General Contractor Question

[barleyfarmer]

For all the general contractors out there what is the average markup up for your subs?I'm building a house since last fall and I'm getting a little suspicious about what he's marking up his sub-contractors invoices!I understand how business works and you need to charge when you hire someone but he seems to be charging about 20% and up!The general isn't supplying materials or anything just lining them up!What has other guys been finding or have been charging for subs?We're from a small town and it's local guys that everyone knows each other and shoots the sh.. when you go in to see how things are going so numbers start slipping out!!One thing I find is bs is he is charging me for his zoom boom!He brought it out in December for floor joists,walls,trusses,etc!He charged me $1500 in January for use of zoom boom and I got another bill last week and another $1500 was on there for the zoom boom!!Shouldn't that be included in the cost of framing,siding,roofing,blablabla?I'm thinking now that we are at the mudding taping stage I might say eff it and run him off and line my own guys up!Because it seems that for everything that he gets billed $10000 he adds 5 or 6 on to my bill!He also tells me the cost increases have been because of material prices rising because all the materials were headed south after last summers flood down south!!I blew up on that one because I've been supplying all the materials from my local Coop and they have been damn near dead on with their quote from last July!I would hate to be one of those a-hole homeowners and run him off but I'm fully capable of finishing whats left or at least lining guys up for it!His quote for hanging ceiling in basement of 1680 sqft house is $10000!!

 

[250mark1]

I am doing a Reno and my contractor charges 20% markup on his prices on material and subcontractors and he gives me copies of all of the invoices form suppliers and subs

 

[TeenWolf]

For all the general contractors out there what is the average markup up for your subs?I'm building a house since last fall and I'm getting a little suspicious about what he's marking up his sub-contractors invoices!I understand how business works and you need to charge when you hire someone but he seems to be charging about 20% and up!The general isn't supplying materials or anything just lining them up!What has other guys been finding or have been charging for subs?We're from a small town and it's local guys that everyone knows each other and shoots the sh.. when you go in to see how things are going so numbers start slipping out!!One thing I find is bs is he is charging me for his zoom boom!He brought it out in December for floor joists,walls,trusses,etc!He charged me $1500 in January for use of zoom boom and I got another bill last week and another $1500 was on there for the zoom boom!!Shouldn't that be included in the cost of framing,siding,roofing,blablabla?I'm thinking now that we are at the mudding taping stage I might say eff it and run him off and line my own guys up!Because it seems that for everything that he gets billed $10000 he adds 5 or 6 on to my bill!He also tells me the cost increases have been because of material prices rising because all the materials were headed south after last summers flood down south!!I blew up on that one because I've been supplying all the materials from my local Coop and they have been damn near dead on with their quote from last July!I would hate to be one of those a-hole homeowners and run him off but I'm fully capable of finishing whats left or at least lining guys up for it!His quote for hanging ceiling in basement of 1680 sqft house is $10000!!

15-20% margins are pretty standard. Look at it this way. If something happens and one of those trades screws up,Who are you calling? Your general. He's also liable for the trades he brings on site. %20 for him to organize and be responsible for the entire project is a fair price.

As for the Zoom boom. If he owns it generally it would be worked into his price or at least quoted you the operating fee upfront. If he rents it the you're covering the cost of the rental. But this should have been stated up front in your original contract or communications.

$10000 for a tbar ceiling in an 800 sq foot basement seems pretty steep. But I'm not a tbar guy I'm just an electrician so I can't tell you if that number is accurate or not.

 

[drew562]

I charge $4,00 per sq for Tbar ceiling with a standard radar tile. My install guys charge me $1,10 per foot. Materials come in around 1,30 for grid and tiles. 10 k is huge for a basement.

 

[LUCKY 7]

if this guy leaves you high and dry you can always apply to go on the tv show "to catch a contractor" great show!

 

[sledneck_03]

JESUS, my build bill no lot is $400,000 so my general got $80,000 from that? hmmmmmmm. Im not sure a full house would be 20%...

The positives are, he gets great prices on the supplies and better prices than some one off the street for labour. He also funds the whole thing till turn key with a small % down. In my case..

