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Show Notes:
General Contractors versus Sub Contractors and what is their role in the new kit home building process with an Owner Builder. Should they be involved with the design processes of a new home? Assembly of Landmark’s panelized home package.
Transcript:
Interviewer: Hello everyone. And welcome to Episode 28 of the Panelized Prefab Kit Home Building Show. With me in the studio as always is the President and Founder of Landmark Home and Land Company, a company which has been helping people build their homes where they want exactly as they want across the nation and worldwide since 1993. And that man would be Steve Tuma. Steve, how are you doing today?
Steve Landmark: Excellent. How are you doing today?
Interviewer: I am great actually, couldn’t be any better.
Steve Landmark: It’s a great day in paradise, home building paradise.
Interviewer: Home building paradise. That’s right. I wanted to spend this episode talking about contractors, something that you have some knowledge of I’m sure. I know you’ve dealt with a lot of contractors over the years. And I think our listeners would welcome the chance to hear some of your thoughts. So just open it up at the beginning, how does one go about finding and choosing the right contractor for them?
Steve Landmark: Well, that’s an interesting presses because you can always go through and check out reviews, talk to the Better Business Bureau, get recommendations from friends, and sometimes you can just get one contractor that will then lead you on to other contractors. Like in my own projects, I found that excavation contractors always know foundation people. Foundation people always know the framers. They always seem to be in the same circles, working on similar projects where they always run into each other.
So what we always suggest is you get a set of plans for the house and then talk to contractors, foundation person, framing contractors, plumbers, and electricians because there are a lot of people asking the contractors for beds and they would be like, “Hey, how much is that 2000-square foot home?” Well, that’s kind of calling the grocery store and asking him how much dinner is. It’s kind of funny. When I put it that way, people understand.
Interviewer: Right.
Steve Landmark: It’s one of the best …
Interviewer: Perfect analogy right there.
Steve Landmark: Yeah, it is. But the point is well-taken. It’s kind of – so if you were the contractor and said, “Hey …” and someone asked you how much is a 2000-square foot house is, there’s a lot of stuff going through your head. Is it a one story? Is it a 2-story? Where is it at? Is the land flat? Is it in the city? Is it on the country? Do you want gold faucets in there or regular nice faucets? There are so many different variables. So when you get the opportunity to talk to the contractor, you want to have something kind of definite to talk about. You want to say, “Hey, here’s the plan. I’m building on this piece of land.” And then there’s something where he can help actually help you or she can actually help you to get you an answer to your question because they are busy and they want to know that they are working on a project that has a strong chance of coming to life and becoming a reality.
Interviewer: Right.
Steve Landmark: So it’s not just a matter of you finding a contractor. It’s presenting it in a proper way so that the contractor says, “Hey Mr. Smith, you are a viable candidate to work with.” It’s worth putting time into putting the bid together. So you’ve got to make sure that you’ve got a good presentation and understanding of where you want to build, show that you put some effort into it, let them know the financial position of your project, are you waiting for financing, do you have financing or paying cash, whatever it may be. And then I think you will find that they have a tendency to take you seriously when you’ve done your homework and present it to them properly.
Interviewer: So contractors will network with the other sort of specialist that you need.
Steve Landmark: Right.
Interviewer: That would seem – so finding the contractor is probably the first place to start I would imagine.
Steve Landmark: Yeah. It’s not like you’ve to get all the contractors at one time. Start with one or two and they could lead you to other people.
Now, what’s interesting about this is a lot of our customers, the subcontractors are right in their family or in their friends – their circle of friends or in groups that they belong to so that they’ve got an access to these people. So that’s a situation where sometimes or a lot of our customers actually go through and build their own home. It’s a different degree. Some of them will actually go through and build everything because they’ve got friends and family in all the trades. Others will – how your general contractor that will coordinate the subcontractors for them. So there are different degrees of involvement.
Interviewer: What’s the difference? While we are on this, we might as well go over it. What is the difference exactly between a general contractor and a subcontractor and which is a better fit for the owner/builder?
Steve Landmark: It varies on the situations. Some customers want to just say, “Hey, build this house here. I’ll see you in a few months.” Other customers want to be deeply involved and knowing who is working on their home, what work they are doing, what the reputation is, the quality of work that they do. So a general contractor will contract the whole home. That’s basically you would go to this person and they would say, “Hey, your house costs this much.” And they will work with the subcontractors to take it from a raw lot to a finished house.
A subcontractor is the person that’s hired to do the work. Say, kind of like the individual heating man, the air conditioning, the plumber, the electrician. So he subcontracts to the general contractor.
