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Are big, national builders good for subs?

Julie-G's picture

If you were a subcontractor, would the opportunity to "get in" with one of the national builders (Pulte, KB Homes, DR Horton) in your area be a good thing or not? 

I can't quite figure that out because those builders pay a lot less per unit than the subs are accustomed to getting. Say, a framer is use to $7/sf, then Pulte might pay $5/sf. But, it might be 2-10x the volume though.

Can a sub actually gear up their business to make a lot of money going this route?

Thanks!

Yes, you make up the lack of (post #207375, reply #1 of 13)

Yes, you make up the lack of profit on volume! The big builders will be your best friend until someone cheaper comes along. Then they won't remeber your name.

Florida Licensed Building Contractor, 40 years experience in commercial remodeling, new homes, home remodeling and repairs and all types building maintenance.

JG (post #207375, reply #2 of 13)

Might be a way for someone to get a start, the experience and knowledge necessary to get a business off the ground.

But, cheap pay means less work and less work leads to something being left out.  That's a bad system to get into.

Sometimes it works, sometimes you have to go back later and pull all the caulk off the wall/ceiling at the crown mldg, because they caulked it to the freshly sanded drywall which lasted not long.  Renail all the crown as it was minimally nailed to nothing.  All to be ready for the "house tour" in the development.  This was the big "builders" house.

More than a couple hundred feet of crown.

10 yrs after, big "builder" is out of business and his subs?

 

Defeating that "fast, good, and cheap-pick two" is rare.

A Great Place for Information, Comraderie, and a Sucker Punch.

Remodeling Contractor just outside the Glass City.


http://www.quittintime.com/

 


Just speaking in (post #207375, reply #3 of 13)

Just speaking in generalities, don't work for the largest, and prefer a privately-held company to one that's publicly traded.

Large companies have bean counters, and one of them is apt to go nuts over how much is spent on paper clips while completely ignoring the fact that upper management is making stupid decisions that cost the company millions in the long term.  For that reason, maintaining good relations with employees and suppliers may become (very) low priority when there's an opportunity for an immediate, short-term profit (on paper, at least).

When you're large and publicly held it's hard to resist this pressure to do this sort of thing.  The second and third tier companies, and those that are privately held, can resist better, and MAY have reasonably good policies for dealing with suppliers (though can expect them to drive a hard bargain).


Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed.  --Herman Melville

Depends on scope and scale (post #207375, reply #4 of 13)

The scope and scale determine if it makes sense. 

If you can get contracted for a 400 unit subdivision, you will be building 80 of five floor plans.  After the second of each plan. all the bugs are worked out, and a crew can be highly efficient.  This allows you to make a profit, at lower prices. 

What you do need to understand that their PM gets bonuses based on milestones and closings.  So there will be constant pressure to get things done quickly, and little allowance for delays.  If your whole crew gets the dirty thin nastys, by eating from the same gut wagon, and you are down for two days, they might kick you off the job.  They will definitely kick the gut wagon off the job. 

I worked for one of the three you mentioned in Las Vegas (2003 to 2005), when things were crazy there.  We were going from slab to closing, on 3300 to 3900-sf single family two story homes, in as little as 26-days.  This means: two days to frame and sheath; half a day to insualate, etc.  To do this you need to be highly organized, and ready to work long days.  I used to have to be onsite to unlock gates at 5:30, and honk my horn at 7:00 to let the trades know that the noise ordinance wasn't in effect so they could start work.  I was back onsite in the evening to be sure that the trades were shutdown by 10:00 when the noise restrictions came back in effect.  The subs crews worked all day, every day to keep up.  Thanksgiving, Christmas, and New Years were the only days they took off.  We had two meetings a day for the subs supers and foremen, to coordinate and update each other on how things were going, and which buildings were going to be ready for the next trade when.  You did not want to be the one who slowed things down, and the subs pushed each other harder than I did. 

One of the other PMs described us as a pack of wolves.  If a sub stumbled we ate him, and got fresh meat. 

jigs (post #207375, reply #5 of 13)

What was the "left out" ratio on these builds?

A Great Place for Information, Comraderie, and a Sucker Punch.

Remodeling Contractor just outside the Glass City.


http://www.quittintime.com/

 


Not quite sure what you mean (post #207375, reply #7 of 13)

Do you want to know how oftern things got left out that should of been included?  Things occaisionally got left out at the model, and rarely on first couple of production homes, but virtually never after that. We would occaisionally end up with paint schemes, cabinet color, or the counter top type. 

