Tips for New Residential Construction

The process to entitle lots can take more than five years and is expensive. The cost of parcel maps for five lots or less is $100,000. Tract maps for more than five lots can cost more than $500,000. The number of lots and the potential size are determined by biology, health-department regulations, slope, and the zoning and general plan. Included in the cost are engineering, processing, and regulatory fees and various reports and studies.

Reports and studies include conditions of approval costs, storm-water treatment, anthropology and archeology, soils, biology, noise, and traffic. When a map is approved and recorded, there are additional fees that include, but are not limited to the following:

• Potential greenhouse gas studies

• Retention and drainage basins

• On- and off-site mitigation land

• School fees

• Parks and recreation fees

• Physical secondary access

• Fire fees

• Annual bonding fees.

Politics comes into play when obtaining the required approvals from county boards, city councils, and planning commissions. The level of public opposition or support affects hearings completion. They can be completed in as little as four months, or take years and cost over a million dollars. Property owners have three courses of action to take into consideration.

1. Entitlement and sale of the property ‘as is’ – This option brings the lowest price, but costs the least and requires the shortest time for property disposal. Under rare circumstances, the land is worth more when it is unentitled.

2. Enter into a long-term agreement – The agreement is made with a home builder who incurs the expenses of processing a tract map. This option is the most utilized. The process could take up to five years. The buyer is required to release nonrefundable deposits periodically to the seller after approving their contingencies. Escrow closing typically occurs after tentative or final map approval.

3. The owner incurs the entitlement costs – Much of the process is like option two. The difference is the owner has full control of the mapping process and bears all expenses.

The ramifications of each choice should be weighed carefully before making a decision. Owners, who have chosen not to seek advice, have made the decision to process a map and found out later the number of lots was not financially feasible. A competent engineer can determine the optimal number of lots that can be obtained and approved. Smart growth design principals call for buildings with a variety of materials, texture, and color and individuality; well-defined open space; a building and street relationship; mixed uses; and high-density development. Contractors, who specialize in residential subdivisions, can give realistic cost estimations.

The process of entitling residential property to higher densities is costly, complex, and cumbersome. Many factors must be taken into consideration. The leading concerns that communities have about increased density are the quality of life and increased costs.

There is a need for new affordable housing to reduce recent overpayment and overcrowding. There is also a need for high-density housing that supports economic recovery, accommodates new workers and their loved ones, and economizes the costs of infrastructure. It is quite a balancing act. Open spaces need to be conserved and the distance between new jobs and new homes reduced.

Commercial Construction Tips – Is the Project Feasible?

Getting a construction project off the ground can be very tricky, as there is a lot that needs to be considered before you even lay the first brick. Making sure that the project is actually feasible in the first place is extremely important, and it should be the first thing that you do when you decide to start work.

So just how can you determine whether the project is actually feasible? Here are just a few tips to get you started.

Speak to an Accountant

Budget is always going to be one of the most important aspects of any construction project, as running out of money at a critical juncture could prove to be a fatal blow for what you have in mind.

When you have an idea of what you want to build and you have some plans drawn up you should talk to a qualified accountant who can help you set out a budget and determine what needs to be spent and where. It is at this point that you will be able to determine if the work is financially viable and if you can deliver it within your budget.

Speak to a Solicitor

There are numerous legalities that are involved in practically any type of building work, so it is important to make sure that you have all of them squared away before you begin working on the project.

Speak to a solicitor who specialises in property development and find out what permissions you need to get and which red tape you need to cut to get the project off the ground. Failure to do so could lead to you doing something illegal, which is grounds for having the entire project shut down.

Speak to an Architect

While you may be able to create your original plans without too much hassle, to really know what is going to have to be put into the project you are going to have to speak to an architect and get their expert opinion.

They will be able to tell you if what you have in mind is even physically possible and will also be able to suggest changes to the original plans to account for any issues that they see.

This is a massively important step, as you need somebody who is qualified in the field to not only sign off on the project and ensure it is feasible, but also to help you in the overall design.

Speak to Your Crew

The final step in determining if your project is feasible is talking to your building crew. You need to know that everybody that you have working for you is able to do the jobs that you need them to do.

If they can’t, you will need to have enough money in the budget to hire somebody who can. Having the right crew is tantamount to the project’s success, so skipping this step or simply assuming that everything you have planned is a risky move at best and tantamount to construction suicide at worst.