 

[TeenWolf]

JESUS, my build bill no lot is $400,000 so my general got $80,000 from that? hmmmmmmm. Im not sure a full house would be 20%...

The positives are, he gets great prices on the supplies and better prices than some one off the street for labour. He also funds the whole thing till turn key with a small % down. In my case..

If you were your own general you could have potentially save upwards of $100k on a build. Mark up is a killer. Think about basement development from new home builders or organizing trades your self. On an house let s say 1600 sq ft. a finished basement package would cost you anywhere between $40k-$50k. Be your own general would be around $25K-$30k.

Also keep in mind that that 10-20% Mark up is not pure profit. Insurance, payroll, taxes ect eat up most of that money. In e end after paying himself and all other bills his company as maybe made a profit of $15-$20k for 2-4 months of work? $80k is not an unrealistic number.

 

[storm1972]

15 to 20 percent is right on par, I've been a general for the last 6 years, and found when I started that if I kept my subs ect at around 5 percent , I didn't make any profit. Like the above poster stated, wcb, insurance, all that extra stuff you don't really think about eats that 20 percent up very quickly. All contractors that bring in heavy equiptment will charge for its use, typically on an hourly base, or if it's rented then a daily base. No getting around that, don't matter how big or small the contractors business is, heavy equiptment has heavy costs involved in its use, just to rent a zoom boom for a day is 300 plus, so it doesn't take long to add up

 

[snochuk]

15 to 20 percent is right on par, I've been a general for the last 6 years, and found when I started that if I kept my subs ect at around 5 percent , I didn't make any profit. Like the above poster stated, wcb, insurance, all that extra stuff you don't really think about eats that 20 percent up very quickly. All contractors that bring in heavy equiptment will charge for its use, typically on an hourly base, or if it's rented then a daily base. No getting around that, don't matter how big or small the contractors business is, heavy equiptment has heavy costs involved in its use, just to rent a zoom boom for a day is 300 plus, so it doesn't take long to add up

15-20 is normal, one thing that is not mentioned is RISK. On a lump sum project where the general assumes all risk you bet 20% is reasonable. On cost reimbursable there is no risk to the general and therefore the markup is substantially less. For industrial it is usually in the 3-6% range. Labor on a lump sum job is typically your biggest risk and can swing upward by 50% fom uncontrolled delays like weather, design change and even labor shortage to maintain schedule which leads to OT costs but no better productivity.
RISK - just remember who is assuming this and then dicide fixed price (controls overall cost) or reimbursable and assume all risk yourself for a chance at lower costs.
It's a choice thingy.

 

[nast70]

The $1500.00 for a zoom boom isn't unreasonable after you add in delivery and pick up. we rent them in town and a big jlg man lift is $1200.00 delivered to the site.

 

[Murminator]

i agree with the 20% for the GC I don't understand paying the zoom boom rental eff that if that is part of the tools for job when the GC or sub bids on it what next oh ya we needed a saw to do the job or a new nailer. Does a roofer charge you for the ladder to get on the roof? does the siding guy charge you for scaffolding? no those are tools of the trade if they need a zoom boom to make life easier for them, their cost on it if not use a ladder....just sayin

 

[TeenWolf]

i agree with the 20% for the GC I don't understand paying the zoom boom rental eff that if that is part of the tools for job when the GC or sub bids on it what next oh ya we needed a saw to do the job or a new nailer. Does a roofer charge you for the ladder to get on the roof? does the siding guy charge you for scaffolding? no those are tools of the trade if they need a zoom boom to make life easier for them, their cost on it if not use a ladder....just sayin

You don't want to pay for a zoom boom that's perfectly fine. But then you're going to pay for the extras labour it takes to bring in extra guys and work of ladders. Your right ladders and scoffilding. Drills and hammers are tools of the trade. Heavy equipment are extras.

