Another unforgettable and bloody experience of owner builder

Another unforgettable and bloody experience of owner builder

Home builder by law it is home owner who have knowledge on building homes, and have ability to build, and he will do the work himself. But the silly California law have another explanation to issue building permit by as long as owner declare he or she will hire license contractor to do the work.

The reason to have this clause because government authority want to make sure either owner do the work himself with worker’s compensation insurance exemption, or owner get some license contractor to cover worker’s compensation insurance

Some owner builder some time like us, we are professional builder and contractor. We can do everything ourselves, and we have all the tool and equipment. During business slow time, we do most of our work really by ourselves. Even when we are very busy we have a few project together, then we start hiring sub contractor. Even this case, most our subcontractor are sole preparatory which means the owner of those subcontractor work himself without and employee. So they are exempt from worker’s compensation insurance. But in resent years. Many owners try to cut corner by save all contractor’s overhead, which include worker’s compensation insurance, employee payroll tax, cooperation company income tax …. By pull out owner permit, the go to Homedepo, hire some temporary labor with or without working permit in United State. Pay every one in cash and try to pretend all work being done by them. Actually not doing themselves.

In California bay area a lot of realtor, high tech engineer, some new immigration. With deep pocket from other country. They enjoy the risk taking and bigger money profit.

Couple of month ago, in Fremont California. One Mexican worker was killed by land slide during unlawful construction work.

Owner hired bought a land up on the hill, try to build a big custom house. They hired a realtor who some owner built house in this area this few years to be a construction management. And this realtor construction manager hired another superintendent who has not enough knowledge to manage construction to do the job site watching for him.

Build home up on the hill site is not an easy and same job as home alternation or home addition in flat lot.

As a professional builder, we will pay extra money on top of our regular construction general liability insurance and also pay higher premium on worker’s compensation if any worker working under deep dirt cut below 3 feet. And on the other hand we will spent a lot extra money on doing preset safety shoring and site safety training and watch for the crew.

As of all construction insurance requirements, the whole system tie on the payroll and California occupational safety association requirement to get benefit paid if any unexpected thing happens.

Unfortunately this owner has nothing to prevent this sad thing happen. The cut about nine feet high dirt on the hill without any shoring, and start build foundation under the dirt cut. And they have no any safety program to watch it Suring construction, the worker come form temporary labor who looking for job in front of Homedepo. The superintendent and construction manage all cutting corner habit guy.

God give them a chance because there is one city inspector drive through their project during other inspection duty time, and see this job site just nothing look professional, so the inspector went back this construction site and drop stop work notice to that superintendent. Guess what? The guy didn’t notice owner and his realtor boss. And rush up his crew work Saturday and Sunday since city office closed during the weekend.

What a sad drama happened. Even this winter hardly had some rain in bay area; it is rain in that weekend, the big chunk of dirt slide down from hill buried on worker. They have no heavy equipment on the site, and the superintendent have no sense to deal this kind of emergency, by the time they dig the worker’s head out of the dirt, he already pass out. A Young life, during the economic down turn, just tries to work hard and get some money for him and his family lost his life. He just a worker, a hard working worker willing to work in the weekend. And deep pocket owner try to use him to make more money for themselves and the none professional realtor construction manager try to get some side job money out side being a realtor during housing recession.

Now what? During this happen, the realtor construction manager out of country in his home town country, and won’t come back. Even he come back he is just a manager as owner employee. Unless he have construction contract with owner as a licensed contractor, and he did provide all insurance to the owner before the project start. Other wise the owner will have to cover him for all the liability as well.

And now this owner will face the entire multiple

Lawsuit on braking up labor law, safety law, tax law and criminal law…..and this owner financially have unlimited liability form his entire asset. And no matter what, the young life can not be back

home remoldel tip

Watch out unlicensed contractor during economic down turn

Last month I had a friend who is remodeling a 50 year’s old house he just bought. Since it is a very old house, a lot of stuff need fix. Plus existing floor plan need a lot alternation to fit modern living. So the project became a fare good size project.

