Episode 39 - Building Better Together: A Comprehensive Discussion in Homebuilding and Remodeling

Are you ready to make your home building or remodeling project a resounding success? Strap in for an insightful journey where we unpack everything you need to know about managing cash flow, honing in on draw schedules, and leveraging contracts and checklists to optimize your outcomes. Whether you're a hands-on DIY enthusiast, a contractor, or simply seeking to hire one, we've got a treasure trove of tips for you.

Imagine a world where your home's electrical and plumbing systems are handled by dedicated in-house professionals. Sound too good to be true? Join us as we explore the game-changing benefits this approach brings to the quality of your project, the efficiency of workflows, and the ever-important client-company relationship. We also delve into the critical importance of setting realistic expectations, sharing some of our experiences to help you avoid common pitfalls.

But the insights don't stop there. We pull back the curtain on the remodeling selection process, drawing on our own experiences, including a challenging kitchen remodel marred by moisture in the quartzite countertop. Learn from our missteps and triumphs as we discuss the necessity of trusting your designer and navigate the complexities of material selection. After all, your dream home deserves nothing but the best. So, are you ready to become a savvier homebuilder or remodeler? Tune in and let's build better together.

Transcript

Speaker 1: 0:00

The Homebuilding and Remodeling Show. Let's go. Welcome everybody to the Homebuilding and Remodeling Show. My name is Chris Kirby and I'll be your host. I am the owner of three construction companies on the Alabama Gulf Coast. The show is about residential construction. We're going to cover topics of homebuilding and remodeling. Are you thinking of doing a remodel or building a home? Are you a contractor looking to improve your knowledge base or grow your business? Have you ever done a remodel project or built a home? There were so many things you wish you knew or that you could have done differently during the process. Then this show is for you. We break down the process of building and remodeling and how to have the best results during your project. Whether you are DIY-er looking for tips, someone looking to hire a contractor to do a project, or a contractor looking to expand your knowledge base or your business, welcome aboard. Glad to have you. Stay tuned.

Speaker 1: 1:11

We kick off the show with my thoughts on homebuilding and remodeling. I'll share best practices and talk about some of our experiences in business and out in the field. These shared thoughts and lessons learned are meant to help you on your very own journey. Let's go For me. It's super important to understand your cash flow, understand how to put together a draw schedule that suits your needs but is also based in truth. It's based on work completed right. Most of the time in a home build, the bank is gonna they're gonna issue draws on a not just your draw schedule right, but it needs to be on a percentage of completion. And so understanding that and working with the bank, working with the client and having the client understand your money needs up front, having those conversations are a big deal we have. We have changed the way that we estimate, we have changed our checklist, we have changed the way we do our contracts, our draw schedule. It continually evolves and I would say we're in a good place now.

Speaker 1: 2:23

But when I first started out, you know, doing this, there were no contracts per se. It was. It was, you know, typed up and given to somebody, and then we adopted quick books and did estimating in there, so it was a little more official. And then when we moved and started getting actual large jobs and I became a licensed remodeler and home builder to take on those large jobs, we had to evolve and look at the way we did business. So I could just keep up, not just looking at the large projects and thinking I can make a lot of money because I did that. We did that as a company. We looked and said, wow, there's a lot of profit in this job because it is a larger job.

Speaker 1: 3:13

But until you've taken on a large job, the way that you operate is going to be different from the way that somebody else operates. And when you look at, well, let's just say, for instance, right, you're doing $5,000 jobs right now and and then you jump up to 10, and you're like, okay, that's doable. Well, when you take that large leap, going from a $10,000 commitment to a $50,000 job, that is multiple weeks on end, you need multiple employees and you want to make good time on it because the client has high expectations it's very, very different. And if you don't plan and if you don't have systems in place, then you're bound to fail and lose money. We've lost money on multiple projects and just jumping the gun and being trying to get into the project, really before we were ready.

Speaker 1: 4:13

And you look and you're like, okay, it's easy. It's easy as this. Mark it up a little bit, because you know we're going to be a little slower if it's our first time. Add a little bit of add a couple weeks, because you know it's our first time, it's going to take longer, and you think, okay, that'll work. That's how we buffer ourselves right. We tell them 10 weeks and we know it's going to take eight. Well, what typically happens is a 10-week job. We told them 10 weeks, we think it's going to take eight, takes 12. And that two weeks your margins just go to nothing.