 

[storm1972]

Also take into consideration the labour savings with having that peice of equiptment on site, may seem trivial to most people, however I've framed many a 2-3 storey houses and have had to hand balm trusses, roof sheathing, shingles , it takes a substantial amount of time doing so, as well as very big risks of injury , resulting in huge wcb claims ... Heavy equiptment for residential will never fall into a basic tool category needed for the job. A ladder or nail gun is a couple hun max, a zoom boom with a reach of 60-80 feet is a couple dollars more lol, some specialized contractors may have them because they are a constantly used item, and it pays for itself, most general contractors don't have that luxury considering when we hand the homeowner their final bill, half the time we get screwed , hasn't happened to me knock on wood but has almost closed doors on a few people I know who are very good and reputable.


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[TeenWolf]

This topic is exactly why I prefer to deal with a general contractors or avoid residential all together. As an electrical contractor it's less of a hassle to justify costs to a general. And in commercial service or renovations most business owners realize how costs add up quickly. As a home owner I get trying to get the best deal possible. But as business owner I also understand you get what you pay for most of the time. Sure you can find some second year to come wire your basement for $20/hr. But he's not insured and his experience level and workmanship are usually not up to acceptable standards. No one is checking his work and making sure he doesn't burn down your house.

So just be aware the next time you're complaining about costs that quality work is not cheap. And cheap work is usually not quality work.

 

[Murminator]

You don't want to pay for a zoom boom that's perfectly fine. But then you're going to pay for the extras labour it takes to bring in extra guys and work of ladders. Your right ladders and scoffilding. Drills and hammers are tools of the trade. Heavy equipment are extras.

Also take into consideration the labour savings with having that peice of equiptment on site, may seem trivial to most people, however I've framed many a 2-3 storey houses and have had to hand balm trusses, roof sheathing, shingles , it takes a substantial amount of time doing so, as well as very big risks of injury , resulting in huge wcb claims ... Heavy equiptment for residential will never fall into a basic tool category needed for the job. A ladder or nail gun is a couple hun max, a zoom boom with a reach of 60-80 feet is a couple dollars more lol, some specialized contractors may have them because they are a constantly used item, and it pays for itself, most general contractors don't have that luxury considering when we hand the homeowner their final bill, half the time we get screwed , hasn't happened to me knock on wood but has almost closed doors on a few people I know who are very good and reputable.


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I'm not disagreeing with the use of a zoom boom to save labour money time whatever, after we have a price don't hit me with extras to help you and expect me to pay. If i was to take my truck to summitric to have my tires changed over he says Murm it will $100 then after the fact he wants to give me a bill for and extra $25 for the use of his hoist because it was quicker and easier and saved time and money for him rather than a guy with jack i'd tell him to pound sand

 

[imdoo'n]

I'm not disagreeing with the use of a zoom boom to save labour money time whatever, after we have a price don't hit me with extras to help you and expect me to pay. If i was to take my truck to summitric to have my tires changed over he says Murm it will $100 then after the fact he wants to give me a bill for and extra $25 for the use of his hoist because it was quicker and easier and saved time and money for him rather than a guy with jack i'd tell him to pound sand

do you pay extra for shop supplies?

 

[Murminator]

do you pay extra for shop supplies?

If it is built into his estimate yes

 

[storm1972]

do you pay extra for shop supplies?

Most shops do add at least 5% for shop supplies, wether they use a shop towel or nothing at all, either way your paying . I do agree with murm on the aspect that the cost for that should be discussed up front with the homeowner, hiding such costs is never good. Building houses will always have "extras" involved, reason being is homeowners are forever changing their minds during one part of the build or another. Haven't built a home to exact specs once, and have had homeowners add and subtract this and that to the tune of 20-80k sometimes, somebody is going to pay for it and sure as chit isn't coming from the measly profit margin on the build lol. I won't even touch a new build anymore there simply isn't any money in it, because homeowners want people to do it for free basically. You want high end work your going to pay for it, you want leaky windows, crooked hardwood with gaps, shingles blowing off .... Hire a dude that charges 20 bucks an hour, and smokes weed all day long lol


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[gates559]

I think you hired someone to do construction management not a general contractor. 20% is way to much for someone not fronting the bills, supplying new home warranty etc. 20% is a lot to make some phone calls.

 

[storm1972]

I think you hired someone to do construction management not a general contractor. 20% is way to much for someone not fronting the bills, supplying new home warranty etc. 20% is a lot to make some phone calls.

The general does both


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