Track Your Home Building Project From Design Concept

Through Construction

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Contact +Information

Paul Huff – PrincipalPaul@AppleBuilt.com

(o)360.352-4400(f) 360.352.8877(c) 360.239.6878

www.AppleBuilt.com

Free Consultations by Phone or EmailCall for Appointment

Stay Organized –

• Get OneNote from Microsoft

• It will keep you organized through design and construction

• It will serve as major tool to coordinate with your builder.

It Will Help You To:

• Gather everything in one place

• Find what you're looking for quickly

• Work together more effectively

• Go to Microsoft to Learn More

A Way to Be Organized & Coordinate the Team

Before Beginning Work with Your Design/Builder:

Gathering Information

• Collect Magazines Clippings & On-Line Material Finds.

• Start building a file for Clippings and Brochures.

• Save all of these in “Microsoft OneNote”. Learn to use it for collecting on line material & for keeping your notes & links. You’ll never regret using this system.

• Find 3 to 5 house plans on line that you like. Save the links and list what you like and done like about these plans.

• Take Notes on homes in your community that you like and what you like about them.

Budgeting & Financing

• Know what financial assets will you bring to the project? Be honest and realistic.

• Work with your lender to establish your loan amount.

• Know what your limits are and be willing to sacrifice passionate desire for reality.

• Be straight with your Builder about your true budget so that you can work intelligently as a team.

Understanding Restrictions on Your

Land or Lot:• Get a copy of the (CC&Rs)

Covenants, Conditions, and Restrictions governing your land use, read it thoroughly and turn it into bullet points in OneNote.

• Get rules of Homeowners' Association (HOAs), if there is one, & put it in OneNote.

• Contact the local Permitting Authority and find out:• The Set-Backs from your

property lines.• Height restrictions for

the house.

Finding a Design/Builder you can trust: Competitive bids NOT the answer.

• Competitive bids are usually cheap guesswork. Why? Because a true line item bid requires dozens of hours of information gathering and calculations. With no assurance of getting the job, most contractors “Ballpark” the numbers and figure on getting it right later in cost overruns and change orders.

• Looking for the lowest bid may assure you of the "cheapest" home, but are you really looking for "cheap?" Often a cheap bid spirals down into bad costly experiences.

Finding the Right Match

• Choose your builder the same way you choose any professional - by reputation, experience and warranty.

• Success comes from Planning – Planning – Planning. Find a detail planner. Designing & Building a home involves thousands of details. Time, effort and money spent on planning today always – always saves double later.

• “Build it Twice” Make Sure your builder builds it twice– Meaning build every detail first, on paper AND THEN build the physical house.

• Make a list of Interview Questions and interview your Builder Prospects

• Check your Builder Prospect’s License and Bond

• Get a List and Check Your Builder’s Bank, Trade and Customer References

What Is Design/Build?How it Works

• Design/Build is a construction system where the design and construction aspects are contracted for with a single entity known as the design builder.

• This system is used to minimize the project risk for an owner and to reduce the delivery schedule.

Benefits of design-build

• Better communication between the contractor and the client

• Better accountability by the contractor

• Having a single source project delivery

• A value based project feedback system

The Horror Story of “Over Budget”

• 70% of traditional contracts end up over budget

• 25-30% of Design / Build contracts are over budget

• The overage of a Design/Build project is generally owner driven

• The overage in traditional methods is usually due to a budget disconnect on the part of many architects and design professionals.

Designing A Custom Home Two (2) Paths You Can Take

One Method is to Use an Architect

•If your site has extreme constraints or if your construction budget exceeds $800 thousand, then a design professional may be in order.

•This method will cost between $10 and $30 thousand for Architectural Design and Drafting. (Does not include engineering, material selections or estimating).

Second Method - Design & Develop your Project with

your Builder•Find 3 floor plans on-line or from books or magazines, that come close to what you want.

•Find 3 pictures of house exteriors that represent the style of home that you like.

•Gather Clippings from magazines, books, photos and on-line resources that show your preferences for materials such as cabinets, countertops, railings, flooring and lighting.

•Bring this gathered information to the design meeting with your Design/Builder.

•You’ll by guided by your Design/Builder through the rest of the process.

•You’ll cut the costs in half of what it would cost with an architect or design professional.

A Contract Agreement

•In either case, Architect or Collaborating with the Design/Builder, you should sign a formal agreement with the Design/Builder or Architect that clearly outlines the mutual obligations.

•You should include a demand that the design will build to your budget.

Build A 3-D Model, +Working Drawings & Engineering

Have a 3D Computer Model so you can:

• Walk Around And Through Your Virtual Home.

• View Spatial Relationships, Shadows And Textures.

• Experience Daily And Seasonal Solar Tracking.

• Resolve Construction And Material Conflicts Before Construction.

Drafting The Final Drawings

• About 50% of the work is complete when you sign off on the floor plans. For a permit set of Working Drawings.

• Several more hours of Drafting are needed to complete the details.

Engineering

• Finally, the permit set of working drawings is complete when the Engineer Calculates the structural elements.

• The Cost Of Engineering Varies Based On The Size And Complexity Of The Structure. On Average, engineering will Cost under $1500.

• The engineer’s work should formally copied onto the plans to prevent confusion during construction. This is the final phase of drafting the plans and making them ready for permit.

