Brian's Articles

Water: Your worst enemy (actually your homes worst enemy)

There is no greater enemy to your homes stability, integrity, functionality, and comfort than water. I speak from experience on our own projects when broaching this subject. Water will find its way into any nook, cranny, and crevice it can and cause massive damage. This can take place very quickly or slowly over time but eventually Mother Nature will win. That is why it is imperative to take every precaution necessary to maintain a dry, safe home environment.

The main focus when assessing your home and property is making sure that water flows away from the house. This is primarily done be grading the yard such that the ground slopes away from the house at least four inches for every foot. If that is not the case, speak with a landscape contractor to address the issue.

As for other points of entry, leaky roofs can wreak the most havoc on the remainder of your home. This can cause damage to insulation, drywall, framing members, and wood floors among other things. Be sure to have your roof periodically inspected for broken shingles, unnaturally loose shingle granules, loose plumbing boots, and protruding nails.

Water may be valuable when boating, you just don't want to be setting sail in your basement. Assess these couple of items and the only water in the house will be in the bathtub.

Survival Guide: How to survive your renovation.

One of the most challenging aspects to renovations big or small is dealing with the construction on a daily basis. It's the dust, cramped living spaces, fewer functional bathrooms, and yes, more dust! Unfortunately it is the pain that most must survive in order to enjoy the beauty of the finished product.

But how are you to survive such an upheaval in you and your family's lives? There are several ways to attack this beast. First and foremost, be totally aware of the renovations you are tackling. Major renovations such as master suite additions, kitchen remodels, or complete home makeovers will be seriously intrusive into your everyday life. For these types of projects I always recommend that homeowners move into a rental space for the duration of the remodel.

For more minor alterations, staying in your home is possible but will take some patience and understanding to survive. Always thoroughly discuss the preparations with your contractor and be very clear on your expectations of cleanup. Realize that no matter how many layers of plastic are between you and the construction dust will find its way into the untouched portions of your home. This just comes with the territory.

If moving out during the construction chaos is just not an option, consider performing your renovation in stages. By breaking it into manageable chunks, you will lengthen the timeframe of your renovation but at least you will be able to stay in your home. Just be very aware that you may need a lot of patience, a sense of humor, and maybe even a compass to find the mini-fridge in the dark.

Picky, Picky: How to select a qualified, licensed contractor.

Selecting a contractor to perform your repairs, renovation, or custom build can be a scary proposition for any homeowner. This is especially true if you don't have a friend or family member who can recommend a trustworthy company. So where do you start? Tack your local yellow pages against the wall and throw a dart at it?

Thankfully there are better options than just throwing caution to the wind and blindly picking someone out of the phone book. First of all, make sure that any contractor you interview is licensed and insured. If that simple criteria cannot be met then move on quickly. Next, talk to friends who have just had renovations done to their own homes. This can be a great way to either add a possible candidate to your list or avoid the nightmare contractor who just butchered their latest project.

Also, talk to vendors in the industry who deal with contractors on a daily, personal level. Your local lumber yard or window/door supplier will be tied into the undercurrent of information surrounding contractors that purchase their products.

Finally, when you have interviewed and selected a qualified, licensed contractor, ask for at least three references and contact them immediately. This will allow you to directly hear from others just how reliable, cautious, trustworthy, and skilled your new contractor is. Just remember, you can never be too picky. That is unless you excel at throwing bulls eyes.

Licensed to Thrill: Why required licensing in Georgia is good for business.

One of the biggest changes for Georgia contractors in the past year has been the requirement of licensure. Previous to July 1, 2008, licenses for general contractors in the state of Georgia was not required. This simple fact meant that any Tom, Dick, or Harry with a hammer and a truck (or Pinto, Yugo, woody wagon, etc.) could call themselves a contractor. Unfortunately, this led to many homeowners being very unsatisfied with renovation work performed in their homes and a sour taste left in their mouths regarding contractors. This is precisely why the state government implemented the license mandate.