Since most of wall open to redo new electrical, new plumbing, new central heating, new framing for alternated wall. Then house have a lot area re do drywall, new interior door, door casing, baseboard. After all new stuff in, this old house looks like new house. So just like every one having new house, owner wish also put luxury crown molding in as well.

But after all this new wood work in, the next thing happen is painting. For the best result of wood work paint. Spray paint is definitely an answer. It is a 1600 sf, 4 bed 2 bath room house with more then 20 new smooth surface interior doors.

A professional crew did estimate $5500, and owner get a crew estimate $2000, when the owner consult with me if he should ask the cheaper crew to do it, I just feel some thing not right. We are professional we see the job we know how much profit how much cost roughly will be. For this work if a good work will be delivered. Kelly more paint material already cost 1000. for the labor do proper taping covering in between spray, it might take 4 guy 4 day minimum work to do. For clean up and touch up detail. That need another day work for 4 guy, if labor cost average $150 per day, it already cost $3000. tax and insurance, worker’s come… overhead for crew, may be another $500-$700. so I think the professional crew give very good price for this job. But how come other crew can do $2000? I really don’t understand. But by the end owner deceived use cheaper crew try to save little money.

Since I need monitor the job for owner, I do went to the job when the first day this cheap painting crew start work. I expecting they will come patch the nail hole on wood work and caulking all the intersection between wood work and wall ceiling. I was surprised they start rolling paint on the wall first. It is wrong step to do the job.

So I ask the crew, how you are going to do the wood work? The answer is we will roll and brush it. By the way they have 4 guys work too. I called owner right way to suggest fire this crew. Then I heard the crew worker talking complain their boss pay them not enough, even one of the worker ask me if I can find other job for him. He said he have to work 12 hour a day and only get paid $80 per day. Which minimum pay rate with now over time pay. And definitely they pay cash without pay any payroll tax and worker’s compensation cost. I am sure this crew have no license at all. I did calculation for them. They work 12 hour, per day. So labor cause $1200 for 4 guy work 4 day and they must ask owner pay for material because they don’t have account on Kelly More paint store because they don’t have license. So this crew owner will make $800 cash for himself.

I am glad I caught them in the first day just from watch them work, it is none experienced unlicensed crew, and they might hired illegal worker as well. And if the first brush work on the wood work, the whole job will be ruined. And nice paint work on the nice finish wood work is the main sparkling part of all the work all about. On the other hand. Owner have the biggest risk on all labor law. Any one get injury on the job. They can sue owner and get owner property on the lien for the compensation to injury worker, also owner have liability to pay all worker’s payroll tax and have liability for hiring illegal worker.

In conclusion I would like advise all owner doing your own project without any professional help. Compare price. It tell your some thing. Like this project. If the second crew have $500 even $1000 different, I might considered. But for this big different I can tell either he try to get job first and charge some extra from any small change later, or he really don’t know how to do this. Have some one give professional suggestion always good thing to do.

Good luck for every one wish to live in your dream home.

owner builder should beware of

There some important things owner builders should be ware of



In this economic down turn, bank have now construction loan at all. And bank also have very restrict for equality loan. Home owner try to save money and take risk to be an owner builder instead hiring quality general contractor.


A lot of people made money by doing this before economic crash. When housing market booming they turn around sold it as is right after build.


First, owner builder is legal only if owner build it self or owner hire licensed sub contractor, most people not doing this at all. They do everything by other people, a small group of people used to work for other company, and now they got laid off. They travel around city looking for construction site ask for job.


Owner have obligation for the following liability.


1. Owner has liability for IRS about all the people’s payroll tax.
2. owner have liability for Workers compensation insurance
3. Owner has liability for all payee income tax if they miss report tax. Because every individual which have no contractor license maximum can get paid without w-9 report no more than $750 per year.
4. owner also liable for all the penalty for delay report


even some time owner hired some sub contractor, they have worker’s compensation insurance, but actually sub contractor owner just have certificate for owner exemption, he report have no employee, or just report one or two employee to get certificate. Then they hire more workers without put them in the payroll. Which means insurance not cover if any of them not in the payroll? Which means it will hold owner liability as well if worker open law suit for injury. Which means it is possible owner’s property might put on security on the law suit lien, and which means if bank find out the situation bank might ask you pay off all the loan right way. Especially owner borrowed equality loan but tear down the whole house without get bank agreement to do so.


