I Build It?

I met with Ken Peterson of U-Build-It for an hour this afternoon. For a fixed price of 10-15% of the cost of labor and materials, U-Build-It provides budgeting, site and plan review, clarification of choices, costing (bidding), recommends subcontractors and suppliers, a construction calendar, a detailed notebook, 25 site visits and a 24-hour hotline. The fixed price is based on the square footage--in our case, Ken specifically said that the square feet in the Master Bedroom wouldn't count if we were only changing out door and window trim. He used the word "negotiated" when he discussed this fee. A 500-1000 SF moderately complicated remodel would be $19,115 according to his laminated chart. If it's more than 1000 SF, the fee would jump to $26,038.

Ken explained that most general contractors aim to make 33% on each job. Labor and materials are each 33%. They may quote 10% profit and 15% overhead, but they have side deals with their suppliers and they count on change orders to turn that 25% into 33%. Sometimes, they make more than that, other times its closer to 25%, but it can't go as low as 10% for them to stay in business.

U-Build-It handles the budget based on constantly-updating numbers from their other jobs in the area. Their price for a shower surround, or a square foot of drywall, is going to be more accurate than other estimates. Because UBI gets a fixed price, they are not incentivized to push higher-cost materials or to pad the budget.

UBI bidders, on the other hand, are incentivized to offer good value, so that they continue to be reommended by UBI. UBI gathers bids, using checklist forms that they call "specifications" to ensure apples-to-apples bids, but I would be signing contracts and writing checks. This has the advantage of introducing me to an array of contractors and suppliers, perhaps for the next project. Also, UBI has below-retail suppliers for everything, including construction loans (Wells Fargo won't touch an owner-built project, he mentioned, they prefer Washington Federal and Timberland Bank). At the same time, Ken said "It's not a buyer's club." If I want Erik Futterman (Eazy Electric) on the bidder's list, he's there.

If I need $50,000 worth of materials (lumber, concrete, drywall, windows, flooring, roofing) and $50,000 worth of labor to install it, Ken suggested that I would pay a general contractor near $150,000 for the project. If I give Ken $20,000 and do the admin work myself (which I would likely do in either case), I save $30,000. To put it another way, I get a 20% discount from the contractor.

They start by preparing a line-item budget, and we can do a few revisions without extra costs. This might be a good solution for my process. If I pay them $1495 for the budget and plan review and then go ahead, they'll apply $1000 toward their fee. Or, if I pay upfront, the budget and plan review are included.

I met Ken's wife, Ruthie, and we chatted--their son, Jeff, is a manager at Costco. Greg Bruley is their only other employee; he does the detailed estimates, plan evaluation, and site visits. Until he bought the UBI franchise in 1998, Ken was a general contractor with 38 employees. He gave me a sheet with 30 references on it.

7301 Woodlawn Ave NE
Seattle, WA 98115
(206) 405-4417
seattle.wa@ubuildit.com, ken@homestylingdesign.com
Blog: http://ubuilditseattle.com/