Speaker 1: 4:47

And you know it's just one of those things where you have to plan. You've got to understand your capability and your capacity. You've got to have your cash flow figured out. How are you going to pay for materials throughout the job? How are you going to pay your people throughout the job? How are you going to pay your subs? And when you sit down and you write each of those out, and then you look at your schedule and you say, okay, in week one I'm going to do demo and I'm going to have the plumber come in and do a drain move and we'll just say a bathroom remodel. You need to understand, and the client has to understand, that process. That way that week you can say, okay, I need my paycheck, jimmy John's paycheck, and I need to pay the plumber. Well, that draw that week needs to be my paycheck, jimmy John's paycheck, and the plumber in that week, so you can pay your bills for the week on top of overhead and modern materials, right?

Speaker 1: 5:48

What tends to happen and what we do in contracting is we go well, it's a three-week job and I'm going to take half up front and half when it's done. Well, the half up front doesn't go as far as you thought it would, and you can't make it to the second half of the job because you didn't plan the job correctly. And now you're stuck with a plumber who needs to be paid or a subcontractor who needs to be paid, and your priority is making sure that your employee gets to his check. And so you're pushing and pulling and figuring it out, and the worst part is you usually end up borrowing against receivables or borrowing against expected monies in, and so when that $10,000 job now you have to figure out how to finish it you borrow some money and there's interest, and now that job is just starting to slowly eat you alive, or you borrow from somewhere else to complete the job. You have to make sure that you are planning properly or these jobs and construction will eat you alive, if there's anything that I can say, it is make sure you plan you plan the money portion just as hard as you plan the scope of work and that your money portion aligns. You are asking the client to pay for what's owed and what's due when it's due.

Speaker 1: 7:23

All right, guys, till next time, thanks, this is our new contractor shout out segment. We are going to pick 40 contractors a month that tag their business page in our post on the home building and remodeling show Facebook page. And this month we have with us HH renovations out of Brighton, michigan, palm Beach. Classic hardware out of Palm Beach, florida. Hazlett construction in Mercer County, pennsylvania. Homestyle Improvement in Frederick, maryland. All set flooring in St Peter's, missouri. Thank you all for commenting on the monthly post. We will do another post next month. Like, subscribe and share our Facebook page and hopefully you get a shout out next time.

Speaker 1: 8:10

And now we move into shop talk. It's the portion of the show where I bring in a co-host and we cover trending topics in home building and remodeling. Hope you enjoy. Let's go Over to you. You want to bring in good people and you want people to stay with you. Well, doing 1099s isn't going to last forever, right? So for the young mentality or the people who really need or want the money upfront, then yes, they're happy to get a 1099. But what I've seen over time is that when they realize the benefits to being a W2 or that they do have to in fact pay Uncle Sam his money later, it catches back up and they didn't do that.

Speaker 1: 8:57

Yeah. So, like, what happens is, you have to make them understand, and we hire people who understand that. But, all that being said, that's how, when we price something, we price it to fit our needs right, and so there may be individual contractors who price differently, but this is the way we do it. So why are we starting to tick up our margins and why are we not scared to lose business over that? Like what do you think you know?

Speaker 3: 9:28

we're not for everybody, honestly, yeah, if you're looking for the cheapest price, we're not going to be for you, yeah, and there are good individual contractors Right, this doesn't take away. We're going to only find a good, especially somebody that's just started up you know, trying to get on their feet. They're going to. You know they're hungry, so they're going to try to and not taking away from them, because they can be some of the best out there. Yeah, absolutely.

Speaker 1: 9:57

They know what they're doing, right, Right. But for us we have a company, a growing company.

Speaker 3: 10:03

Right.

Speaker 1: 10:03

So we are going to be more expensive.

Speaker 2: 10:06

Exactly.

Speaker 1: 10:07

We're probably not the most expensive, but you know we're not. We're by far not the cheapest Right. So you have recently adjusted our numbers up to keep up with the growth and demand Right?

Speaker 3: 10:20

So yes, like you said earlier, we've brought on just this past week six more employees. Yeah, so we have to be able to afford these guys and getting that electrical and plumbing you know what I mean off the ground. Yeah, it's under groove now.

Speaker 1: 10:34

Yeah, so what we've done is we've brought electrical and plumbing in house, which was a huge bite on salary. We, you know, had to bite the bullet, but it's helped us, I know. For you estimating now, you've already got basically a cheat sheet Right. That was revamped by the plumber this morning.

Speaker 3: 10:53

Yes, sir, right, so he kind of helps so much, yeah. And then it helps, like you know, our jobs running a little longer than scheduled because of having schedule conflicts. Well, now we control all that.

Speaker 1: 11:06

So the workflow is there.