Your Simplified Guide for Comparing Commercial Construction Companies

Commercial projects involve huge budgets and big plans, and quite expectedly, you need a reliable commercial contractor for the job. Construction companies working in the commercial sector have a specific way of doing work. In this post, we will talk about that, along with tips for comparing the options.

Working with Commercial Contractors:

As mentioned above, commercial projects require considerable money and effort. As such, it is important to start with the right steps. The first obvious step in finding a contractor is to make the design and establish deadlines. The whole process of planning can take time, but with a good contractor at work, you can expect to achieve the goals as planned and intended. The concerned contractor will seek your approval for the entire design, then they will get the necessary permits to start the construction. In between, the funds and finances will be discussed, and the contractor is expected to offer genuine assistance with the immediate roadblocks that may seem evident for the project.

Investigating the Options:

Construction companies specializing commercial projects have certain traits that you should be looking for. Here are the things you need to check.

1. Is the company well-known? For big projects, you cannot afford to take the risk, and hence, it is always better to find a contractor that you can rely on. Ask around for references, its best way of moving forward.

2. Know their client. If a commercial contractor claims to be the best in business, they must have the clients to back it up. Don’t shy away from seeking references and take a look at some of the projects they have managed so far. You may want to call some of their clients to know the individual experiences.

3. Find out more about their expertise. The whole process of planning and completing commercial projects is an extensive one, and not all contractors deal with all kinds of things that are involved in the process. Check if the concerned company has the expertise and know-how that you need for the project.

4. Ask for an estimate. Based on the work, you would want to know the cost of hiring a contractor. Again, this is largely dependent on the contract and the things included, but for such projects, transparency is one of the many things you cannot afford to ignore.

5. Check the basics. Work with companies that have an in-house team of experts. You need to find a contractor that’s genuine in its approach and can offer something more than standard services. Check if the company has licenses and permissions to take up such jobs and whether they can do the paperwork and get the required documents to get the job done.

Last, do consider sustainable and green practices for your project. An advanced and renowned contractor will offer such choices for their clients, based on what they need. The initial consultation is one of the main aspects that matter in this regard because you can learn a lot about the possible solutions available.

Commercial Construction Tips – How to Come in Under Budget

If you are relatively new to the commercial construction business you might still have some things to learn. One of those things ought to be how to stay within your budget. If you do not have a plan for doing this it could become a constant and unnecessary battle for you. The key here is – having a plan in the first place. We are going to give you some ideas on what costs must be accounted for in your plan in order to determine what your individual project budget will be. Then you can proceed to plan how to meet that budget.

Unfortunately there are many common errors that occur when a commercial construction estimates their budget. The result is that quite often they do go over that budget. If you have a general concept of what those errors are you will know what to watch out for. Therefore, we will give you a list of what they are. In no particular order those factors are: price changes, omissions, unclear plans and specs, wrong assumptions, design changes, inadequate allowances, construction or design errors, cost-plus bids, hidden or concealed conditions, and design changes. This is some list! And this is only the list of known errors in budget estimations. It does not take into account all of the new issues that might crop up over time. But now you get a rough idea of all of the things that can go wrong. You and your leadership team may be able to come up with more possibilities right off the tops of your heads. Write them all down in your plan, and then proceed to discuss all of them in-depth.

Some things you will accomplish by dramatically reducing your budgetary errors are: to forge better relationships with your subcontractors, decrease the amount of time it takes your company to complete projects, and generally stay ahead of the ballgame. In addition to our list, we have some general tips for overall budgetary success. Our first tip is do not always accept the lowest bid. While you do want to keep your costs low, you also want to ensure you receive quality work. You will not necessarily get that from the sub-contractor that gives you the lowest bid. Do some investigating of your prospect before you go into business with them.

Our next suggestion is to always allow for any preventative measures; both from a safety standpoint involving any person who works on the project, and for things that could go wrong with that project. A lot of unplanned expense money on a project is paid out for medical care that is needed when people get injured on the job. Those injuries can be avoided if all safety guidelines and procedures are strictly adhered to. Additionally; when commercial construction companies fail to properly plan for anything that could go wrong on a project, that means more money will have to be shelled out to fix those things. This can be avoided if you allow for those kinds of expenses in your project budget to begin with. Remember the old Boy Scouts’ motto about always being prepared!!

