WE'RE EXPENSIVE? ACTUALLY...

WE'RE EXPENSIVE?

ACTUALLY....

This is perhaps the Number 1 misconception about a Design/Build approach, and certainly –

the Number 1 misconception about The Renovated Home:  That we are expensive.

Are we inexpensive?  No. 

Are we performing a premier, complete and cohesive offering to a renovation at the High End.  Yes. 

But expensive?  Let’s chat about this for a moment using a real world example.

Let’s use a project with a price tag of $1,000,000. 

At this level, a typical premier general contractor is going to charge:

4% for insurance,

19% for a contractor fee and

11% for general conditions (defined in the world of renovations as – the unknown and overhead). 

That’s a total percentage of 34% of the 1,000,000 budget. 

Now, the architect. 

The architect on a high end project is almost always paid as a percentage of the total amount of money that the client spends.  The more money you spend, the more the architect is compensated (starting to sense a conflict of interest inherent in that model?  Yup, us too).  The architect is also the person put in charge of the overall management of the project and for this consequential amount of design and management –

the architect is usually compensated a percentage right around 20%. 

Those two layers – the layers of the traditional model – represent 54% of the total budget for the project being SPENT ON LAYERS – NOT ON TRADESPEOPLE, NOT ON MATERIALS AND NOT ON BUILDING.  54% on layers. 

That leaves 46% of the budget to actually spend on Stone, Plumbers, Millwork, Painters, Fixtures and Fittings, Electricians and, (well you get the idea).  On a $1,000,000 project – that’s $540,000 for layers and management and 46% on ACTUAL WORK. 

 

Now The Renovated Home model.  The Design/Build Model.  The One Stop, Turn-Key approach. 

Our percentages:

4.5%

18%

1.25%

That’s it.

4.5% for General Conditions, 18% for Contracting and Building, 1.25% for Insurance. 

 A total of 23.75%. 

$260,000 of a $1,000,000 budget leaving $740,000 to actually build the project, buy the millwork, pay the plumbers, and pay the painters.  That’s a 28% difference, a $280,000 total to either spend on the project or, even more revolutionary…..Keep it in your bank!

 

Finally, the change orders! 

 A typical percentage for change orders using the traditional model is 20%.  Sometimes double that – but 20% is a good gauge of what is being charged to clients AFTER the contract amount. 

The Renovated Home?  $0

 

 

That translates into a spread for value engineering and allocation of money to actually build of 48%!  48% more using the traditional model that our One Stop. Turn-Key approach.

 

So are we expensive?  You tell us because the numbers don’t lie

It’s just math.