Now, the point of this which is the interesting thing is that as an owner/builder, you can be your own general contractor. So if you are acting as your own general contractor, you would hire subcontractors to do the work. So I might be creating a little confusion. If you’re someone that says hey – you just want the house done, you would hire a general contractor. If you want some involvement to control your cost, the quality, and know exactly what’s going on in your project, the schedule, the budget, you would act as a general contractor to build your own home and you would hire the subcontractors to do the individual components, excavate, the foundation, whatever it may be. And that’s a key element. You can also control the cost, the schedule, and all the details. And you can also control change orders a lot and minimize expenses as a result of those.
Interviewer: Would you say when it comes to panelized home building, I mean that’s really what this show is all about, would you say most contractors that you’ve run into they actually know what panelized home building is? They have experience with panelized home building?
Steve Landmark: Well, this is the interesting thing about this is they all have experience with it. Do they understand the word panelized home? So the funny thing about is sometimes they would be like, “Well, I don’t know what a penalized home is.” It’s exactly what they do in a stick building process. Our panelized process is a more efficient method of stick building. We make it in a controlled environment, deliver the components, meaning the wall panels and trusses to the site, and then the contractor picks each component and put it in place. So while one goes up, while two goes next, or while three goes next it, and so forth around the home until the structure is completed. The funny thing is a lot of contractors, framing contractors, they will say, “Oh, I don’t know what a panelization is.” It’s the exact same thing they are doing. Their system just doesn’t help you control the cost and schedule as much because it’s affected by weather and fluctuations in wood markets. So when a contractor goes through and he gets a framing crew, they go estimate the amount of materials. They have a lumberyard deliver the materials. The materials get delivered to the site as individual pieces, 2x4s, 2x6s, sheets of OSB, and so on.
They then determined how to cut the wood so that they can make a wall panel. They make a wall panel and lift it up. So they’ve already done it but the nature of their stick building is that they are making a panel for a wall, lifting it up and putting it in place. Ours is already pre-built. So it’s kind of a funny thing that sometimes they will say, “Hey, I don’t know what panelization is.” But they are already doing it. It’s just a perspective shift and a viewpoint. So yes, any framing contractor can assemble it. We supply very clear and accurate assembly plans and we are always available if there are any questions on how to put the home together. That being said, every once in a while, the contractor would be like, “Well, I don’t understand it. I don’t know.” We always say, “Hey, have the person give us a call. We will review the processes and let them understand the nuances of how it’s easier and quicker for them and they can actually make more money because they can finish your project quicker and get on to the next one.”
Interviewer: This is kind of side thing but while you were saying that, I was thinking it seems like panelized home building where everything comes – your wall panels come prebuilt, it seems like that save on a lot of lumber. I mean there are no mistakes made. It’s already coming preassembled. And I’ve seen contractors, I’ve seen builders’ work where oops, screwed up that piece of 2×4 and that kind of thing. And it seems like that’s one way to really keep your cost down.
Steve Landmark: That’s exactly it because we have programs that say exactly the materials that are there, the computers know exactly how to cut them. And what’s interesting is it’s a greener process. You would not have the dumpster bills that you do with stick building because you’re not throwing all the materials away. And by the way, you’ve paid for those materials that are getting thrown away.
Interviewer: Right. Yeah.
Steve Landmark: In our process, if there’s – let’s just say there’s a 2×6 and it comes 8 feet long and your wall needs a 6-foot long one, in our process the 2-fott one is use somewhere else, in your home or someone else’s home. So there isn’t as much waste. In fact, in our plants, every piece of wood beyond 2 inches long gets reused and even the ones under 2 inches, they get shredded to be used for animal bedding.
Interviewer: Oh, I see. That’s great.
Steve Landmark: So when you look at the green factor of it, yes, it’s greener. It also controls the cost. You have less waste, and waste and hassles and miscut just raise your budget and delay the schedule. It comes to a control issue. With our system, you know what’s there. It just needs to be put in place. You can do it quicker. It’s just a smoother process.
Interviewer: Well, back to the original point of the question before I sidetracked just a little bit, so your opinion is a good contractor will find it fairly easy to understand the process of panelized home construction.
Steve Landmark: Yes. What we found over time is that the contractors that run a tight ship, they understand their business, see the benefits of panelized home packages. The reason being is they can build – frame the house or build your house quicker and get on to the next process. It’s much like a restaurant. Everyone has heard of the turn of the tables where hey, if a restaurant can turn their tables two times at a dinner seating instead of one time, they could serve more customers and therefore make more money. The same thing is true with the building and framing of a home. This also allows people in areas where there’s limited building seasons up in Rockies and Sierras or where there’s control over rainy seasons where you’re able to get a house built and occupied much quicker. So there are a lot of reasons that the panelization process.