Commercial Construction Tips – Facts About Construction Projects

Commercial construction is often an arbiter of changing economic conditions. Construction projects mean both an improving economy and a way to improve the economy of a given area. Read on to learn more interesting facts about it.

This type of construction helps public sector agencies as well as private firms. Big new schools in areas where people are moving give students a chance to learn in state of the art facilities. New office buildings bring jobs to the area, and the upward spiral continues. Not only do the buildings benefit the users, but the building process itself gives workers a solid job for several months, and the expenditures from the construction project go directly into the local economy.

The United States is second in the world in terms of this construction, regardless of where the company doing the building is headquartered. As much as 10% of all commercial construction takes place in the US, and New York is the city with the most commercial construction going on – $8.5 billion (that’s billion with a B) in 2013. A lot of the construction was for residential buildings. Following New York were Houston and Dallas. Those two cities spent $10 billion in 2013 on commercial projects.

One of the biggest trends in commercial construction is green building. Experts from the Environmental Protection Agency expect that by 2017 as much as 48% of new building will be done with green building materials. To put that in financial terms, it could mean as much as $145 billion dollars.

By 2018, 84% of residential construction companies plan to have at least some of their construction projects classified as green. To get an idea of just what kind of impact this has on the overall economy, consider that residential projects total as much as 5% of the current gross domestic product of the US. As more and more firms add green building to their plans, it might mean that as much as 18% of GDP will be based around green construction.

Big commercial office buildings are going green, too. LEED certification is becoming the main standard, and builders are up to 41% green as of 2012. Just how rapidly is this growing? Consider that only 2% of commercial construction, non-residential, projects were green in 2005. It’s no surprise that states like Hawaii and California are leading the way in LEED projects.

It’s not just the US that is interested in green construction, though. LEED certifications around the world are becoming more common. A study released earlier this year showed that as many as 69,000 LEED projects are going on globally in 150 different countries.

This construction is as important to the global economy as it has ever been, and the increases in such projects over the last few years signal a positive change after the worldwide recession of 2008-09 and the soft recovery that followed. With even more green projects being planned than ever before, commercial construction projects will also be kinder to the planet, meaning everyone will benefit for years to come.

Commercial Construction Tips – How to Know If Your Contractor Is Doing a Good Job

Big construction project or little one. An historic renovation in the heart of old downtown or a new retail center. No matter what kind of construction project you are undertaking, you want to feel assured that you have chosen the right contractor for the job. But how do you know that your contractor is doing a good job?

The success or failure of a contractor is often closely linked with you – how effectively you complete your hiring due diligence, how clearly you state your expectations, and how well you and your contractor communicate with each other during all construction phases.

Preparation and Selection

Before you begin your search for a contractor, you should clearly outline the responsibilities for which you will hold your contractor accountable. Those accountabilities should be included in the contract between you/your company and the contractor.

Next, you need to do your due diligence.

• Ask friends and colleagues who have worked with construction projects similar to yours for contractor recommendations. Ask these questions:

o How did the contractor handle the budget and materials?

o Was the project done on or ahead of time? If it was off schedule, why?

o Was the work done according to agreed-upon terms?

o Would your source work with that contractor again?

If their referral did well on each of those points, he or she may be a good contractor on your project as well

• Check ALL references!

Get it in writing

All good business relationships should begin with, “get it in writing!”

• Each contractor candidate should provide a written bid. Red flag: nothing in writing.

• You and your contractor should have a signed contract. Include details on the budget, scope of work, materials, the schedule, and the contractor’s specific responsibilities. Red flag: the contractor who won’t sign a contract.

• Your contractor should take notes during each walkthrough and meeting. Red flag: “I’ll remember… “

On the job

These are some important on-the-job clues that your contractor is doing a good job:

• Communication: you and your contractor communicate frequently and clearly according to your agreed-upon methods (text, fax, email, phone). Red flags: doesn’t return calls, is difficult to reach, provides limited responses to questions, communicates poorly with work crew.

• Subcontractors: contractor hires quality subcontractors with verifiable references. Red flags: conflicts on the job, petty thefts, on-the-job substance abuse, wasted time, etc.

• Safety: contractor diligently observes safety practices and insists that all workers comply with safety rules. Red flags: avoidable injuries, safety issues.

• On the job site: contractor is working at the job site for the majority of the time. The construction crew is busy during all working hours of the week. Red flags: contractor is infrequently on site, workers have too much idle time.

