- Joined
- Apr 16, 2005
- Location
- Sharon, SC
I talked about self-contractors with with a few of the subs on our house. It works like this: Our GC charged cost plus. The plus was 10% markup on labor and materials. The subs I talked to said that basically, when they do something for an owner/builder/self-GC, they upcharge 20-25% over what they would charge one of the GC's they regularly work for. Part of that is kind of a volume discount, part is because an owner/builder always has screw-ups...wrong materials, stuff not delivered yet, last minute delay because they aren't quite ready for that sub yet, etc.
So....pay a GC 10% markup, or go direct to the subs and pay them 20% more.
Sort of same with materials...doing odd stuff for myself and others, I usually spend a grand to a few grand on materials in any given year. A busy GC will be in the hundreds of thousands. They get better pricing.
Now, if you are doing a substantial part of the labor yourself, that is where you actually save money. But don't fool yourself there...years ago, friends of mine built a new house....they bragged up on doing a lot of the work themselves and how much money they saved. Talking further, I find that most of the work was stuff like cleaning the jobsite each day....minimum wage labor at best that a GC usually gets a flunky to do.
I understand this line of thinking but there is another side to that coin.
As a sub and supplier who has worked for a select handful of contractors for 25 or so years...I know (BEFORE I BID) if my contractor has the job cost plus or is competitively bidding it. And my cost varies accordingly.