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The Four Attributes of a Good Owner Builder - Your Construction Loan and Project Depends on Them

Aug 28, 2008
Owner builder construction can save you 15% to 35% during the construction of your own home by cutting the costs of hiring a general contractor. However, if you don't take the planning and construction seriously, then you could end up losing a lot of money and your dream home. Therefore, you need to have these four attributes to be a successful owner builder.

1. An owner builder will need to have strong project management skills. Owner builder construction loans are designed to allow you to act as your own general contractor. That means that you are going to hire your own sub-contractors and oversee their work. Therefore, an owner builder must be able to successfully manage the hiring of multiple sub-contractors as well as manage their labor during construction.

Owner builder construction is simply a long project. And, if you have sound project management skills, then you should be able to manage the construction of your new home. For example, you will need to make sure your sub-contractors show up to work on time, stay through a full day's worth of work, and actually perform quality work during construction.

Because an owner builder is the general contractor for the construction loan, it will be your job to keep all of the sub-contractors informed about the timeline of the project. For instance, if your foundation is taking longer than anticipated, you will need to let your framing crew know immediately so you can schedule when they need to be on site to start the framing. If an owner builder doesn't keep the labor strictly scheduled, he will lose precious time and money during construction.

2. A successful owner builder will be good at planning. Most people unfortunately make the mistake of assuming that the most important aspect of owner builder construction is during the actual construction phase. But a smart owner builder knows that the battle is won or lost during the planning phase.

In fact, owner builder construction loans are designed to help you with this part of the process. During the loan and planning stages, an owner builder will take the time to find the right piece of land to go with the right home plans. Then, a budget needs to be compiled based on written bids and quotes from local sub-contractors who have reviewed the blueprints.

If an owner builder fails to take these steps seriously, they will fail during construction. In other words, if you rush through the planning stages, you will have trouble getting your building permits and will lose a lot of time and money in labor and materials during the actual construction.

3. A good owner builder understands the value of follow-up and inspections. If you don't take the time to inspect the materials that are delivered on site or inspect the labor that your sub-contractors have completed, then your home will be riddled with problems by the time you move in.

This is not to say that an owner builder has to be able to personally inspect the sub-contractors' labor to ensure it meets specific building codes. That would require years of experience in the building industry, which is not a requirement to be a good owner builder. Instead, you need to take the time to be on site with local county building inspectors.

As each phase of construction is completed, make sure that the county inspectors are doing a thorough inspection to ensure the labor and materials in your home exceed the minimum building code requirements. In fact, you should not pay any of your sub-contractors for their labor until their work has been thoroughly inspected and deemed satisfactory. An owner builder who pays their sub-contractors for labor before satisfactory work is completed will have a very hard time getting those sub-contractors back on site to make any necessary corrections.

4. Owner builder construction requires strong negotiation skills. If you want to save as much money as possible while building your own home, then you will need to be willing to negotiate for lower labor and material costs.

In today's housing market, an owner builder truly has a great advantage when it comes to negotiating with sub-contractors. A few years ago, sub-contractors were in high demand as everyone was building as many homes as possible. With the current housing market slow down, the construction has also slowed down.

This means that there are a lot of hungry sub-contractors looking for work. This means that a savvy owner builder can negotiate for lower labor and material costs to save as much money as possible. Don't be shy about it. Remember, the sub-contractors will be working for you - not the other way around.

So, if you want to be a successful owner builder, you will stand a much better chance if you know and fully understand the importance of these four attributes. Notice that not one of these attributes mentions anything about having to be able to swing a hammer or hang drywall. Instead, owner builder construction is won or lost at the planning and management level.
About the Author
Chris Esposito specializes in owner builder construction loans, helping people act as their own general contractor to build their homes. Visit Owner Builder 101 for more information about owner builder planning and financing. Go to Owner Builder 101, or call (877) 876-3688.
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