What does this mean to contractors in Georgia? The main impact is felt in the ability to acquire permits. This means that unless you are licensed you will be unable to pull permits for any project, therefore greatly reducing earning potential for those without.

Change is difficult and I've heard many in the industry complain about this issue. But really, we should be embracing the notion of improved standards and practices. We as licensed contractors now face less competition within the business. This is due to the natural attrition of those that quite frankly shouldn't be swinging a hammer. So come on, embrace change. You didn't really want to lose a job to Johnny the carpenter in his Chevette, did you?

Inspections and you: What you can learn from being onsite for city building inspections.

I love to learn. Whether its experiencing a new culture or just understanding the meaning behind a new word, I love to learn. This also holds true in our business. My main responsibilities include everyday management of our construction sites and nothing can be more educational than being involved in city inspections.

The amount of information we are required to know and understand as licensed general contractors is immense and invariably there is some aspect of construction that is new to me on every project. Our building plans are always evolving, project by project, which allows for the possibility of a new building code application to materialize that I haven't dealt with before.

That is why being onsite during inspections can be invaluable, not only from a knowledge standpoint but also from a time-saving standpoint. Inspectors are called upon to make sure that construction practices are meeting building codes and if they don't you must make corrections before moving on. So if you can learn from past mistakes that are pointed out by inspectors, you can avoid them in the future and save yourself a lot of time and money. And what is time? Money!!!

Head babysitter: Trials and tribulations (mostly trials!) of managing subcontractors.

I would be a mighty rich man if I had a dollar for each time someone said to me, "I wish I could do what you do. It looks like so much fun!" And trust me, it is fun. And yet it is a lot of work. It can also be extremely frustrating at times. One of the main culprits is subcontractors!

One of the things you will always hear me say is that my job description is defined as head babysitter. That is the cold, hard truth. Unfortunately, many subcontractors need constant supervision and quite often someone to check and recheck all of their work.

There have been times when I have been waiting... and waiting... and waiting for a sub to show up and they never do. There have been times when a sub will appear on the jobsite, say they need to run to the store for a missing part, and never return. And then there are times when the work is done but royally screwed up and the sub has disappeared leaving me high and dry - all of which forces me to hire someone else to repair the original work and pay double the labor cost. I've even had that same sub that botched the original job call me months after to see if they can get more work. Unbelievable!

Please don't misread my comments to say that all subcontractors are worthless. There are occurrences when I will find a reliable, quality sub that does great work and stands behind it. That is rare and I hold onto the good ones like a favorite pair of jeans. Just be sure to have an eye for a replacement because trust me, eventually someone will screw up.

Box of Chocolates: Why it pays to be sweet at city hall.

As a general contractor, obtaining permits for the work you are going to perform is an unavoidable truth. That in turn means dealing with the gate keeper - city hall!

Depending upon your municipality, this can be an exhaustive undertaking or a relatively easy process. Whichever the case may be, it still never hurts to be as sweet as possible to accomplish your mission - permits in hand asap. As the old saying goes, you can catch more flies with honey than vinegar.

One of the unfortunate effects of our down economy is the fact that local governments have been feeling the pinch just like the rest of society. This has resulted in drastic cutbacks of government staffing including the building departments. With staff sizes slashed, work week furloughs rising, and the number of permit applications still relatively large, fuses are running shorter by the minute.

Building department personnel are still being asked to process the same quantity of applications that used to be handled by much larger staffs. This cannot only elevate the number of applications just waiting to be approved but also the frustration level of everyone involved. This slowdown affects our ability as contractors to move at warp speed, which is the only way we like to move.

Tempers can run short for contractors because time is money. Agitation can spike for city hall staff because they are being asked to handle a much greater work load. Part of the issue we have as contractors is that we never know which side of the emotional coin we are going to see when we walk through the doors. The best thing we can do is understand that they are humans too and usually respond more positively to kindness than the alternative.