Speaker 1: 11:08

Everything is there Way better. Not only that, but like that you can get some real expectations from them. So you know, as a sub you always buffer, you always add to and you know, just like as we do with the client, we're going to let them know. You never want to tell a client one day and it takes two. Right, you never want to tell a client one week and it takes two. You want to do the opposite of that, and not every time, you want to be as real as possible with them. But if you tell a client that it's going to be two weeks and they plan for that, and it takes three. I mean, you know it kind of gets rough. Anytime we're in a job longer than we're supposed to be, it definitely gets rougher.

Speaker 3: 11:50

It gets really hard to get out of there. That's right, it's hard to get out.

Speaker 1: 11:53

The client is a little more frustrated with you because you've been in their house a little bit longer than expected. And then you know, usually it's because of a delay and when a job sits, the client is just looking around at the job.

Speaker 3: 12:07

That's when they start. They're going to pick it apart, they're going to Google in things and you know, yes.

Speaker 1: 12:12

Absolutely. But so, with us now having those what we used to refer to as subcontractors in house, plummet electrical. We get the real raw data right. Right, because we're paying them in house what used to be basically a per fixture right, we still charge the client that way. Right, but we make sure it fits inside of what we pay them and are we, you know, we're buying their material.

Speaker 3: 12:41

It's going to be their labor costs, you know, and just as long as their stuff fits into the price per fixture. And you know we still kind of make a little something for going through it all.

Speaker 1: 12:56

Absolutely, and so it helps you when you're looking at the not just the price of the project but the project flow and doing your numbers as the estimator, you're looking and saying, okay, now with the in-house plumber. He told me this is going to be two days. Well, you can bank on him being there for two days because he works for us.

Speaker 2: 13:17

Right.

Speaker 1: 13:18

He's a part of our company now and so that where you may have again they're buffering to us, you're adding to it and then it gets to the client where it's. You know one day. Well for you, if they tell you one day you're going to tell the client to right.

Speaker 1: 13:36

So it sets some more realistic expectations for us and helps us improve just the quality of work, the flow of work and the relationship with the client. You know, and really it started last week is when they both really started working with us. So we're going to share with you all how that is going and we'll dive more, you know, deeper into the numbers and what that looks like. And you know, I think we are trying to challenge the traditional system of how a construction company does business. It's usually an individual or two right. A home builder, for instance, is going to build a home utilizing all subs right.

Speaker 1: 14:23

And so we're doing almost the only thing that we have to sub out now is roofing, framing and then the concrete and foundation and major drywall Drywall. Yes, other than those four things, we have electrical plumbing, painting, flooring, tile. Everything we do in-house our crews. So when they hire Kirby, when they hire Kirby homes to build their home, kirby is involved throughout, all the way through, and it has made a tremendous difference in the flow of the project, the quality of the project, the relationship with the client, because they are all Kirby now and that is not traditional and it has a heavy burden that comes with it Employee management, employee retention, the cost of all these things.

Speaker 1: 15:17

But what have you seen that you think has helped with us hiring employees and having full-time people versus you have been in a couple of other scenarios. You know you've been 1099 yourself. You've done individual work, I'm sure. So just talk about some of that experience versus how we do it and what you would say the benefit to having employees is, because some people think we're crazy. They think what are you guys doing over there at Kirby? How can you maintain that overhead?

Speaker 3: 15:55

So it's tough. I mean it is tough, but it makes everything so much easier Just to be able to control all these different skill sets and the quality. You know what I mean. I mean it makes everything so much better compared to, like, if you're doing your own thing and you're having to wait for a sheetrock guy that's supposed to be there Tuesday, don't show up to Thursday, and then you already had the painter scheduled for Friday and the painters are booked up the next week, and then you gotta wait.

Speaker 1: 16:31

Yep, it's a trickle down.

Speaker 3: 16:33

And it costs time and money.

Speaker 1: 16:34

But then where you know, where most individual contractors are stressing about building a home with subs and a sub keeps delaying or can't get there, can't get there. Or we've been in the scenario where we have one primary sub that if they don't get to it, and because we've gotten so comfortable with them, if that sub doesn't show up to do the job, then we are really hurting and delaying a job. Yes, and then what happens is, no matter how great the relationship is with that client, they're like, okay, I get it, but it's been one week, now you're telling me two and then three, because we've crushed ourselves on one really good subcontractor.

Speaker 3: 17:21

And then, yeah, no offense to them, but they get to where they overbook themselves very badly, just trying to take in as much as they can. Why they can you know?

Speaker 1: 17:33

Yeah.

Speaker 3: 17:34

And it'll throw some things off.

