,000. So, the remodeler can now go to this appointment knowing that the job can cost $100,000 less than the $400,000 it will add to the home’s value.

* Qualifying a Prospect for Financing. Just as a job can be limited by the property value, it’s also dependent upon the prospects’ financial status. This includes available cash, income and credit. It doesn’t matter how good a deal is if the homeowner can’t afford it.

Before working on plans or bids, it’s a good idea to qualify the buyer’s purchasing power. A homeowner, however, may feel more comfortable talking about financing with a lender rather than a contractor. A good lender is able to answer all of the prospect’s questions regarding the financial aspects of remodeling, and can help homeowners feel more comfortable with both the proposed job and the contractor.

To go back a step, the remodeler needs to find a qualified lender. A lender that finances construction is familiar with real estate development principles. Ask if the lender offers construction loans based on the completed value of the job. If they draw a blank stare, keep looking.

* Preliminary Design. When project feasibility is complete and the customer can afford the job, it’s time for a preliminary design. However, remodelers should be aware that most customers are inexperienced in real estate development, and what they ask for may not always be in their best interest. Design experience adds great value to the remodeled house and allows the remodeler to differentiate himself or herself from the competition. And while good design is cost effective, it doesn’t mean that the job must cost less. A successful remodeling design results from the art of compromise – striking a balance between style and efficiency. The objective is to make efficient use of the existing structure while designing a job that doesn’t look like a remodel.

Remodelers should keep in mind they are designing to a targeted value. If the job is to be valued similar to larger custom homes in the neighborhood, it must contain the same features. The kitchen and bathroom fixtures are easy to reproduce, but what about the overall flow of the plan? If the custom homes have 10′ ceilings downstairs, what can be done with a 30-year-old tract home with 8′ cottage-cheese ceilings? While a second-story addition that preserves the downstairs will save money, the penalty on value may be greater. In other words, to save money, many homeowners wind up approving plans with design compromises that can be devastating on resale value.

Contractors are good at cutting costs, but few seem to recognize opportunities to increase value. By taking advantage of cheap square footage, such as creating a bonus room instead of an attic, a contractor can ad substantial value for little cost. In the right neighborhood, $10,000 in increased costs can sometimes add over $40,000 to the value. In some California neighborhoods, for instance, makeovers that emphasize good design are selling for over $150,000 more than remodels of equal square footage with poor design.

Just as design/build is essential for a developer, it is for a remodeler, also. The designer should report to the remodeler, not the customer. A cooperative team approach in design allows remodelers to keep a constant eye on the budget and, by always being involved in the design meetings, can prove their expertise, thus developing a personal relationship with the client.

* The Preliminary Cost Estimate. Once a preliminary design has been agreed upon, it’s time to go over the wish list. Remodelers should have the homeowners specify the quality of the components they want to include. Now that the remodeler knows the true budget, he or she can advise the customer on the fixtures and finishes that they can afford while still adding the necessary value. With a preliminary plan and specifications in hand, most remodelers can produce an estimate that is accurate within %-10%.

This is also a good time for a value check. Most appraisers can perform an appraisal with a preliminary floor plan, elevations and a detailed description of materials. If there is going to be a value problem, it is wise to find out now, before paying for engineering and working drawings. If changes in specifications or the plan must be made to fit the budget or support the value, now is the time to make them.

Once the value has been confirmed, the homeowner and remodeler can confidently proceed with working drawings. And, because the homeowners know how their cost relates to value, they usually are comfortable proceeding with a final contract.

Example: A home was purchased three years ago for $330,000. Current value is $295,000 to $300,000. Homes with simple room additions are plentiful and attract budget-conscious buyers. Added value is less than cost to build. Comparable sales of major remodels range from $508,000 for a remodeled 2,600-sq.-ft. home ($195 sales price per foot) to $720,000 for an architect-designed custom 4,200-sq.-ft. home ($171 per foot). The only homes that have sold in the 3,000- to 3,300-sq.-ft. range have been remodels with design deficiencies resulting in much lower prices than the larger custom homes. Homes that are remodeled can be compared to the 4,000-sq.-ft. custom homes provided they are well designed to provide similar quality and modern floor plans.

The term “Project Manager” seems to cover a variety of job descriptions in the field of construction today. Depending on the size of your firm, the project manager’s responsibilities may include preparing and bidding the job, negotiating the subcontract agreements, buying out all the materials, and construction administration. But whether you are a Multi-million dollar company that has specialized departments separating estimating, purchasing and project management or a small to mid-sized company who combines many types of responsibilities in the same individual, the project manger is the person responsible for the satisfactory completion of the project.

Frank Schipper Construction Co. (FSCC) is located on the Central Coast of California in Santa Barbara, noted for its “no growth” politics. We survived the economic turmoil of the early 1990s and are now reaping the benefits of that survival-Tremendous growth.

Our motto is also our reputation, “Quality without Compromise,” and it is the deciding factor in everything we do. FSCC is noted for our ability to “fast-track” commercial projects. That means taking a reasonable progress schedule and cutting it in half!

Well, not quite in half, but you get the idea. And how do we manage to accelerate the project and still maintain profitability? Effective project management is the key.

In an industry that is fraught with incredible risk, quick response and expedient documentation by the project manager can mitigate many potential problems that drain profits.

We live in a world that is constantly changing. Our industry is not immune to these changes. Think back to how we all conducted business just 10 years ago. Computers, copiers, faxes, beepers, cellular/digital phones, e-mail &endash; few of these terms were in our vocabulary, much less and integral part of our daily lives. Technology as not only changed the way we do business but also the speed at which we conduct our business.