Second: owner builder build home legally can not sale without live in the house at least one year after build. And also owner builder have same liability for the construction since owner act as a general contractor. Most general contractor has liability insurance. But most owner never pay attention check with their insurance carrier if the policy cover construction work or how the cover it.


Third: owner builder have not enough knowledge about poseur how to build and how to schedule each trade. It is because a lot miss functional scheduling. So the job runs a lot worse and complicated. Sub contractor get mad by wasting more time to go in back and force in the wrong time, and end up either argument arise, or sub hire temporary cheap labor from homedepo and not pay them as the discussed after work, the quality turn bad and even some time labor come back steel stuff because not get paid right.
So be careful when you have no choice to do so.

some example of construction design

Some problems on design part of work easy to cause problems on construction.

As I said before. Make a good plan before construction start is important, but construction not a “one plus one equal two job”. Architect even good one, some time still can not figure out every details or can not figure it out right on the drawing. Bad architect or designers really make it worse.


A week and half ago, one of framing contractor come over to consult me about drawing. Because he don’t know how to order material.


Once I saw the plan. This architect have different information on structural plan, on floor framing plan, he have floor joist layout on 24 inches on center, with 4x6 girder support. But on structural details shows, floor joist at 16 inches on center, with 4x8 girder support. It is obviously this architect doesn’t have enough experience on construction. In San Francisco Bay area most of the floor use 16” on center layout on floor joist. But most of roof rufter lay out is 24” on center. Also architect note, floor plywood use 5/8” thickness plywood without tone and grove but ask nail blocking on the plywood connection. This shows exactly this un experienced architect put roof detail requirement on the floor.


This kind of architect either just start work in architect office or he start his own business too early, as owner of course use him because his charge is cheap. He just copy some detail from office file on the drawing without really understand why.


Another problem on earthquake sheer wall. He maked sheer resistant holdown on the less sheer value wall, and miss maked sheer resistant holdown on the high sheer value wall. I am glad this framing sub contractor is a good one, he realize this plan have some unusual things.


You must wonder, is this a draft plan or construction use plan. No kidding it is the plan city building department proved. And it is not the only one. Same problem everywhere. No body realy check the plan very carefully.


I used hire some draft person help me on the design work. Some on really drive me crazy, if the one have not enough experience on basic information, the time I spent on check his drawing will cause me 3 time long for me to draw from scratch to finish. So I understand, the architect put seal on the beginner’s drawing, he never spent time to lock through this plan, when city engineer saw the license architect seal on the plan, he would not even think it will have this kind of problem.


That is the reason I feel glad that the owner got luck to have a good framing subcontractor. Because, if contractor build as the drawing, for sure, it will have a lot unfixable settlement crack all the time on drywall and exterior stucco. The future law suit possibility is very high, and it will bring every one in the case the case will drag very long. Owner can sue general contractor along with framing sub contractor, of course framing sub will complain he did with drawing, architect will complain contractor should point out during contraction with any questions…., owner’s house have to be opened to check the reality construction work quality. Things can be really nasty.


For this case, the framing sub contractor just eat the extra cost by put 8 sheer holdown in to foundation and bought some extra joist material and tong and grove ¾ plywood on the floor. He eat those cost build this home addition better quality as I suggested. But think about it, not every one that lucky. Most case, sub contractor will ask extra charge to general contractor, or owner, and those meter is the first start point of any arguing or lose trust in between owner and general for later on through this project.


Good luck

problem project example of home construction

Problem Project Example

One of client being refer to me, which is a home addition project. before the job start last Jun, I stopped by and consult for them about design idea and how much budget should owner prepare. base on rough drawing I told owner it will cost in between 120k to 150k, and job might take 4 to 6 month. if they want to do some other portion remodel together with it will cost more. and back then the owner doesn't need me refer some reliable crew for them. they will use the crew referred from designer.