If you want to know what kind of waste stream was generated onsite:  We typically generated a 6-yard dumpster per house. 

jigs (post #207375, reply #9 of 13)

I meant things that make a difference, that get covered up and all too often get left out.

Nailers, lath catchers, blocking, and the ever popular - kick out flashing.

Simple things like unsealed cuts on the bottom of wood or sheet siding or trim boards on those chimney chase's that down the road-7 or so yrs, end up a punky mess.

A Great Place for Information, Comraderie, and a Sucker Punch.

Remodeling Contractor just outside the Glass City.


http://www.quittintime.com/

 


Very Few (post #207375, reply #10 of 13)

There were building champions that worked for us that were responsible for catching things like that, and my primary job was to spend the day out walking the site/buildings to baby sit the subs. 

I paid subs bounties for catching the previous guys screw-ups.  So, if there was wire run to nowhere, or a box with out wire the drywall guys would let me know to get the five bucks.  The concrete guy missed embedments or got them in the wrong place, the framers were sure to let me know, and I would be sure to let the concrete guy know. 

jigs (post #207375, reply #11 of 13)

Surprising those types of things didn't slow things down.  Was this a development where the other trades would be immediately at your beck and call?

And how about those other things I mentioned-unsealed cuts on wood (or worse yet, unpainted / primed backsides and at least an uncut end) and the semi non usual flashings (apart from step flashing?).  Remodeling and repair-burns the heck out of me that these things have become more than commonplace.

A Great Place for Information, Comraderie, and a Sucker Punch.

Remodeling Contractor just outside the Glass City.


http://www.quittintime.com/

 


Subs there constantly (post #207375, reply #13 of 13)

When you wer in mid project on a 200+ unit subdivision, all the trades are there all the time.  You work away from the common area, main gate and models to keep construction traffic down past the occupied homes, and use the "fire' gates in teh perimeter wall as the construction access. 

At that time things were busy enough that there were three major prjects going within a 2-mile radius. so even if a given sub wasn't on the site that day, they had a crew minutes away.  And when you start jumping all over them and making them come back to fix screw ups, they either learn to do it right, or you don't give them the contract for the next phase of the project. 

Every thing there is slab on grade, stucco exterior, with concrete tile roofs.  The air handler for the heat pump was mounted in the attic.  Plumbing, and electric went underground to the slab.  So, there were very few pentrations. 

Other than door trim, the only exterior wood was a facia board on the end of the rafter tails, and that all got painted when they sprayed the color on the stucco.  Exterior details were done in foam, and then sprayed with stucco.  There was a galvanized metal flashing/plate that installed under the sills to provide a chair for the stucco to sit on so no exposures there. 

These things were designed, and redesigned to minimize the labor required to do them and go up fast.  At that time the company had been building the same models for three years.  The plans were dialed in, the subs were experienced in building them, and very dialed in.  So things just went up with minimum issues.   

The only real issue I ever had was a painting and drwyall sub who decided he wanted to bid work with other developers, and over extended himself to the point he was delaying things.  Two of his foremen quit and formed their own company, and got the contract for the next phase.  Things went well after that. 

I've never been a sub.  But (post #207375, reply #6 of 13)

I've never been a sub.  But over the past ~25 years I've sold a lot of roof trusses to tract builders.

It typically goes something like this:  We bid the job. They shop prices agressively, and beat us to death over them. The low bidder always gets the job. The tract builders may talk about quality, but they don't walk the walk. 

I've worked with comepanies who ahve tried offering discounts.  Like if you order 2 identical houses at the same time we'll knock $100 off the price of each houe. They'll take it that we've lowered our prices by $100 a  house, and ill never pay the single house price.

Once you get a job you're expected to jump through endless hoops. "We've decided to move this house ahead of that one, so you need to move it up to some impossible date in your production schedule".   "We forgot to order this house, but we still need it delivered Monday. If you can't get it we have someone else who can take over the project."   "That house should have had a vault in the master bedroom. It's not shown on the plan, but Joe thinks he told you. So you have to replace the trusses at no cost to us. And we want them there first thing in the morning."

 

The framers have also been beat to death on price, so they try to back-charge us for anything they can think of on every house.

It's an endless rat race to the bottom. As long as I live I hope I never have to sell another truss to a tract builder.

Surely you must have been a (post #207375, reply #12 of 13)

Surely you must have been a sub in another life. You nailed it exactly.

Florida Licensed Building Contractor, 40 years experience in commercial remodeling, new homes, home remodeling and repairs and all types building maintenance.