To stay ahead of “the pack” we must become extremely efficient in all aspects of the construction process. At FSCC, we do this with a network of delivery systems that documents the progress of the project through effective communication.

What are delivery systems? They are uniform techniques for planning, constructing and completing a project. Delivery systems are absolutely necessary for effective risk management, profitability and growth.

So, what am I saying here? Every company needs to take the time and energy to prepare an Operations Manual, a “How- To” book for project management. This will formalize the methods that you have found to be the most effective for your company.

Start with standardizing and computerizing your forms &endash; all your forms, contracts, sub-contracts, RFI’s, transmittals, submittal logs. Any repetitive form must be reviewed.

This is the time to take a good hard look at forms you’ve been using for years and update them. If your company is on-line, perhaps adding your e-mail address is appropriate.

The next step is to outline what administrative procedures are used from the time a project is brought “in-house” to the completion of that project. Write everything down!

You will be surprised at the amount of information that will come forth. Don’t assume that everyone does it your way. When our company went through the development of our Operations Manual, I was surprised that procedures I thought were standard with other project managers were not. That’s okay; maybe someone else has an easier and quicker way of accomplishing the same goal. Remember that this is a team effort!

When our Project Management Department receives a project from Estimating, much preparation is done to compile as much information as possible to give to the superintendent to be able to build as efficiently as possible. Our Estimating Department uses a Pre-job Conference Form to list the project information, construction time frame, owner information, status of required reports/permits, safety consideration, and most importantly, the estimator’s construction concerns. A complete list of subcontractors/suppliers with pertinent numbers and addresses is given, as well as copies of all subcontract agreements. Each subcontractor’ scope of work is outlined by the estimator.

Within 10 days of a project’s completion we hold a closeout meeting where we discuss how well the project proceeded to completion. We debate on what we could have done t better facilitate the job. We discuss good/bad/difficult subcontractors/architects/clients. We then discuss how FSCC can handle companies in the future for a more positive outcome.

In between the pre-job conference and the closeout meeting what are the target areas that can negatively impact profitability? I have found submittals, progress schedules, change orders and punch lists are the areas where major dollars can be lost.

Submittals are handled by reading the specifications and creating a submittal log based on the requirements. Sometimes substitutions are only allowed for submission within two weeks of the start of construction. Include as part of the subcontractor project package a letter stating when the submittals are due and the number of copies (usually six). Update the submittal log regularly. If your subcontractor does not submit by the date requested, call immediately. Often subs need a little prodding. Keep a telephone log of all pertinent conversations. Check that the architect is reviewing and returning submittals in an expedient manner. The job will come to a halt if submittals are not processed quickly and equipment is not ordered in time to meet the progress schedule. Be tenacious, don’t give up!

A preliminary progress schedule is created during the estimating phase. After bid the schedule is refined to show critical path and relationships between trades. It serves not only as a road map of the project from start to finish, but as a tool of recognizing, anticipating and compensating for the many obstacles that may affect profitability along the way. Although it is said that the only time a progress schedule is accurate is the day it is produced, update it once a month or as needed to accurately portray job status. Alert the appropriate parties immediately that their action- or lack of it- is endangering the process of the job. Time is money, especially where liquidated damages are concerned!

Everyone knows that “you don’t make a profit on change orders”. I believe that is true. Unfortunately, until architects draw perfect plans or we develop x-ray scopes to uncover as-built conditions, change orders will be a part of our process. Although no one gets rich on change orders, the improper handling of change orders has caused the demise of more that one contractor in this business. The key here is expedient documentation and resolution. Anything different from the plans and specifications is a change in the scope of work and should immediately addressed through your Request-For &endash;Information system.

RFI’s are the quickest way of alerting the architect/client that there is a question/problem regarding the plans. On your numbered RFI form have a space called “Contractor’s Opinion”. Always offer your solution to the problem that has arisen. Being proactive shows that you are a team member willing to share your experience to bring swift resolution.

Who has authorization to sign change orders? Most of the time the architect has the power to approve for the client. However, sometimes the client has retained that privilege alone. This can become a very important legal point later. So know up-front whose signature must appear. Process change orders throughout the job. Don’t wait until the end of the job to present “99″ change orders. I guarantee you that your client will not be a happy camper and you may be out the money. Get it in writing as you go.

Why do contractors spend so much energy to complete a project on time and within budget, then dribble away profits with lagging punch lists and closeout documents? Project closeout must begin with the startup phase. The submittal log must indicate what is required for proper closeout from each trade. Do not wait until the end of the job to begin gathering this information. Make sure you and your subcontractors on a monthly basis update the “As-Builts” drawings kept on the job. There is nothing more tedious than trying to recreate As-Builts after the fact. No update, no money!

Lagging punch list items can become profit “sieves”. Organize the architect/client, all consultants and the project manager or superintendent to walk the job and agree upon items to be included on the punch list. Send a letter to the architect requesting one combined punch list. Depending on the size of the project, you should receive the list in seven to ten days of the walk-though. Read the list carefully to be sure that what is on the list is what you agreed to. Identify each subcontractor’s work and mail copies of the punch list to each one. Attach a letter stating the time frame in which they are to complete their items. Check to make sure this has been accomplished. Call the architect to walk the job after you have made sure everything on the list has been done. How do you get the architect/client to release retention ahead of the completion of the punch list? The project manager and the architect should agree upon a fair and proper amount of monies to be held so the rest of the retention can be released.

Is project management easy? No, but it is the most challenging and gratifying work I know. Walking through a completed project gives me a sense of fulfillment and satisfaction that is hard to compare, for I leave a little bit of myself in its wood, steel and concrete.