After almost a year, this owner end up going in to the court now with the contractor and the job not even finish framing work yet. contractor suit owner for short payment and stopped work. owner try to defense for not making enough progress. So many month past the job still not finish framing work and whole job stopped. now every of owner's friends focus on help owner how to win the court law suit, and if owner can get back some money from contractor or not. 2nd contractor try to took over unfinished job, still having problem, because a lot of things will be charged for extra.






For the owner not only cost more than budget, but also need extra money pay for all the legal settlement. I try to find out how much the owner did contract with first contractor, they told me, it is about 100k. couple of month ago I was called for help, when I see the second contractor’s work, I really don’t like it. They are missing holdown bolt, missing anchor bolt, wrong nailing space on exterior sheer wall plywood panel. Over cut on roof rufter lumber…






Why it is happen. Most of chance is lack of planning for the budget and miss choose contractor. When owner plan to do this extension work. They miss their study or get wrong information from some of friend, and try to save money from unrealistic situation. And get referral from wrong person.






When a contractor can take the job try to follow your unprofessional number, something fishy. A good contractor, will give you a quote by read plan carefully, check job site carefully, try to figure out how much unforeseen situation possibility. Then add up overhead and profit margin. When owner try to cut price. They will try to see if it is possible to cover all the cost or not. If the number being cut too low. They will tell you “no” because the price unrealistic. But if contractor can drop price try to get job first. Either this contractor never understand the job or they try to get the owner first and then charge big change order later.






Compare good contractor and bad contractor. Good contractor is reliable. They take things seriously. That make them plan the contract carefully, once contract signed, they will feel obligated for all responsibility both on job quality and financial number on the contract. Bad contractor, the have bad habit for not being serious for anything at all. They will never be responsible for your job, they just have talent to bill you extra.






But mostly owner don’t take professional people consulting suggestion. And don’t have enough knowledge for construction. Only cut price, but don’t know how much will out of range. Both good and bad contractor know when owner cutting price out of range. Bad contractor will feel your really don’t know any of the construction. So they have more confidence to nail you after job start. And they will more confident to use unskilled cheap worker to do your job because you don’t know what is good job what is bad job.






Good contractor care about their name. so they will try to use high skilled worker or sub contractor to do the best job. Bad contractor since they don’t even know what is good job, they always try to hire cheap worker or sub to save their cost and make best profit themselves from your low price contract, they never care about your house your job. Even some time they hire temporary worker from homedepo, after work drop of them without pay them. Some of worker come back to job site still material or tool to get pay check compensation.






Construction not 1 plus 1 equal 2 business. Before sign contract consult some people have both knowedge from design and construction. Review contract and check plan carefully, it will help a lot.






Good luck for every one.

Try to being a smart owner then end up bloody tearful experience owner builder

Try to being a smart owner then end up 

bloody tearful experience owner builder

This is the most common situation for experience to be an owner builder or dream home owner.

“Go find a professional contractor even you fill your going to pay little more, don’t do like me went through with bloody and tearful journey, it is not worth it, and in the end I really not saving anything.”

This is the word I heard form one of my client 5 years ago, he’s colleague said this before my client hire me for his dream home in Palo Alto California.

It is seams like very one know, get 3 or more contractor bid and choose the middle one. Yes it is not wrong, but in reality it is all depends. 

Most of  in bay area are high educated or high income entrepreneur. People have most strong demanding habit. They always think construction guy not as smart as themselves. But they forgot one thing. Every business has their own business nature, knowledge, and construction is the most complicated and full of uncertainty business nature. And also need faith in-between job and contractor, owner and contractor…

Like I always said, this business is not a one plus one equal two business. Actually it is never end up like two. Most my experience is bigger than two. Most people not hire me which hired some cheaper or expensive bigger crew are all end up less then two.

It is not because whose smart whose not, it is all because this business has strong business nature unlike other business. Since all architect never can figure out all the detail on the design, and also since owner never can figure out what they really want until everything finish. It is add a lot uncertainty on the project.

On the other hand, contractor have all different background. Some from being either carpenter or other trade prentice, some from architect background, some from business management background some from realtor background. They don’t have same knowledge. Which means they all have different way to do the estimate.

