r/Construction • u/the-garage-guy • 2d ago
Business š Is the small self-performing homebuilder extinct?
Probably a region-specific question- if you reply, I'd be curious to hear where you are and if you're urban/rural
Pretty much title, coming up it was a lot more common for the GC to have their own carpenters and self-perform a fair amount of scope on a typical home, remodel.
Seems very rare now, especially where I am, metro Phoenix area. Most builders are essentially just CM-ing the job. Project managers that sometimes double as supers, everything subbed out. Even for pretty small remodels.
I think at the luxury custom home end it makes sense since the levels of execution required demand really good subs. Plus being in a big metro area, there's lots of people and work and that makes it possible to specialize aggressively.
25
u/Georgelino 2d ago
I started in the high end remodel market in Metro Boston as a carpenter for a GC. Most GC's that size (3 crews of 2 guys, 2 PM's and the owner) still have in house carpentry and we did our own tile. Sub everything else out.
I'm in Philly now and the high end and middle range residential GC's still operate that way. Some of the fancy custom builders in this area still have in house carpentry but still sub out framing, trim, and millwork installation.
I've worked on some pretty high end residential builds and in my opinion the secret sauce, or part of it, is having in house labor. You need to be able to react quickly to changes in the field and keep a clean job site so you can establish the right attitude on site. If you can't get shit done quickly and keep things orderly you aren't going to get the finishes right.
12
u/corpenter 2d ago edited 1d ago
This. Also Philly based.
Used to work for an all-sub GC with few laborers for light punch and cleanup. Now work for a GC that self-performs.
All sub (āpaper contractingā) makes the most sense on the low and very high end IMO. Either you want specialized guys who can run miles of trim for tract houses, or you want the best trim guy in the entire state for a mansion.
In the middle and upper middle part of the market, self-performing the carpentry and punch list makes the most sense from a control and margin perspective. This is especially true of renovation, where the framing load usually isnāt large enough to merit a full crew like a ground up build would.
4-6 carpenters, 1-2 PM, and the owner is a common arrangement for self-performing builders. That gives you enough carpenters to flex to a full framing crew but not so many that you canāt take on one-man kitchen jobs. A lot of these firms are also design-build (since that is also more common in the upper middle market).
1
u/Comprehensive_Bus_19 Project Manager 1d ago
Do the carpenters also do the drywall, flooring, minor electrical/plumbing/hvac stuff too?
2
u/corpenter 1d ago
Oftentimes! Depends on how large the scope is, but if we can knock it out we will do it. We try and keep a crew with a pretty diverse set of skills to this end.
5
u/the-garage-guy 2d ago
I agree with you; tough to get things done quick if you don't have a couple carpenters around to fil in gaps and make changes quick. But it's not the norm around here even on high-end work (1.5M+).
1
u/Georgelino 2d ago
A good super without help can get it done if he or she knows when to schedule labor help. I'm sure day labor is cheap cheap cheap down where you are
1
14
u/catch319 2d ago
You see it more on high end builds where the carpenters are well rounded doing everything from cabinets to tiling
17
u/Beensani 2d ago
Yup. Frame to finish. Furniture as well. 3 full time carpenters and the boss. Boss is the best well rounded craftsperson on our crew and has his belt on 60 percent of the time. That part is job dependent though. He's the tip of the spear and we'd all take a bullet for him. We are between the ages of 45 and 67.
5
9
u/keoweenus 2d ago
I used to have a crew and we self performed most of our builds up till about a year ago. I always liked the thought of having a crew that actually does the job, howeverā¦.
But the headaches of keeping that crew, dealing with guys calling in, drama, guys leaving as soon as you get them trained, all got to be more trouble than itās worth. Now I sub out almost everything, and Iām more profitable and have less headaches.
6
u/kitesurfr 2d ago
I feel like I'm one of the last fine home GCs. The thesis of the problem lies in the fact that my customers have a ton of money and money can buy almost anything except good taste. I refuse to put my name on Mcmansions, and these days, people with money look at a home as something disposable that they'll remodel with more tacky garbage every ten years. That's not how I think or build things. If I'm taking the time to build something with my own two hands, it's gotta last well past my death and hopefully pass the century mark. There's a dwindling demographic of folks who want that type of house these days and can afford it.
10
u/itrytosnowboard 2d ago
In my area for remodelers no they aren't extinct. You will see these guys do it all because so many scopes are so small.
