90602 Cost Breakdown and SubContract

Importance of the Cost Breakdown 1. It’s hard to hit a target that you dont have.

“Surprises” are almost never in the happy direction.

2. It’s hard to hold your crew and subcontractors to a budget unless you really have one.

3. Your team will enjoy beating budgets and timelines and you’ll enjoy rewarding them for excellence.

4. You must always know your exit before you enter.

The cost breakdown connects the two and gives you a measurement of how your plan is working.

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Cos t Br Gre eakdo You enEar wn us ed b rs m thEq y uitie ay b e di s ffere . nt

1.

DEMO & TRASH HAUL

2. LANDSCAPE 3.

CONCRETE

4.

FENCES/GATES

5.

POOLS & SPAS

6. FOUNDATION REPAIR 7. EXTERIOR CARPENTRY 8. PLUMBING 9. EXTERIOR ELECTRICAL

Cos

t Co

des

Onl y

10. ROOF/GUTTERS/CHIMNEY 11. WINDOWS 12. STUCCO, DASH & MASONRY 13. GARAGE DOORS/CARPORTS 14. EXTERIOR PAINTING 15. INTERIOR ROUGH CARPENTRY 16. INTERIOR ROUGH ELECTRICAL

19. DRYWALL & PLASTER 20. INTERIOR CARPENTRY 21. COUNTERTOPS 22. INTERIOR PLUMBING 23. CERAMIC TILE 24. INTERIOR PAINT & RESURFACING 25. ELECTRICAL FIXTURES 26. MIRRORS 27. FLOORING 28. APPLIANCES 29. HARDWARE & SUNDRIES 30. MAKE READY TO SELL Other Costs Contingency 10% Insurance Utilities Taxes

17. INSULATION & SEALING

Interest

18. HVAC

Other Total

Any Questions?

What else would you add?

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Q. Keeping track of costs?

A. Choices: Paper Checkbook Excell SpreadSheet QuickBooks Specialty Construction Software

A2. In all cases you will want to cost code all expenses, from hours worked to Home Depot purchases according to your cost code list and the address of the project

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Q. Best choice for first time or one at a time?

A1. Open a business checking account named with the address of the property. Get wallet sized checks with carbon copies.

A2. Discipline yourself to pay everything with those checks.

A3. Your CPA will love you.

When the house is sold, close out the account and start another one for the next house.

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A3. You want to minimize hourly labor by using qualified subcontractors as much as possible.

But if you have any hourly labor: Design a custom time card that makes it easy for employees to give you the correct information.

Most hourly employees will work for the subs or the general contractor. The general contractor will probably have a similar system.

Time Cards with cost coding are to be done daily.

After the end of the day the memory seems to fade.

(This memory fade almost never results in a lower or more accurate number.)

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Q. Who are the players?

A1. We have found it best to subcontract as much work as possible. This is really the only way to control your costs. After all the bids are in, you will know your costs almost exactly and your profit --(if you sell the project as you have planned) A2. Subcontract all the “Big Chunks” of work HVAC, Roof, Concrete, Tile, Granite, Paint, Windows, Drywall, Insulation, Stucco, Plumbing, Electrical, Floors, Landscape etc.

A3. Then Contract a “General Contractor” to supervise all the subs in A2 above and do all the rest of the smaller jobs. This should be a fixed number so that all your costs are then fixed.

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Q. What does the GC do (either himself or with his employees?)

A1. Everything not done by subcontractors.

Some examples might be: (some of these might be subs) Board-Up and Re-Keying, Demolition and haul to Re Store Finish Carpentry, doors, casing, base, crown etc Cabinet install, Hardware install Appliance Install,* Mirrors, Fixtures And mainly supervise all the subcontractors.

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Q. If subs do everything, what do I do?

A1. Maintain the Energy-Wise aspect of your operation. Many will tempt you to take shortcuts.

A2. Be finding the next project.

A3. Market to get them sold quickly.

A4. Continuing Education. On Real Estate, Remodeling and Energy Efficiency.

A5. If you want to, you can help your community thru consulting with politicians & non profits. Habitat etc.

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Job Walk Thru Form The forms on the following pages are expanded And intended for use two ways: 1. Paper form to make notes during the walk around And use as a check list to not miss anything 2. Back at the office the form is a live Excel spreadsheet To use for adding everything up.

Note: Keep this form to review weekly and at the end To see how close your estimates were.

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