The main different is the personal characteristic. Most honest contractor can give farley realistic estimate than any others. But owner hardly to know, who is the one being honest. We know, the similar things or human most of the time go together naturally. Referral is very important. If your friend hired this contractor before. And their quality and work attitude feel well. That is most important information. You should go for this contractor not only base on his price. Since it is referral the same contractor won’t bid big different price if the project not quite big different.

I mentioned before for a 3000 sqft new house, the price could be 150k to 200k different.

Most of cheap contractor have those problem

1. they never really read plan carefully before give you quote. They just check 1^st 2^nd page of plan lock at how many square feet of house, the times $ /sf. Average. The reason for this is they are not really can ready plan well.
2. they want to get more job as much as possible because they can not management their cash flow well, the keep dig bigger hole and use dirt to patch previous smaller hole.
3. they have all the cut corner subcontractors follow with him or his crew try to do everything themselves without use better professional sub trade. (sometime ok, sometime not. But at least he save a big chunk of sub profit margin)
4. they have very good technique for playing with change order after get in the job, since 9 out of 10 owner like cheap bid and then they add a lot extra charges at the back.

Next article I will tell you some real story for hired cheap contractor end up with. But for now I just want to tell you. Do not go to the contractor which is very cheap and a lot cheaper than any other bid ever 90% chance you will suffered and end up cost even more.

Common problem number 1 about build your dream home.

Common problem number 1 about build your dream home.

This article I would like start talk about common problem before you really start build your dream home. And this is one of biggest problem and is a trigger of all the rest of problem.

If you believe faith, you will believe a good start is the key for the whole smooth experience until the end no matter anything you want to do.

The problem is:  Either you get a great architect made a supper great design, but once you start get contractor estimate you realize it is far over your budget. Or you get a cheap designer or you did design almost your self, you think you get best floor plan, but actually you will realize there is a lot of mistake can not build or not clear to be build during construction. You have to pay much more on contractor change order for the adjustment during the construction.

Unfortunately 99% of good architect don’t have knowledge about how much it will cost for the design detail he or she draw. Especially the best architect. Because the are good at on imagination and design, and they have a lot of big deep pocket client believe and respect their imagination. And enjoy their professional work.

Cost is owner’s business. You hire me a good architect, you should have enough money to build what every I draw. Other wise lock for the cheap designer.

99% of cheap designer or owner helper never good at 3 dimensional imagination. They play floor plan only like playing puzzle. Then have no ability to imagine how the 3 dimensional space work, how 3 dimensional building structural work, how 3 dimensional architecture element work.

Build is owner’s business. You hire me cheap. Because I drew what every you want me to draw. I am cheap because I am actually just a drafts man put owner’s design together.

The price of design a 3000 to 5000 square feet single family house, could from $25,000 to $100,000. the price of design a 1000 to 1500 square feet home addition could from $3000 to $18,000

The cost of build a 3000 to 5000 square feet single family house could from $550,000 to $2,500,000. the cost of 1000 to 1500 square feet home addition could from $180,000 to $500,000.

I am not try to scare you. I am telling the truce. It is a big difference on cost. For so many years design and build business, I see a lot of crazy situation. Just be ware of this common problem.

There some tips for you.

1. Find right architect. When you interview architect. if it is expensive good architect,  not only pay attention on the great work he or she did. Don’t only concentrate on enjoy nice picture of there work, ask about where those project located and how much it cost to build this great works. Go visit project and talk to the owner if possible. If it is cheaper architect or designer, also need go visit project and talk to owner to visualize the actual building, feel the design, try to find out if any problem during construction.
2. before architect settle the final design sketch with you, you might start contact         your prudential contractor. Let them take lock about your project. If it is good contractor, they might can give you ball part range of the cost. And might also will give you some suggestion on design. Either you picked expensive architect or cheaper designer.
3. start interview contractor even you don’t have final design, take lock the picture, or visit project of their previous project. Ask how much the project cost, you can get the sense of how much money vs. what kind of house you could get.

Good luck wish every one have dream come true and enjoy your dream home and dream life.!