Hi to all on the group....My wife and I are acting as general contractor in building our 3400sq ft house. We plan on using a construction manager but we will be greatly involved in papar/jobsite stuff also. I am wondering what would I expect to pay for a construction manager?
thanks,
Eric

ERIC, IT REALLY DEPENDS ON THE AMOUNT OF WORK YOU & YOUR SPOUSE ARE GOING TO DO... EX: MY WIFE & i PD ALL THE BILLS, REVIEWED (& SOMETIMES AQUIRED) ALL THE QUOTES FOR EACH JOB BY A SUB. (NEVER LESS THAN 3) I ACTUALLY DID ALOT OF THE WORK MYSELF & KICKED EVERBODY OUT FOR 10 DAYS TO DO ALL THE FINISH & TRIM WORK. IE BASEBRD, WINDOWS (CASINGS & SILLS) HUNG THE DRS, WINDOWS, CHAIR RAIL MLDGS,CROWN, SHELVES N EVERY CLOSET, ETC. WITH ALL THIS IN MIND, WE HAD TO HAVE A "TURN-KEY" CONTRACT WITH A CLASS A BLDR FOR THE BANK TO GIVE US THE MONEY TO BUILD. HE DID VERY LITTLE BY COMPARISON TO MOST JOBS. WE NEGOTIATED TO AN ACCEPTABLE FEE OF 12000. THIS I FELT WAS FAIR. USE YOUR JUDGMENT & DISCRETION.
PS OUR HOUSE IS 3800 SQ FT UNDER ROOF.
HOPE THIS HELPS
DON

I think it is important to understand the difference between a construction manager and a general contractor. A construction manager makes sure a job stays on schedule and on budget and he/she works directly for the owner. They are there to make sure the job gets done correctly and nobody tries to rip them off. The positive thing about hiring a construction manager is that no money is passed through them and all bills for all subs go directly to the owner and are paid directly by the owner. Therefore the owner has full control and can feel confident that there is no "GC" mark up which happens more times than none. A CM works for a flat rate decided upon and agreed to up front, so there are no hidden surprises anywhere down the line. Typically the fee is figured monthly and is broken down by the number of hours a person is required to be at a particular job. This is based on a schedule which is also hammered out and agreed to at inception of the project. A rough number to throw out there as far as cost for a CM would be 10% of the estimated construction cost although there are many variables that can come into play that can change this number.

Shoot, you should all just move to Idaho and build your houses. I own a remodeling and construction company. We do mostly upscale remodeling which includes projects upwards to $200K, yet most are in the $30K-75K range. Obviously, a lot of this includes additions but also includes major build-outs of homes.

We are a GC and use project managers (construction managers if you prefer) on every project. As a former business management consultant (and before that, a financial consultant) within the construction industry I can assure you that we are very profitable within our industry when compared to industry standards.

With this in mind I only wish to say that we are able to build homes for $110-150 per square foot. Our labor costs are significantly lower than in many of the North Atlantic and Midwestern States, which is a partial reason for such low costs.

I would gladly hire out one of my project managers (if I didn't have them already booked out through August, now) at the $12,000 fee on the build-out of a 3,800 sq ft home that Shuttsy paid if it were in my geographic area. My project manager would be in heaven as for the ease of project management for new construction vs that of the remodel industry we primarily work in. As it is we run multiple projects for each project manager, now (rarely can they run more than two).

Overall, we do run from project where the homeowner trys to be involved in the day to day operations. Having said that we also make sure that the client (homeowner) is informed on a daily basis of the project status, timelines, problems, resolutions, costs, etc. Yet, every time we have had a client get or try to get between us and the subcontractor (or our direct employees for that matter) we have had problems. There can only be one person in charge on any given project and I insist that our project manager is that person. Everyone, including me runs everything through that person.

If a person wants to be the GC, I am here to tell you that it will take tons of time as you have been hearing in this board. Should you choose to take this pathway, heed the advice as to the time it will take. Subs are only as good as the individual or people within them. There are both good and bad. If the homeowner is acting as the GC, be prepared to have cost overruns, blueprints not followed, architects who have drawn something which can't be built or is not in the best interest of the homeowner to build as designed.

I am personally on-site almost every day for every project and even with my experience and vision am surprised by something almost on a weekly basis.

My advice is to weigh the cost to you as to time and emotional trauma that managing a project of this magnatude and then simply decide what is best for you. It is you that you need to please, not anyone else. You will pay a price for whatever pathway you take. One will be financial and the other will be physical, mental and emotional.

Oh, I should tell you that on an industry wide basis new home builders only net out 8-10% for their investment and efforts when they build new homes. To be honest, if I were not in the industry, knowing what I know, I'd let someone else have the heartburn for that money. I'd just be diligent that I was on-site often and in touch with my contractor a lot.

Good luck with your project regardless of the choice you take.