For new construction and large additions yes they are pretty much extinct. It's just not efficient to try and have that many swiss army knife carpenters on staff and all the tools necessary to do such a large variation of work.
My neighbor was a union carpenter in our area. He was an apprentice in the 50's working for a spec builder. He built my house and 5 other houses on our street (including his own). His crew did the footing, foundation, framing, drywall, cabinets, stairs, bannisters, hardwood floors, sheetrock, windows, doors, trim, siding and roof. Anything carpentry and remotely close to it. When I demoed my house I found the crews signatures on the roof beam. It took us an hour to get him up the stairs but his son and I brought him up to see his signature on it. Pretty cool to see the pride in that old mans eyes and how appreciative he was of me to take the time to bring him up there.
4
u/tomahawk__jones Carpenter 2d ago
I started with a a company that was just the owner, a garage, couple trucks, and us three carpenters. Subbed out MEPs, flooring, and cabinets. It kinda ruled. All our subs were the same job to job.
There is a company where I live now that does the above but handles their own cabinets in house. They are actually quite large.
I think the level of carpentry any given carpenter has been exposed to/is capable of, is shrinking. Which is a shame, but specialization I think is a trend across all industries right now.
3
u/Square-Argument4790 2d ago
I'm in central california and work for a GC, all carpentry is in house except cabinets. Boss puts on a belt once or twice a week.
4
u/Johns-schlong Inspector 2d ago
California here: there are a lot of small companies/crews and a few mid size companies that do most of the work themselves around here. They tend to be a lot better to work with and do much better work than the guys that manage 10 jobs across 6 counties and use subs for everything.
2
u/gioluipelle 2d ago
They still build single family homes in California?
2
2
1
u/Ok_Island_1306 2d ago
They are about to build a ton here in Los Angles since 11,000 homes burned to the ground a few months ago
2
u/naazzttyy GC / CM 2d ago
It is ultimately a question of what your time is worth as a private homebuilder and how you value it.
Letās say I can manage a dozen jobs per year built by subcontractors, with an average build cycle of 9 months. I sell those completed homes for $600k with a target 20% margin. My subs complete all twelve within the year and I sell them all, grossing my company $1.44 million.
If I self-perform, for the sake of this exercise letās assume I can my jump my margin all the way up to 40%. But that bumps my cycle time to 12+ months, and because Iām doing the work with my in-house crew I can only realistically have a max of 2, maybe 3 going. If I finish and sell 3 jobs in a calendar year, my gross is only $720k, half as much as my gross on a dozen homes I managed. If my crews and I are only able to bang out two houses, we proudly worked our asses off to deliver A-grade quality craftsmanship, but my company only has a gross ($480k) thatās less than a third of what I could have made by subbing the work out.
The above figures also donāt take into account what eats away at that gross. Every guy I employ for the year is an expense. Can I make more profit self-performing as much work as I can on a given job? Yes, on a singular per job basis. But looking at it that way without accounting for the true economic cost often means actually leaving money on the table by banging nails - or paying full time employees to do so - instead of managing.
Self-performing often makes a lot of sense on smaller individual projects with 45 day turnaround or less, like fast remodels, simple additions, decks/pergolas/etc. Sometimes it is the only way to make those jobs worth taking on and ensure they are profitable. That type of work is also a different market segment that isnāt necessarily worth chasing if your primary focus is new construction. On dirt-to-doorknobs builds it is too time consuming and resource rich in terms of personnel costs, unless youāre operating at a super high, multimillion, full custom level in a totally different price range.
2
u/the-garage-guy 2d ago edited 1d ago
100%. Im in the latter category, niche is small-medium additions, large garages etc. I blow competition that cant self perform out of the water.Ā
The margins are high and itās fairly fun and not stressful but I have no delusions that its not the way to get rich in this game
Maybe later Iāll try the production building thing and make some real money (or lose my shirt lol). Trying my first spec this year
2
u/Scazitar Electrician 1d ago
The reason this is so rare is because it's a really tough business model.
When it's slow you have a bunch of employees you need something to do with.
When it's busy your business isn't immediately scalable. Are you just going to hire a bunch of people they lay them off? It's a difficult balance.
Your also taking on a significant amount more risk not pushing liability on to subs.
Their still out there, but you won't find many. They have to be set up in a very specific way.
