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Perfect, high end, fast and cheap……..Sure no problem

Posted On: May 12, 2016 | Posted In:

There was a radio guy I used to listen too had a favorite expression.  Sometimes you just need to say it out loud to have it sink in.  If I were to summarize the conversations I have with most of my customers after I let them tell me what they are looking for (and I often do this for them) it would be the same for almost all of them. They would like a big but not to big house, they really want to just be done with it quickly without having to wait for ever for it, nothing to fancy but at least it should have all hard wood floors, a nice kitchen because they love to cook, an open floor plan with lots of natural light, they want it really well-built not some piece of junk but they have a limited budget. Summary, “Can you build me a perfect house, loaded with fancy things and do it really fast and really cheap.”  Read that again and this time read it out loud……..”Can you build me a perfect house, loaded with fancy things and do it really fast and really cheap.”   Now actually say the words out loud, they do in fact sound different when you say it out loud…..”Can you build me a perfect house, loaded with fancy things and do it really fast and really cheap.”

Of course I can…….is the answer any salesperson would feel obligated to give you.  Sadly, I am a builder and not salesman and with that, here is what I know.  The best subcontractors out there have earned the right to be discriminating and with that they chose not to work on jobs where they cannot make money and they take their time and will get it done when it can be done right.  Most people intellectually understand this, yet in the middle of a project that they just want done, it goes away.  The best materials out there are better, they install better, the work better, they wear better and they look better and they are a lot more expensive.   The world is full of products that attempt to be most of these things but they are either very expensive of they fall short in some way.  So does this mean it is hopeless?  No!!!  If you can have realistic expectations it is far from hopeless.

Modular home manufactures negotiate contracts with suppliers every year.  They go to companies that make Cabinetry, flooring products, Doors and windows as well as lumber suppliers and roofing and siding companies and try to set competitive pricing agreements with them.  They have all learned the lessons of cheap garbage products, ones that are difficult to install, fall apart easily and do not stand the test of time.  They have learned that Cheap usually cost you money in repairs and service calls.  What is interesting is if you were to go through 40 modular manufactures website, and look at the product lines they carry you will see the same names over and over again.  Why because they are the BEST VALUE.  In other words the manufactures have done the homework and research, product testing, market research and price negotiations for you.  Combine all these products and put them together in a controlled and inspected facility, which will allow the completion of construction to happen more quickly on site and well you are headed in the right direction.

Then hire a contractor who knows the sub-contractors in your area, has worked with most of them, fired many, lost a few to high prices and has weeded through to find the best value in workmanship and you are well on your way. The end result of combining a quality Modular home with a Solid General contractor is you get most of what you want.  It will not be perfect but it will be really solidly built, it will have the quality of products that you chose to pay for, it will be built considerably faster than the time it would take anyone else to build it right and it will likely save you a lot of money over building the same house another way.

 

That to me sounds like a really good choice.

 

 

 

 

Cost to Buy v.s. Cost to Own

Posted On: May 9, 2016 | Posted In:

You know for a long time I have said that you can buy more house on the open market then you can build new for the same money.  Sorry, that has not changed yet.

This is another way of saying. old house are cheaper.  But they may not cost you less to own.  Cost of ownership is a function of what you pay for it, plus what you spend to keep it up and live in it less the money you sell it for.  Let’s say you buy a house for $200,000 live in it for 10 years put about $40,000 ($4000/year) into improvements and maintenance and then sell it 10 years later and it sells for $240,000.   Add in annual taxes, heat light and power and interest expense on your mortgage and you might have lived there for a cost of $100,000 which sounds like a lot but really is pretty cheap.  Do the same math with a $1500/mnth apartment and you could be out more then double that.  If you are really smart and buy a house right, do lots of maintenance work yourself over the years and the market grows you could live for free if you sell your house for enough over what you bought it for.

 

Now if you bought a new house for lets say $260,000, clearly a lot more money then the cost of buying the older house.  But for the first 10 years your cost of Maintenance and improvements should be next to nothing so lets say $10,000.  Theoretically a newer house should be more energy efficient so the cost of heat, light and power should be lower. Now when you go to sell it, it is likely a relatively new home compared to the old home.  With that it likely more modern with a layout (floor plan) that is closer to what people are looking for today so it’s market value is considerably higher.  If this is true and again assuming you made good choices you could sell this house with the same 20% value increase for $312,000 with lower operating cost and living expense and might well find yourself getting paid back with a net positive 10 years later.

 

So while the up front Cost to Buy was higher the Cost to OWN is much lower.

 

All of this comes from my own experience.  My wife and I bought our second house a number of years ago and it was at the time the most popular house design on the market.  The classic center hall colonial on  a great lot in  a great neighborhood.   However, 10 year later we listened to a realtor tell us how no one wants a L/R and a Family room as well as a D/R with an eat in kitchen anymore.  Additionally the rooms were small and cut up and now everyone wants a big open great space with less rooms.  Our closets while they were the huge double door closets with lots of space, they were not walk in.   Because of these things and despite all the time and money we had spent keeping the house like new and modern it was still a floor plan that was very hard to sell, worse yet, it did not carry high market value.

 

We bought this house used at a time when it was the end of that designs run.  The needs of people are every changing and with it what holds value changes too.

Windows are like Sneakers…………

Posted On: October 6, 2015 | Posted In:

I am a runner and I have been for many years.  When I first started running I went out and bought a pair of Nike’s like you see in all the adds, the ones the professional athletes all use because they are the best. Six months into my running career I had my first injury and sought out the advice of an industry professional. My issue? I had the wrong shoes. 15 years later and hundreds of running shoes trial and error and I love shoes from a company called Mizuno.  You have likely heard of them but most would assume they are a second rate company smaller and without the technology of the big boys.  Yet, if you went to a road race you would see that many more seasoned athlete are running in shoes from companies like Mizuno, Saucany, and Asics then the big brands like Nike, Adidas and Under Armor.

As we go through the process of designing and spec-ing a house we are going to build for a customer the conversation eventually comes to windows. Everyone asks for Anderson, some say Pella or Marvin.  Why? because these are companies that have branded themselves as manufactures of quality products that we are all familiar with.  Yet if you go to builders job sites the brand you will see most builders using are from a company called Plygem. Why? because as a professional builder who has to offer a quality product we can stand behind without driving cost up this window is the industry standard.  Is is sexy? No! Can you brag about the manufactures name? No!  Is it a better window at a more reasonable cost.  Ask anyone in the industry and you will get a resounding yes.

Modular builders are always fighting the stigma of be second rate construction quality because for the early years of the industry they were.  However, today the modular industry is in many ways driving the choices the site built industry is making.  They look at what the Mod guys are using, they know they did all the research to determine what the best value is and they just follow their lead.  I believe some people feel that if they tell their friends they built a modular home but it has Anderson windows they get Street Cred for that.  When was the last time you were in a beautiful home and went over to read the label you can barely read in the lower corner of the windows to see if they were a fraud?  You don’t, you look at a beautiful well built house and think, Damn! this is nice.

Don’t get stuck on name brands, the simple business concept of most huge companies is that if they do an effective job branding their products they can charge extra without increasing the real cost of making the product and improve profits.  Don’t pay extra for things that do not have any real added value.

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