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Hands-on home building


After building two homes the “traditional way” with the help of a professional contractor, Dave Yount and his wife decided to take a different approach to build their family’s dream house.

Yount is one of several people in Central Iowa who have taken on the role of general contractor in the construction of their homes, and say, as a result, they have gained flexibility and saved money. But anyone who gets unnerved by minor home improvement projects might want to steer clear of this approach to homebuilding, because it can be a complex, time consuming process.

“If you’re looking at doing it yourself, it depends on if you have the time, the knowledge of the stages of home construction, and if you are willing to make the effort to get bids and follow the progress through every stage,” Yount said.

Yount, a Des Moines podiatrist, had owned his home’s lot on the northeast side of Ankeny for a few years before he built. When he took his design to custom home builders, he was blown away by some of the estimates of what it would cost to construct the 6,300-square-foot home.

“With custom homes, it can be hard to see exactly what you’re getting for your money,” Yount said. “This is the home we plan to live in for a long time, and we wanted to make sure we were happy with our investment.”

A combination of research, number-crunching and conversations with others who had broken away from the norm of using a home builder led to Yount’s decision to “take out the middleman” by overseeing his home’s construction. Because of his busy schedule and young family, he enlisted the help of a trusted construction professional as a project manager to share some of the workload.

“We wanted to make sure that we weren’t getting taken for a ride, and by doing it this way, we could see what we were getting at each stage,” he said.

Yount found three independent contractors who were willing to commit a year’s time as project manager for his home’s construction, and the person he chose, Keith Williamson, had helped build one of the family’s other homes.

“We set up an arrangement where he (Williamson) received X amount of money for completing the project, and I brought in my own subcontractors and collected most of the bids,” Yount said. “I feel that we got more out of the money and time that was involved in the process.”

A great deal of Yount’s work as general contractor came before ground was even broken on the project, including dropping off about 30 copies of his house plan at different suppliers to get estimates on everything ranging from lumber to windows. In some cases, he contacted people whom he or Williamson had worked with in the past, or he followed up on recommendations from his family and his patients.

“You have more work upfront, going out and getting bids from the subcontractors, lumberyards and so forth,” Yount said. “You’d be surprised with the variation on what different people will charge. For some things, such as lumber and flooring, there were as much as 30 percent differences in quotes. I got about three bids on different aspects, for example the concrete, and I looked in the middle. You have to be a little skeptical about a real low bid and throw out the outrageously high one.”

It took a few months of legwork to choose all the contractors, at which time, Yount drafted his budget. He said “all the ducks were in a row” by the time they broke ground on the home, and his family moved in last July – about a year after construction began.

“From what the custom home builder was going to charge to build that same plan, I figure that I saved myself around 30 percent,” Yount said. “I like the flexibility that we had throughout the process, and we’re pleased with the results.”

For others who like the idea of cutting out some of the middlemen in the construction process but don’t know where to start, there are businesses that specialize in either helping people begin, or walk them through the sequence of events.

Mark Murray, the owner of Murray Construction in Des Moines, recently started marketing himself as a resource for people interested in becoming their own general contractor. Murray, whose company has specialized in framing homes for the past 15 years, said he was ready to expand his services, and market conditions told him that now was the time to do it.

“We’ve been framing homes in the Des Moines area for various builders, but some of the larger builders like Regency are monopolizing the market, which has put a pinch on the trades,” Murray said. “I saw an opportunity to take what I’ve learned in the construction industry to help people build their homes for less.”

Murray works with homeowners to help them find a lot, and then he coordinates getting the basement dug and one of his crews carries out the framing stage. He can be involved as a consultant or active party throughout the rest of the construction process, but he recommends that homeowners maximize their cost savings by using his list of experienced subcontractors to coordinate the rest of the process on their own.

“We’re going to get you a house that’s an empty shell, but we give you a list of the same contacts that the builders would have,” Murray said. “By cutting out the real estate agent and the builder and working directly with the contractors, you’re saving around $40,000 on a $200,000 home.”

According to Murray, much of what a general contractor does involves forwarding information that originates from the homeowner, which is why he believes individuals can step into that role themselves.

“Most of those decisions they’re (the homeowner) making on their own anyway,” Murray said. “Some of the work that a builder does is passing forth a person’s information about what color carpet they want and so forth, so the person might as well cut out the middleman and have those conversations directly with the tradesmen. And a person doesn’t need a real estate agent to draw up a contract on a home plan they’ve selected and approved. People don’t realize that they have options, and when I tell people about this, they just fall over.”

Another company, President Homes Inc., has specialized in “owner-involved building” for more than 40 years. The Minnesota-based company has an office in West Des Moines, and builds about 40 to 55 homes per year locally. The company has more than 40 value-engineered home designs, as well as a team of architects to design custom homes, and it sells the homes’ lumber, plumbing and heating materials, windows and doors to the home buyer in the form of a package. When someone signs on with President Homes, the company locks in material prices for 90 days, according to Dale Kever, a sales representative.