Selecting Material & Interior Design

What Material & Who Does It?

• Cabinets, Countertops, Flooring, Lighting Fixtures, Plumbing Fixtures, Wall Finishes, Interior & Exterior Doors, Windows, Trim Moldings, Fireplace & Mantel, Tile, Stairs and Railings, Paint Colors -- All these & more need to be chosen.

• Your Design/Builder Should be prepared to lead & collaborate through this process in an orderly way.

• Make sure you have a budget laid down for each category.

• Use OneNote from Microsoft to collect your information.

Things to Watch Out for:

• Don’t get carried away with the “Yes But I Want It” syndrome. Stick to your budget. Work closely with your Builder through this process.

• When shopping, always have your budget allowances with you and know the costs.

• If you go over in one category, compensate by going under budget in another.

• Lock in your choices by recording the model, brand, size and so on. Don’t choose “place holders” and assume you will make the final selection later. Your builder and lender will need real choices with final dollar amounts.

• For the final estimate that will go to the bank, everything needs to be chosen. Avoid allowances in your estimate which can come back to bite you in the checkbook.

Estimating the CostsThe Firm Bid vs. The

Cost Plus Method

• The Fixed Price Contract implies that the contractor has calculated all material, labor and overhead costs and is willing to sign a contract for an exact dollar amount.

• The Cost Plus Contracts implies that the contractor will build the house for whatever the direct costs are plus a certain percentage of markup over and above those direct costs.

• Most lenders require a Fixed Price.

Money – Estimating The Project

• A good Estimate should be transparent.

• Each Construction Phase should be listed and should include all labor & material costs listed line by line.

• The Builder’s Overhead Costs covers the management work needed; things like Superintendent, Scheduling & Bookkeeping and should be listed separately.

• The Builder’s Profit Margin is what the builder hopes to earn for the job; is usually a % of the total project and should be listed separately.

• All relevant Taxes need to be added onto the bottom line.

Time – Scheduling The Project

• Estimates are Time Sensitive meaning that costs can change over time. Most estimates are good only for a short period of time It’s important to have everything in order, such as financing, when the final estimate is submitted.

Scheduling For Both the Design Phase & The Construction Phase

Milestones and Deadlines are Important

• Without Schedules, Time slip by through design & estimating phase. Work with your Design/Builder to establish a design schedule.

• The Main Categories of a Design/Development Schedule are• Conceptual Design & Budget• Drafting Floor Plans & Elevations• 3D Renderings• Material Selections• Final Working Drawings• Final Estimates

• Construction Schedules are built by the Contractor. Ask for a copy and track it together. Your Construction Loan has a time limit. If your builder goes past the limit, you may pay extra.

The Tools You’ll Need

• Use an on-line source for sharing Data like Microsoft Share Point on a Server

• OneNote• Always ask “By When” and get

commitments from the players.• Log in the tasks, people and time

commitments to the shared data base.• Change the subject line on every

email to match the communication and save to the shared site.

• Microsoft Project or some other scheduling program should be used by your builder and updated contemporaneously.

Financing – Managing Your Construction Loan

How to Find a Good Lender

• Not all Banks do Construction Loans

• Builders can often recommend a lender that they have a good working relationship with.

• Don’t pay closing costs on 2 loans meaning construction and then mortgage

• Understand the Construction Draw Process (how the builder gets paid)

• How does your Lender handle deposits for things like cabinets or special orders like elevators.

• Make sure your builder understands the limits imposed by the lender in releasing payments.

What You Lender Needs

• Appraising the Value of your future home a necessary step in establishing your construction loan. The Appraiser will need a set of plans and specifications. This process usually takes 2 to 4 weeks.

• Lender will want a resume from your Builder.

• Lender will need a Final Detailed Estimate.

• Lender will need a copy of the Construction Contract.

• After all Documents are reviewed and the Appraisal is complete, the lender will set a date for Closing of the Construction Loan.

Recovering Design Costs

• You can roll your Design/Development costs into your Construction Loan. Those initial costs such as drafting, material selections and engineering are usually paid out of pocket.

• If you want to recover that money then have the Builder include those costs in the estimate and the Lender will usually pay back that money at closing of the Construction Loan.

Permits & Building CodesPermits

• The cost and time it takes to complete the permitting process varies widely depending on the time of year, the scope of your project and the jurisdiction.

• Your builder is best qualified to prepare and submit for the permits

Codes

• Codes are becoming increasingly stringent.

• The primary reason for codes and inspections is for structural integrity, safety and energy efficiency.

Inspections

• It is extremely important to keep a cooperative working relationship with the permitting inspector.

• By tracking the inspection process, you can see how well your builder is doing. In other words, does he usually pass his inspections or is he often rejected and given corrections to do.

• If You are Building Green, you may need 3rd party inspections by the Green Building Certifier at various stages throughout the process.

• Photos and Video of the project at each phase of construction are advised. Sometimes an inspection question will arise later and good photos can often resolve the questions.

Contact +Information

Paul Huff – PrincipalPaul@AppleBuilt.com

(o)360.352-4400(f) 360.352.8877(c) 360.239.6878

www.AppleBuilt.com

The Indian Creek Business Center2745 Martin Way E, Lobby SuiteOlympia, WA 98506

Apple Construction LLCWA Lic. # APPLEH*946R1

Where Design,Technology and

Eco-Integrity Unite