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Old 05-17-2010, 06:34 PM   #1
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Contractor consultant charge ?


What is a reasonable price to ask as an general contractor consultant

Hello I am a controller for a construction company for 18 yrs and part time photographer. When my husband and I decide to purchase our home, we took the plunge and became our own general contractors and sub'd out the entire project. Well, we made it through the building, have a beautiful home, and are proud of our work. In so much that my own company said they could not have done any better. Now I have a neighbor getting ready to build and he is considering becoming his own contractor as well. I helped him get started, but he is truely not ready to be his own contractor, so the million dollar question came up, what would I charge to be a consultant on his home building? Lost, as I do not know what the rates would be. Hope someone has some advice!!

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Old 05-17-2010, 07:04 PM   #2
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what would I charge to be a consultant on his home building?
How much did you guys save by being your own
GCs? How much time did you put into it?

There is also the Expected Value of Perfect Information [EVPI], kind of a messy calculation. See Wiki.

If you do this, you need a contract to limit your liability.

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Old 05-17-2010, 07:08 PM   #3
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Contractor consultant charge ?


Moved to off topic as not a DIY question

Where are you located ?
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Old 05-17-2010, 07:17 PM   #4
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Contractor consultant charge ?


I really hope you plan on getting insurance.

Also, in most states, to do what your neighbor wants you to do, you need some sort of license or registration. It's ok to GC your own home, but the rules change when you do it for someone else.

I'm not saying you can't GC it, but there's a wrong way and there's a right way. The right way involves contracts, insurance and contractor registration.
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Old 05-17-2010, 07:22 PM   #5
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The homeowner is becoming his own general contractor. I have already informed him that he will need to have insurance from all subs he hires. I will not be the genreal contractor, but merely advise him on the proect planning areas, ei: who's next, have matereials delivered, schedule next sub as soon as current work is completed, making sure he knows when to order inspections. Consultanting only on this project.

Saved around $85,000 and we built in 7 mths. I agree on a contract to limit my liability to consulting only with no hiring involved. He will be his own genreal contractor and do all his own hiring, making sure they have insurance.


I am not sure what this means. Sorry of I have done this wrong.
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Old 05-17-2010, 07:28 PM   #6
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Located in Eastover NC
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Old 05-17-2010, 07:50 PM   #7
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Limitation of liability contracts are available on the web, but good luck. I don't think you're seeing the risk involved, and it's a poor decision to go into this without insurance. I hope it goes well.

If you're a consultant, you get paid by the hour, like a shrink or a lawyer. GC's get the percentage of the job, because they're the ones with their name on the permits and taking the risk on it and driving the job to completion, and their insurance policies are underwritten and priced based on contract value.
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Old 05-17-2010, 08:09 PM   #8
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Contractor consultant charge ?


^^^^perfect advice. What do you think he will do when you give him poor advice because your record of experience is limited to your own home? I think he may expect you to pay the bill if he's paying for your advisement. And if you don't, he may just take it to court. Not a good position to be in, especially if a court or jury agrees with him. At least have the proper insurance coverage and be sure to explain to your agent exactly what the scope of this business venture will be. You don't want to lose that $85K savings. Especially if you are doing things the right way and invested that money into the company.
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Old 05-17-2010, 09:57 PM   #9
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Limitation of liability contracts are available on the web, but good luck. I don't think you're seeing the risk involved, and it's a poor decision to go into this without insurance. I hope it goes well.

If you're a consultant, you get paid by the hour, like a shrink or a lawyer. GC's get the percentage of the job, because they're the ones with their name on the permits and taking the risk on it and driving the job to completion, and their insurance policies are underwritten and priced based on contract value.
Thank you for good advice. I will contact the insurance agent that writes the insurance for the construction company I work for to provide me insurance coverage as well as check out the limitations of liability contracts as suggested. If I can not obtain these, I will decline to consult as I do see the probablilty of being held responsible if homeowner feels the advice detrimental to his progress.
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Old 05-17-2010, 10:02 PM   #10
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I agree as well. But my experience is not limited to my own home. I have worked with a construction company building homes for 18 years, working with subcontractors, budgeting, job costing, insurance for both the company as a general contractor and the subs we hire. I will be following advice given in regards to insurance and liability contract, if I agree to accept this project outside of the company that I work for.
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Old 05-17-2010, 11:08 PM   #11
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Well then, you should be the one giving out the advice!! LOL, no I know sometimes we all need a reminder. Especially when it's something we just take for granted or become complacent to. Or in your case, something that was normally handled by a separate department (I assume).
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Old 05-18-2010, 07:03 PM   #12
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Contractor consultant charge ?


Cici,
Just thinking ahead. I used to build custom homes during the nineties and early 2000's. Here's what I see maybe being a problem:
Your friend acts as his own GC. He has control over hiring, firing, talking with the subs over the scope of their jobs. You are going to be advising him third hand. Depending on the communication, how well he does or doesn't understand what you are saying, some things will get lost in the cracks. Something goes wrong, it becomes a he said she said type of thing with you hearing it all after the fact. I always liked being in control of the job first hand. First time homeowner builders have a tendency to go for the cheap bid and don't necessarily understand what the scope of each trade is. Trades sense this and tend to pass off parts of their job on the next guy if they think the H/O doesn't know any better. Just my .02. Be careful, get things in writing and in detail on what you are expected to do. Limit your phone call hours to times you can deal with. (No calls in the middle of the night, etc.) For insurance, you may want to check into Errors & Omissions Insurance. Talk to your agent. Good luck,
Mike Hawkins
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Old 05-18-2010, 08:50 PM   #13
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Contractor consultant charge ?


I think if you are going to do it, it should be as a construction manager not an advisor. If you are going to be in a position of responsibility than you should be getting paid for it and have control over that responsibility. I wouldn't want to take liability for a weekend warriors "fake it till ya make it" general contracting cocpany. You didn't succeed in your efforts because anybody can do it, you succeeded because have related experience.

Also, if their motivation is to save money (which is what it sounds like) you shouldn't do it on a percentage. I could see them trying to use that against you or to back out of a contract by saying that you made your decisions to use more expensive material was to make more on the percentage, when you made a decision to use a product that would be more reliable, easier to maintain, or any other reason something may be a better or higher quality choice. I think if you charge her, and take control as a manager, you should charge a flat rate. That way she can't say that job delays were planned or that you were using the expensive materials to make more money. Do it for a flat rate, and don't forget that since you'd be managing for a fixed rate, any changes should include a management fee.

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