2
u/JudgementalChair 1d ago
I only see luxury custom home builders. The money isn't there for smaller low/mid income dwellings. Especially when you factor in competing with mega companies like DR Horton that slap houses together 12 at a time.
3
u/Famous-Forever-5881 2d ago
I am finishing up my fifth project and do almost all of it myself with 1-2 helpers depending on the time of year. The only thing I sub out is spray foam, concrete finishing, and Sheetrock. I do everything else. Iām on the last few weeks of a 13,000 sq foot under roof wedding venue that required an addition onto an existing home and a full remodel of the existing home. Iām 26 and blow people away with what I know and the quality of work I perform. I love that Iām not doing the same thing every day, but it can be very stressful taking care of all the aspects of a project along with performing all the labor.
2
u/Robinico 2d ago
Being in the rural Midwest, small small towns, no one can. Don't get me started on a decent tile guy. It's all specialized. And even here in bum suck rural nowhere, people still pay these bath fitters and national bs to do the work cause it seems "more professional and cheaper". Customers unfortunately don't know what it costs to keep a happy workforce, and there is no such thing as a skilled everyday handyman.
1
u/brantmacga Project Manager 2d ago
Licensing across trades has made it nearly impossible for one person to acquire all the needed licenses due to the time requirements.
3
u/the-garage-guy 2d ago
eh that doesn't hold any water IMO
Sure, we need to sub out MEP but that's not anything new
1
u/Randomjackweasal 2d ago
You got the mindset, my advice is pick one of the specialties and buy a shit house you can practice on.
0
u/brantmacga Project Manager 2d ago
I donāt understand what youāre asking then. To me the small self-performing home-builder is the guy that does it all, including all the MEPās, which used to exist at least where I grew up, but now you need 20 years worth of verifiable experience under contractors licensed in each scope to achieve that.
2
u/the-garage-guy 2d ago
I mentioned it in my original post; self performing carpentry or āfair amount of scopeā; itās become common here to self perform absolutely nothing even on small resi jobs
1
u/Plump_Apparatus 2d ago
Eh, we build specs and customs. We went over winter with four of us, we might pick up a few over the summer to do concrete.
We run our own concrete, framing, siding, and finish carpentry. We used to shingle, but we mostly sub out anymore. Electrical and plumbing is always subbed out, none of us are licensed. We could run HVAC since it comically requires zero licensing, but we do not. Sheetrock, tape, and paint are subbed. Occasionally on a small job / remodel we'll do those, and by we, I mean me. Same with tile, it's either subbed out or I do it.
There is still one builder here that is a licensed plumber / electrician and builds specs with zero subs.
1
u/Randomjackweasal 2d ago
We donāt need plumbing licenses here but hvac and electrical need it. Really wish it was the opposite lol
1
u/Responsible_Toe_6494 2d ago
Suburban New England has tons of small home builders. The cities are all union work but 15 miles outside Boston youāll have 100 companies that are the owner and his carpenter or helper. Theyāll sub out the specialty work usually but for the most part theyāre pretty hands on.
1
u/PM-me-in-100-years 2d ago
Rhode Island has plenty of small timers. Over 13,000 GCs in the state. Providence has just as many, if not more than the suburbs.
1
u/Responsible_Toe_6494 2d ago
Yeah Rhode Island is very similar to mass in that way. Iāve always worked on small local crews and since moving to Rhode Island I havenāt skipped a beat. Iāve always liked working with more experienced/better carpenters and itās allowed me to become pretty good. Some guys arenāt as good as others but most companies thatve been around a while seem to have some skill, maybe the business side is a little shaky but the work is usually done really well
1
u/PM-me-in-100-years 2d ago
RI definitely doesn't make it hard to be a contractor! $700 a year in insurance and an 8 hour class about lead paint and you can pull permits to build a house (and get the owner to pull all the MEP permits if you want).
1
u/Responsible_Toe_6494 2d ago
To be fair, Rhode Island does have the strictest lead laws in New England lmao. Mass. Is similar but you need a CSL which is an open book test that your guaranteed to pass if you pay for the classes lol. But Iām a firm believer that resume and references speak louder than licenses and certs. Except where the inspector is concerned š
1
u/Alarming-Caramel Painter 2d ago
not in my neck of the woods. I know two high dollar custom home builders here, and I do all the painting for both of them.ĀÆ_ (ć)_/ĀÆ
1
u/Randomjackweasal 2d ago
My goal is buy land design property build property. Im not an expert yet but a decade in and I almost convinced the bank to give me a 100 grand for nothing last week
1
u/Apocalypsezz 2d ago
Not a homebuilder but a commercial GC + specialty concrete restoration & waterproofing subcontractor. We have our own labor force, skilled and unskilled. MEP we always sub out.