• Security: appropriate security measures are observed at all times. Red flags: equipment and materials not secured or missing, the site is poorly secured during non-working hours, unauthorized people are on site.

Schedule and budget

Ideally, every construction project is completed on budget and on schedule. Realistically, there may be some schedule interruptions and unexpected costs.

Ask yourself some final questions:

• Is my contractor providing me with accurate, up-to-date information on all aspects of the job and construction progress?

• Is he/she managing resources, budget, crew, and materials effectively and appropriately?

• Are crew members working fairly harmoniously with each other?

• Are my objectives for this project being met?

When you can answer yes to these questions, it is most likely that your contractor is, indeed, doing an excellent job for you. Congratulations on your choice, and your new project!

Commercial Construction Tips – How to Avoid Going Over Budget

A commercial construction project can seem like a never-ending balancing act, like keeping a series of plates spinning. One plate represents keeping the project on schedule. Another spinning plate is ensuring that construction is completed properly and safely. And still another spinning plate is containing the project budget.

A commercial construction budget is influenced by a number of factors. Exceeding the budget can easily occur for reasons beyond the control of the owner, contractor, and project manager, including:

• A sharp increase in materials costs during construction.

• Weather fluctuations that slow or halt construction.

• Work stoppages.

• Frequent alterations to the design, materials.

Make a list

As one industry writer stated, estimating a project’s cost is the first step of construction cost containment. The project budget should list the essentials (non-negotiables) as well as the negotiables (the aspects of the project that can be reduced, modified, or eliminated in order to contain costs. Each line item should be carefully researched, sourced, and have a realistic cost applied to it. The budget should also include contingency funding.

Cost control challenges

Cost containment challenges are not always line item-related. There are a number of less-obvious but significant challenges to staying on budget, including:

• Poorly defined scope of project.

• Flawed estimating methodology

• Lack of project management policies and controls.

• Unrealistic scheduling.

• Insufficient planned-to-actual cost comparisons.

The big three

This trio of cost containment issues has been stated before and they are worth stating again. If The Big Three of budget issues are carefully managed, you can reduce or eliminate a number of budget overruns:

1. Incomplete design documentation: the architect’s rendering, plans, and specs that are turned over to the owner or project manager do not always include the in-depth details necessary for realistic budgeting.

a. Solution: the contract between the owner and architect should specify that all members of the architecture team will provide complete details, specs, documents, and drawings related to the project.

2. Pre-bidding document review: some contractors do only a general review of documentation before submitting their bids.

a. Solution: the language of the project owner’s contract should require all contractors who submit bids to acknowledge, in writing, that they have reviewed all specifications and plans. The bid price should cover all identified and “implied or express design intent” work.

Any materials or changes to design that the contractor feels are essential to successful completion of the project (but weren’t identified in the project/owner’s documentation) also should be included in the bid, along with explanations for the additional items.

This requirement should reduce or eliminate the need for contractors to seek additional compensation based on additional work necessitated by information “not shown on the original plans and specifications.”

3. The low-ball bid: underbidding can put the entire project at risk and cause it to far exceed the budget.

a. Solution: solicit bids only from trusted contractors who have successfully completed similar projects. They should have documentable records of completing projects on budget and on time.

Another cost containment option

Another cost containment option is to hire a skilled construction cost estimator. That person or team works with you to help you avoid out-of-control expenses, keep construction costs down, and ensure the project is completed within the agreed-upon timeframe.

It’s up to you

Ultimately, it is the owner and project team who are responsible for overseeing each phase, change order, and plan alteration to the construction project. There should be a well-defined process for change order submittal, review, and authorization. There also should be continual monitoring and updating of the budget so that you and your team know where the project financially stands all the way to completion.

Commercial Construction Tips – How to Stay On Budget

Keeping a commercial construction project on budget requires determination, vigilance, creativity in problem-solving, and diplomacy. It begins almost at the moment a project is conceived and continues throughout the entire construction period.

There are many reasons a commercial construction project will go over budget. Some causes simply can't be adequately assessed or budgeted, such as delays and materials losses caused by a natural disaster. But many causes relate to poor planning and even weaknesses in the budgeting process itself.