Speaker 1: 17:36

Yeah, I mean so it kind of hurts us all the way around having to use subs, but there are subs who run good companies and they are able to kind of keep up. But for us it's not just that. Oh, we're just bathroom remodlers, but we're doing bathrooms, kitchens, we're doing additions, we're doing whole home models, right, and so we're running four, five, six jobs at a time. But also we have Kirby Homes. We're building houses, custom homes, from the ground up, and right now we've got five houses to start in the next five months and so and we want to keep doing that we're not Now.

Speaker 1: 18:20

We're gonna move into the portion of the show where we talk interior design. We're gonna bring in an interior designer and we're gonna talk trending design and products. Hope you enjoy. Let's go. And two, even with the paint, the type of paint that we get from Sherwin Williams and that we use on these projects, the transformation and the change in the paint products from 20 years ago to now, right, you're talking about. So there's different types of paints that you use for different applications, but again, these colors are built to last. The paint that we use in these places is durable, and so when you're looking at something like a weight room. You kinda plan for what the use of the room is right.

Speaker 2: 19:12

As an interior designer.

Speaker 1: 19:14

So when you're painting you're not going to just use an ordinary paint where they can be in there lifting weights and hit stuff. You've got a plan for that with your lighting If they're gonna be in there a lot. There are different settings on the now can he adjust the settings on the one he just did?

Speaker 2: 19:31

Yeah, so there's actually different lumens he can adjust it to you and different wattages.

Speaker 1: 19:36

Very cool.

Speaker 2: 19:37

So now the ping pong room and the weight room are right next to each other, but the ping pong room is on the ground level floor. But, to get into the weight room. It's actually the basement, but it's 20 foot ceilings, so it's still open to upstairs. We're keeping it light and bright, just as we would on the even taller side. Just so it because they blend together. And then there's a big wall of glass that opens up into, like the hangout area for the students in the kitchenette.

Speaker 2: 20:08

So it'll all flow really well, gotcha Okay.

Speaker 1: 20:12

And then. So for us, we did the planning, you did the presentation, we won the job for both companies. So the remodel side and the interior design side. And so now working together. So contractors and designers can sometimes butt heads because you're putting together the vision for the client that, right, there is what the client wants to see. You've presented something that's what they want to be. The end result Sometimes during construction, that plan has to be modified or changed a little bit. Right now, so far, not too much. Now we did have a situation with the ceiling where we're gonna kind of have to do pretty, you know, pretty intense work to do a ceiling portion in the remodel. However, I don't think overall it's changed much of the overall project. But how do you? Are you decorating or what is the design feature on this project? So what are you doing as designers? What is Kirby Interior Design doing for the Sports Academy?

Speaker 2: 21:17

So we're really just bringing it back to life, right, bringing it to the whole newest side.

Speaker 1: 21:22

So you're still helping with selections, even though they have their colors and stuff.

Speaker 2: 21:26

Yeah, we did all the selections, like they were completely hands off, as like these are the colors we're thinking, because this is the colors of what we have and literally, that was it. So they were, they Fully trusted me to go and find all the materials, but still so does it look good. It's gonna look great yeah.

Speaker 1: 21:43

And so it's starting to come along. And that's just a testament to you know kind of how you operate, that, even though they're new, you know they've got a job to do and so it's hard for them to sit and you do these time wasters where let's look at every single detail and pick every single option and, just like when you're doing a home build or when you're doing a regular remodel, there is a lot to be done and there are a lot of selections and options and choices. So for them to get to a point with us, with you, that they just say here's kind of the idea and let you run with it, that's great, but for the client it's even better. It's even better because, again, they don't have to babysit the job site right, they can check in. They're always gonna wanna know what's going on and so, day to day there and they're working and being a newer onsite school.

Speaker 1: 22:42

You know, even though they've been around for a while, they've been online they're able to now perform their day to day job and build the business while we're in there doing the work for them, updating, which enhances the business and the clientele that they can bring in. And as if anybody knows, you know, when you're looking at where to go for school and where to go for work and things like that, you walk into a space that's doom and gloom. You feel that you know, and so designers really can change the attitude or change the morale of a company by making a space light and bright or giving it detail and things like that. And you know, and we'll do some before and afters on this project specifically but I think for us you know, you, you got to get the point across that designers make a difference in your day-to-day life by being able to free up your time and help you with selections, because it could be overwhelming.

Speaker 2: 23:42

Oh, it can be very overwhelming and we really tried to make it as easy and simple as possible, because I don't ever want to like overwhelm anyone with 20 options.