But getting back to the contractor, yes, a contractor that understands the cost of his business, scheduling things, making sure things get done right will find a big benefit to panelization. That’s why so many commercial projects are done with panelization. It’s quicker. They can get the building occupied and let the building do what it needs to do of get the family into it.
Interviewer: Right. Makes sense. Now, let’s talk about the design process a little bit and how – and the contractor’s involvement. I mean let’s just say it straight. How involved should my contractor be in my design?
Steve Landmark: Well, it all depends on when you choose your contractor that’s going to build it. What I always suggest is we’ve got very good designers, engineers, green code people, energy efficiency people where we can go through and do it. Generally, the customer will determine what type of house they want whether they want a 2-story contemporary home, a modern home, a ranch home of some type, whatever it may be. So we can work with them to get the plans put together in the initial stages. But as you move along to the building processes, it’s always good to run it by the contractors. I’ll tell you the reason why.
Some contractors do things slightly different than others. That doesn’t mean they are right or wrong. It just means that they do things differently. Sometimes there are different projects that are built in different ways in different areas. The example that we run into a lot is slab foundations. Some areas, it’s customary to do a monolithic port. Others, the want stem walls or kind of across space type situation. Other times, they want port walls. Other times, they need to be made out of block. So when we are in the finalization stage, right about there, it’s good to get them involved so that they can go through and say, “Hey, over here, we do it this way.” And we’ve got pretty good understanding of what’s going on. But it’s good to have their involvement so that they buy into the project to understand what’s going on. And ultimately, we want to make sure it’s a good project for the customer, the contractor, ourselves to make sure that the home is built right, built properly, is easy to get permitted, and make sure that the inspections get approved right away. So our key in all of this with our customer and any subcontractors is the clear communication. We are readily available, we are proactive, and we are very knowledgeable. So we want to do whatever we can to support our customer’s project to make sure they end up with the best home possible.
Interviewer: Let’s talk about the cost end of this thing with contractors. I mean on a panelized home project, let’s say, is a contractor going to be less expensive on that, on a project like that or as opposed to a traditional home building project? And if that’s the case, why?
Steve Landmark: Yes, it should be less expensive. The prime example is that most of the work is done and the wall framing and design and cutting and engineering details of a panelized package. So they don’t have to go through and sort everything out saying, “How many boards do I need for this wall? How do I have to cut it? What angles come into play?” The complexities of it. So in general, to assemble a panelized kit is probably 40-50% of the stick built cost for the same design. But what people don’t always look at are the ripple effects of follow-up cost. You don’t have the dumpster cost, the house gets framed quicker so there’s of a chance of being affected by weather. If you have a construction loan, your financing fees don’t go on. There’s just a lot of little ripple effect details. So the impact of getting the house framed quicker and more effectively is a ripple effect that definitely shows a cost advantage as well as a scheduling advantage. Who is the last family you heard of that said, “Oh, take forever to build my house.” They are like, “Hey, I want to get in tomorrow.” So the reality is that it helps control the quality and get people in quicker.
Interviewer: Fantastic! Well, this has been great. We are out of time for today on the Panelized Prefab Kit Home Building Show but before we go, I want to give Steve a chance as always to let people know how they can contact Landmark Home and Land Company.
Steve Landmark: The best way is to take a look at our website. The company name is Landmark Home and Land Company and you can see us at LHLC.com. That’s basically the initials for Land Home and Land Company, LHLC.com. You can email us at – you can email me at Landmark@LHLC.com. You can call and Mike will answer the phone, 800-830-9788. We also have Instagram, Pinterest, YouTube, and Facebook channels that people can look at.
They key to it is we are available. We are proactive. We will do whatever we can to help. We realized you might not be wanting to start your project today. You might have to sort a few things out. And if it takes a little time to help you get positioned properly to move forward, we are there to help you. If you want to get going today, we are also here to help you. So thank you.
Interviewer: Help is the thing and you guys are well-known over at Landmark for your great customer service, something to be proud of and you guys you just do a great job over there.
Steve Landmark: That’s the key to it is make sure the house gets built properly.
Interviewer: I mean after how many years now …
Steve Landmark: Since 1993.
Interviewer: Yeah.
Steve Landmark: Pretty amazing.
Interviewer: I’d say that says a lot about the customer …
Steve Landmark: A quarter of a century.
Interviewer: A quarter of a century. Do you feel old now?
Steve Landmark: Yeah.
[Laughter]
Interviewer: Well, excellent. So for Steve Tuma and myself, thanks everybody for listening and we will see you next time.
Steve Landmark: Thank you.