Forrest Gump's mom was right. "Life is like a box of chocolates. You never know what you're gonna get." But it will be a whole lot sweeter if YOU are.

Peter's Articles

Short Sales

A short sale is when the proceeds from the sale of a property are not enough or are "short" to pay off the mortgage. Two analyses of first quarter 2009 data (one by real estate site Zillow.com and one by Economy.com) suggest about 20% of all homeowners owe more on their property than the property is worth.

If you must sell your home and you are going to come up short at closing, you should reach out to your lender as soon as possible. Unfortunately many lenders are overloaded with short sales and foreclosures. A quick resolution is usually unlikely. However your real estate agent can help you negotiate with the Bank.

If you are an investor a short sale can be very profitable. However, you must realize that it can take an unusually long time to close the deal. If you are not in a hurry than make an offer and be patient. No today does not mean no tomorrow.

Internal Controls

At this week's business meeting I was discussing the importance of internal controls. Good business practices are key regardless of the industry you are in. It is important to get multiple quotes from vendors and make sure they are in writing. The quotes should state the scope of the work to be completed and should also tell you how long the quote is good for. The quote should also be signed. Also for anyone who provides labor you should get a copy of their insurance.

It's amazing how many companies and contractors will change their prices or say that the scope of the work is different than they thought and want to charge you more money.

It's important to make as much money as you can on every project. Poor or no internal controls will cost you money. I don't mind making a mistake once. There is no excuse for making the same mistake twice.

Get Your Quotes In Writing!

Identifying & Budgeting All of Your Costs

People are always telling me that they would love to do what I do. Buying and selling houses is a business. Like every business it is important to identify and budget all of your costs upfront so that you can make an offer that will yield you with your desired profit. The following costs should be considered in your budget:

1. Repairs- How much is it going to cost you to repair the house
2. Closing Costs- How much is it going to cost to close the loan.
3. Holding Costs- The amount to hold the property will include but not be limited to the following:
   1. real estate taxes
   2. utilities
   3. lawn maintenance
   4. cleaning services
4. Interest- The amount of interest to service the loan.
5. Sales Commission- The realtor's commission or other amount incurred to sell your property.

Builder's Risk Insurance

Builder's Risk Policy is designed to cover a dwelling while it is under construction from start until such time a CO is granted. The Builder's Risk is written on an"all risk" basis including theft, fixtures, machinery and equipment that are on the premises that are going to become part of the dwelling are included as covered property. The policy is written on completed value, so since the exposure increases from 0 to 100 percent of the values over the term of the policy, builder's risk rates are adjusted to reflect the average value exposed.

A dwelling fire policy does not normally provide theft coverage on a vacant building which the Builder's Risk policy does provide theft coverage. Setting a proper value is difficult under a dwelling fire policy while the Builder's Risk policy is written to cover the constantly changing values.

A Builder's Risk policy can also be written to cover just building improvements, alterations or repairs which eliminate the need to insure the value of the entire building, instead insuring the value of the additions or improvements.

A Builder's Risk policy is the proper way to insure structures when under construction whether it is new construction from the ground up or remodeling and additions.

203(K) Rehab Loans

A 203(K) rehab loan enables a homebuyer to finance both the purchase and rehab of a home through a single mortgage. A portion of the loan is used to pay off the seller's existing mortgage and the remainder is placed in an escrow account and is released as the rehab is completed.

As part of the 203(K) loan you can also finance the cost of energy efficient improvements. Basic guidelines in order to do this include the following:

1. The cost of energy saving improvements must be determined by a Home Energy Rating System or by an energy consultant. This cost must be less than the anticipated savings from the improvements.
2. One and two unit new or existing homes are eligible; condos are not.
3. The improvements financed may be up to 5% of property value or $4,000 whichever is greater. The total must fall within the FHA loan limit