“We buy all of our materials locally and deliver them to the building site as they’re needed,” Kever said. “We’re using economy of scale when we buy the products, and we pass that savings on to the homeowner. It would be hard for an individual to get the prices that we are able to get.”

By working with President Homes, Kever said, individuals who want to be their own general contractor also have an easier time getting financing than if they were to go to a bank on their own to ask for a construction loan.

“We know that the customer is going to have an equity stake in their home – the difference between what it costs to build the home and what it appraises for – so we put that amount on paper and can use that as the down payment for the home,” Kever said. “We have a strong track record in that we have never not finished a home or had one returned to the bank.”

On average, President Homes’ customers in its 17-state region report a $43,000 equity stake in their homes, Kever said, but in Central Iowa, the amount tends to be higher – about $60,000 to $70,000, he said. Having an equity stake in a home without having to come up with a down payment upfront is one thing that customers like about working with President, in addition to having flexibility to customize the process. The home builder can upgrade, downgrade or trade out options as desired, and also do some of the labor on their own.

“People typically do some of the work,” Kever said. “Even someone without much experience could do the painting and the insulation, which would save them about $6,000 to $8,000.”

David and Cassandra Gay are currently working with President Homes on their new home in Grimes, and the couple, which had no prior experience with home construction, have saved money by doing some of the work on their own, although Cassandra Gay admits that working on the insulation was sometimes tedious.

“We did the insulation, we helped with the plumbing, and we’ll be painting everything, doing the molding, the tile and hanging the cabinetry ourselves,” she said. “For people who come from not ever doing this before, the process is very manageable because everyone at President is extremely helpful and has been willing to go the extra mile to help us.”

Sweat equity helps bring down what the homeowner spends, but Kever said, “The people who swing the hammers are not necessarily the best candidates for the program.

“We have several people who choose to do little to no work on their home, and who choose to take more of the project management approach,” he said. “We encourage everyone to do as much as they want, and they will save some money by doing that, but if they don’t pay attention to the management of their time, money and subcontractors, the process won’t go as smoothly as it could.”

Kever said several bankers have built homes through President Homes and made a secondary income by selling them after they were finished. Joe Cahill, a mortgage lender with Preferred Home Mortgage in West Des Moines, is taking that approach now with the home he’s building in Johnston’s Green Meadows development. Cahill, who has a construction background and is a licensed general contractor, said he prefers to leave the work up to the experts.

“I own some rental properties now, and I was kind of tired of that end of it and wanted to get into building,” Cahill said. “A friend of mine introduced me to Dale, and I liked the quality of President Homes and the idea that I would have some help getting started.”

Cahill said he anticipates a significant profit on the sale of his home, which he recently put on the market. He expects it to be finished in the next month, and he says he might do the same thing again in the near future.

“I’ll probably do it with President again because Dale and Wanda (Miller, another local sales representative) have been a huge help to me,” Cahill said. “I’m going to be out of town next week, and Dale is taking a couple of appointments for me. The other thing is that they will lock in the materials cost. They buy on a scale, and I don’t think you can buy it for that. They give you flexibility, and they handle everything.”

Kever said he cautions all of his clients before building begins that “we’re building a house; expect to have some problems.” He says it’s practically unavoidable, and both Cahill and the Gays said minor things had occurred in their building processes, such as the siding taking longer than expected, but Cahill said the couple of snags he ran into were “nothing that any builder wouldn’t experience.”

Jamie Myers, president of Regency Homes, one of the largest home builders in Central Iowa, believes that his company’s experience with home building, along with how it removes the homeowner from some of the logistics of the building process, eliminate some of the likelihood of mistakes.

“All the cumulative years of experience can really veer people away from the mistakes that can be very, very expensive,” Myers said. “Our market share is a refection of long-term customer satisfaction and that our customers’ referrals definitely go a long way.”

Myers said Regency also stands behind its homes with a warranty that he says is arguably “the best warranty in America.”

“We survey our homeowners after they’ve moved in, and what we hear the most is that they appreciate the great value and home design, and that we stand by our project with our warranty, which is a two-year door-to-door warranty, five years on the major systems and 10 years on the structure. They know that there is a long-term value in their home because the company stands by their investment.”

Regency built about 800 homes in Central and Eastern Iowa in 2004, using its 6-month-old design center to help people choose their homes’ options “all under one roof,” Myers said. The company also uses Energy Star furnaces and water heaters in its homes, and has started a new homeownership class for its clients to learn more about the building process.

But Kever would say a short class can’t compare with the six-month process of being one’s own general contractor.

“When people complete it, they know a lot more about their house and what’s in it, and there’s also this feeling of accomplishment when they move in,” he said. “When they come in to build their second or third home, they know exactly what to ask and what they want to do because they’ve gone through that process.”

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