Chicagobusiness.com

Can you be your own contractor?

By Jeffrey Steele

Eighteen years ago, Silva Mirzoian decided to renovate a relatively simple Beverly Hills, Calif., bungalow into an upscale Santa Fe-style hacienda. She made one enormous mistake.

She decided to serve as her own general contractor.

"I figured I would save money, and be more in charge of bringing in the contractors, and would build it my own way," she recalls. "I was burned badly that way, financially, emotionally and mentally. Contractors would not show up for work, or they would demand more money before they would show up or order materials."

Looking back, Ms. Mirzoian admits the massive undertaking took two months longer than it should have, and estimates it cost at least 25% more than it otherwise would have.

It takes a very special person to serve as the general contractor on his or her own home. And that's not just Ms. Mirzoian's observation. It's also the conviction of architects and builders who have culled both success and horror stories from the annals of do-it-yourself general contracting.

Photo by Rich Mattas

"There are truly enterprising people who want to do it themselves," says Dennis Smalley, president of the Glenview-based construction company that bears his name. "And they can save 20% to 30%. It's called sweat equity. But it's terribly time consuming."

Architect John Hershey, president of Mundelein's JMH Architects, agrees. The degree of complexity and coordination involved in building an upscale residential structure can overwhelm a novice, he remarks. Many who have never served as a general contractor before, enter the process with the impression the role is simply a matter of contacting subcontractors, obtaining prices, approving their contracts and letting them know when they need to be at the site, he says.

"The actuality is that from the time the job starts through the completion, there's much more coordination the general contractor must go through with each subcontractor," he says. "And typically, because of the nature of a residence, there are many overlapping elements. A trade may have to come in, do some work, leave to make room for another trade and then come back."

According to Mr. Smalley, the general contracting process begins by acquiring a parcel of land and hiring an architect or using a plan service to provide a set of house plans. Next comes a test to check how the soil absorbs water, followed by a grading plan performed by an engineer. If you're serving as general contractor, next plan on making interior finish and exterior material selections. That means choosing the roofing, siding, windows, doors, garage doors and gutters.

Inside, the choices extend to floor finishes, cabinetry, millwork, standing and running trim, counter finishes, bathroom finishes, bathroom and kitchen accessories, plumbing fixtures, lighting fixtures, appliances and paint colors. All this is required to complete a finish schedule that determines what the subcontractors will bid on the project.

You will then have to spend four weeks full time or six to eight weeks part time soliciting bids from subcontractors, Mr. Smalley says.

"Just the practical aspects of finding a contractor, sending him the plans and then giving him a list to make sure everything is included in his bid will take days," he observes.

"And then, once you get bids back from these contractors, you have to analyze them to ensure they're apples-to-apples comparisons. And inherent in all this is that the subcontractors know you will only be using them once. That's a really key point. They're not going to be as responsive as they would be if you were their regular customer."

Once the winning bidders have been notified, work can begin. But plan on being on-site a couple of hours each morning, Mr. Smalley says. That's to make sure subcontractors show up, or to alter the schedule to accommodate those that don't. At the end of the day, calls will have to be made to subcontractors to determine whether problems arose during the day, and make any changes in sequencing that may be required the following day.

"So you have three to four hours a day of work," Mr. Smalley says.

Count on working Saturdays as well, cleaning up after work performed by subcontractors during the week.

This day is also reserved for an array of miscellaneous tasks, such as setting up heaters, pumping the basement, erecting temporary enclosures and installing dehumidifiers. And don't forget the endless job of protecting inside finish surfaces, often with paper and tape.

After work is done, the issue of lien releases remains, Ms. Mirzoian notes. When contractors begin work on a home, they generally buy materials on account. Vendors of those materials will send the general contractor a preliminary lien notice stating no payment has yet been made.

"When the job is completed and the contractor asks for final payment, you need to obtain release of that lien prior to payment," she says. "If not, you've paid the contractor, but if the contractor doesn't settle up his account, you still have an outstanding balance with that vendor. And the vendor will come back and demand payment from you."

It may seem hopelessly complicated. Nonetheless, regular folks have pulled off the general contracting job with flying colors. So says Bud Dietrich, owner of HFD Architects in Deerfield. Mr. Dietrich has served as the architect to homeowners handling their own general contracting chores on two occasions. "Both times it worked out really well," he says.

In one case, a commercial airline pilot served as his own general contractor while building his Deerfield home. Mr. Dietrich worked closely with him, supplying names of subcontractors and suppliers, and advising on how to sequence the various aspects of construction.

The homeowner handled substantial work normally subcontracted as well, building cabinetry, installing wood flooring and laying in the plumbing.

Despite all this do-it-yourselfing, and the fact the homeowner's work schedule as a pilot afforded the time, the building of the house still took "a few years," Mr. Dietrich says. But the savings, he adds, were "easily in the tens of thousands of dollars."

In another instance, also in Deerfield, a married couple took on the general contracting role together on a major remodeling of their home. "Again, the driving force was saving money," Dietrich says. "It again took a good couple of years, which is longer than normal. Both husband and wife work. That's why it takes so long. It's like having an extra full-time job."

All this said, what types of people have what it takes to make a go as general contractor on their own homes? By all accounts, it's those who possess a mind for details rather than a big picture perspective, and those with the patience to overcome the certain setbacks that will occur.

In addition, homeowner-general contractors need to be "emotionally prepared for the journey," says Ms. Mirzoian. After her nightmare experience in 1986, she earned her general contractor's license in 1992. That year, she served as general contractor when transforming a different home she'd bought into a two-story Italian villa mimicking one she'd seen in Sardinia.

Having learned from handling general contracting chores on two homes, she founded her own firm, Mirzo International, and now serves as a general contractor or construction consultant to others building or remodeling houses.

"It looks easy from the outside," she says. "But especially if you're living in the house while it's being remodeled, it's an extremely difficult process."