Typical Cost Control Problems

Cost overruns on a construction project happen, despite the most careful planning and control efforts. Some common causes for overruns include:

  • Lack of a well-defined project scope.
  • Poor estimating methods (or standards).
  • Out of sequence start / completion activities.
  • Inadequate comparison of planned-to-actual costs.
  • Unanticipated technical problems.
  • Poor (or no) project management policy and control practices.
  • Faulty schedule resulting in overtime or idle time expenses.
  • Escalating materials prices.

Three Big Mistakes

Review some of the more egregious construction cost overruns of recent years and you might see a familiar pattern to budget overruns. They are commonly made mistakes that can be adjusted and corrected during the contracting phase of a project.

Managing these three weak areas may mitigate or eliminate many of the problems listed above:

  • Incomplete document design: a project owner may hand over the architect's plans and specs to the contractor believing that every detail has been identified. In truth, the owner-architect agreement often only requires the architect to present the plans and specs of a general design intent. The complete in-depth details may not be included. The lack of complete design information places the contractor in the position of demanding more money for work that had not been clearly defined in the plans and specs. Multiple change orders and budget overruns result.
    • Resolution: the owner-architect agreement should specify that the architect will provide a 100% complete set of drawings, specs, and all related documents prepared by engineers (and others working on the project). Responsibility for overages caused by incomplete design falls back on the architect, not the contractor.
  • Complete review of documents prior to bidding: the contractor may seek additional compensation for necessary work that, according to the contractor, was "not shown on the plans and specifications."
    • Resolution: the project owner's contract language should stipulate that all contractors wishing to submit bids must affirm they have reviewed the plans and specs and fully understand the scope and intent of the project. Their price should cover all necessary work to fulfill the "implied or express design intent."
  • The lowest bid: the project owner may face many pressures from investors, shareholders, and board members to accept the lowest bid. But lowest isn't always the best. Underbidding can be risky and costly.
    • Resolution : work with trusted contractors who have completed projects similar to the current one. The contractor with a track record of successful on-time and in-budget builds is far more likely to be able to produce the same results for your project.

The root of successful budget containment lies in allowing a sufficient amount of planning time to thoroughly define the scope, schedule, quality, risk, resources, and budget for the construction project before the bid invitations are sent out to contractors.

10 Great Commercial Construction Tips

Commercial construction can be a big undertaking, both literally and figuratively. You might think you have it all under control, but do you really? Here are ten tips that will help make your next commercial construction project a success.

1. The lowest bid is not always your best choice. It’s a counter-intuitive thought compared to everything we have been taught. But even in these times of wanting to be sure to keep the bottom line in check, it’s important to find the best price for the project. Sometimes the low bid is that way because the contractor has no idea what the job entails, and other times they will come in low, get a payment or two, and then abandon the job.

2. Go online and do your research. Check references, run the contractor’s board numbers, and study the backgrounds of your contractors so you can know before you sign on the dotted line just what you are getting. The internet can also be a source of information about current trends in commercial construction.

3. Find a contractor who specializes in what you want done. Sometimes the biggest isn’t always the best. A smaller contractor who is more adept at smaller jobs might be just the right thing your job needs. If you are revamping a store, consider finding contractors who specialize in retail space renovations.

4. Start with the general contractor and build from there. By bringing the general contractor into the job first, you are able to use their knowledge on the job from the beginning and have them help guide the project.

5. Go ahead and add on that maintenance agreement. Once the job is done, you want to ensure that your project will last for years to come. A good maintenance contract that checks over the equipment is a great idea to clean and maintain things like your furnace or drain pipes. A quick cleaning now is much cheaper than an expensive repair later.

6. Does the goal of the project further your company’s image and brand? If it doesn’t, it might not be the right project for you. This is a big capital expense, and you want it to pay off with a solid return on investment for you.

7. Your project should make sense. Do you have custodial closet doors that open inwardly? Did the customer service booth end up with only a small front-facing window? Double check the design proposal before you go out to bid to ensure that the concept diagrams and blueprints make sense and lead to positive workflow.

8. Along with number 7 goes ensuring that the areas like the office supplies and the copier are easy to get to and are going to keep things efficient in the office or administrative area.

9. Decorate in such a way that the colors and furniture enhance your brand and your company’s image. Your customers should feel like they are welcome in your new place, so be sure your contractor includes an interior decorator in the plans.

10. Be sure your contractors are all on board with the project and are capable of meeting the deadlines. This point is probably the most important one of all. Any delays are costly both financially and in terms of getting your business going again in the new location.

Hopefully these tips will help get you going in the right direction for your next project. Happy building!