Speaker 2: 23:50

Yeah, because that's not helping anyone so we literally went in there with two different options. Yeah and it was like this is what it is same line of colors that we did different tones, so we had, like gold faucets and fixtures as an option, or we did chrome. Yeah, and price wise they were pretty similar in price and it was just a matter of what they preferred, but then the baseline of everything else is pretty much the same.

Speaker 1: 24:15

Yeah, absolutely Okay, and there's a there's a long journey with this project. So we're definitely gonna show some before and afters and some of the good work that the designers have going on on this commercial project and then we'll hop on over and talk about some of the trials and tribulations for our Kitchen and bath side. So you know, we've dealt with a situation recently where we are doing a kitchen remodel for a client and pretty much it's the Murphy's law, right, everything that could go wrong has gone wrong. Yes, the client is, luckily, we're okay, they understand, but everything from cabinets to Countertops right. So tell me about what happened and this is just for informational purposes, so people can understand. So we had a situation with a quartzite countertop where the we we purchased the quartzite from a company that we use they installed it and then there was a water ballooning effect.

Speaker 2: 25:23

Yeah, like it there were. There was some sort of moisture in the quartzite, it's self right itself, and it wasn't there initially, but then it just kind of appeared and like bloomed from underneath somehow. Yeah there were different things like different scenarios. We're trying to figure out how it happened.

Speaker 1: 25:40

Yeah, yeah.

Speaker 2: 25:41

Courtney, being the kitchen and bath specialist that she is, she's never even seen it in her what almost 20 years of.

Speaker 1: 25:46

Yeah, experience, so it was Definitely learning, yeah, and and, and you know, that's one of those things when you dig in it. That was the first time it's ever happened to us.

Speaker 1: 25:58

But it's not the first time that it's happened, right, and so when you actually start to dig in, you figure out Okay, this sometimes happens, but the homeowner, they don't know and they shouldn't, you know, they didn't want to pay for have a product in their house that they weren't aware of water ballooning. And so the vendor came and Replaced the countertops. Okay, but that wasn't the end of the countertops that was so what was the next scenario that happened?

Speaker 2: 26:31

So the next scenario was it wasn't had dried as much as it should. And then there was some other issues the same right, wasn't it? Yeah, so there were two different you came from the same, like family, I'll say, of court site, when they come in and like bundles.

Speaker 1: 26:47

Yeah. But it was still off so that we had, like, the main portion of the counter, like we're, has an upper level of the Countertop yeah lower part the two seams came together and I mean it was it was right in front of the sink, right, no, no, it wasn't like facing the dining room table.

Speaker 2: 27:07

So yeah, like the bar stools would be okay. Um, it was like a light and gray.

Speaker 1: 27:13

Yeah, I mean so, like even from the pictures. Yeah, you can. You could see the seam and where you know they'd put them together. The colors were right there. Sometimes they're, often it's it's really not noticeable, and but this one was.

Speaker 2: 27:26

This one was there was significantly Noticable and when we were going back and like trying to choose, like when we ripped it out the first time, what should we do?

Speaker 1: 27:36

She loved the court site.

Speaker 2: 27:38

She wanted that material. The, the person where we got it from you know he. He did explain, you know, like this they were running out of it.

Speaker 1: 27:48

Right, it's all we have left.

Speaker 2: 27:50

Yeah, so she okayed it.

Speaker 1: 27:52

Yeah.

Speaker 2: 27:52

Well, once you get it in your house and you butt it up against each other and it doesn't quite and it's there, sitting on there, a brand new, yeah.

Speaker 1: 28:01

It seems, you know, she changed her mind and you know, ultimately that's what we do is we try to make our clients happy, so we found a third option. Three Okay, and I don't know, so we'll go ahead. Are they happy with the third round?

Speaker 2: 28:18

She's happy. Oh my god, I got that today, actually that she's she's happy.

Speaker 1: 28:23

Okay, and so you know, is it court site?

Speaker 2: 28:26

Yes.

Speaker 1: 28:27

Okay, cool.

Speaker 2: 28:27

But we got it from a different supplier, it's a different supplier and and it's understandable.

Speaker 1: 28:32

These things are but different yeah and so now we can move forward with the project, because she Was not comfortable Making a back splash selection until she saw the countertop scale.

Speaker 1: 28:45

Yeah, which makes sense. It's not always feasible and it's not optimal for us or you to Wait for this piece and then pick this piece, because it just causes time and money delay. Thanks for joining us today. As always, we are grateful for our listeners and your continued support. Please subscribe to our YouTube channel, follow us on social media via Facebook, instagram and Tiktok, get more info at our website, wwwtheshomebuildingshowcom and, as always, remember who we are the home building and remodeling show.