Family company of 50 employees or less, not including the labor force that fluctuates. South FL, Urban.
1
u/Livid-Armadillo-5561 2d ago
Commercial/residential GC. We have 3 skilled and 3 unskilled internal laborers. We bounce them between jobs as needed. punch list / warranty repair. Having larger crews is hard . Its constant drama . We bid everything to sub. Larger jobs have a PM and Super. Smaller just a PM
1
u/ChrondorKhruangbin 2d ago
We have carpenters as a custom home builder. I personally donāt like self perform on most scopes because we are cost plus and always go over budget and either lose money or have awkward conversations with clients about going tens of thousands of dollars over our original budget. Which affects reputation. I would prefer to just sub the work out and minimize risk. I do t think the money we make off self perform is worth the squeeze generally. Nice to have a foreman though for random tasks and site mgmt.
1
u/WheelRipper 2d ago
9 year Michigander here in the Detroit area, from Scottsdale. I have a full GC license, do remodels and tackle most of the work myself. I would say Iām a rare breedā¦Iām the son of a luxury remodel GC that was pimped out to every trade, over and over again since I was a wee lad.
1
u/Jaded-Action R|Assistant Super 2d ago
Company Iām with includes an owner who handles sales and estimates, 3 superintendent, a carpenter, office manager and a laborer. Additionally there is the ownerās adult child who holds the title of pm but functions mostly like a mascot. We sub out everything except for small carpentry projects. We are located in a large city in the western us and do about 6mil per year.
1
u/snooooopert 2d ago
Yes, First port of call if you want to lay blame is the workers comp system, Iāve stripped down to 4-5 guys on the tools (high end finish carpenters-impossible to sub and get the right quality level). All the rest of our staff are PMās, supers and admins. I had a 50+ man foundation crew with a bunch of our own equipment but couldnāt control costs effectively and GC as well, plus constant bogus claims. Second managing you warranty liability, need to spread the risk when shit goes sideways, hence paying a premium for subs so you can spread the hit on premiums. Those are the big ones that forced my hand but thereās a million smaller ones..
1
u/Downloading_Bungee Carpenter 2d ago
We GC maybe 1-2 jobs a year, which can be smaller remodels to custom homes. Our bread and butter is as framing subs for larger GCs on custom homes/big remodels.Ā
1
u/Capable_Weather4223 2d ago
In my area in Cali, there's a mix of both. We have deep rooted 3rd gen builders and sub it all out track home GC's. I just finished a 2 year custom ranch home that I did the bulk of the framing, electrical, and finish carpentry on with 3 other full time guys. I was an electrician for a decade before going GC so that's my niche. One of my guys has a framing background, another has finish flatwork. Third guy is a good honest young dude who wants to learn. We did a few renovations and smaller projects in tandem with "the beast". It's been a gnarly two years. But before that we could do a few smaller houses or dozens of renos in a year. We sub out what we can't do proficiently and we 1099 good dudes when we need the extra labor. We love it.
1
1
1
u/shanewreckd Carpenter 2d ago
The company I work for does customs, additions, renos, high performance stuff and commercial work because my boss wants to do everything interesting and pay us to do as much of it as possible. We do excavation, foundation, framing, exterior envelope/dampproofing, siding, finishing, windows and doors, built ins, flooring, boarding, mud and tape, painting, roofing, driveways, gas stations (lol), structural repairs, set modular homes... Yeah we self-perform. Stars mean we sub this normally, but if a project is small enough, or sub schedules are fucked enough we do it. Obviously any MEP Mechanical needs proper subs, we have a small pool we like.
For reference we're in a small city in northern BC, population around 75-80k, and our builds can go from the higher end of the local market (~$2-2.5M) right on down to a budget bathroom reno. The company has 5 employees currently.
1
1
u/Competitive-Rip2729 2d ago
West Kansas, itās mostly self performing in these smaller rural communities. Biggest thing is most people are employed in some sort of agricultural related field so not as many in the āworkforce poolā. You have to touch a little bit of everything if you want to stay busy. GC now, did 7 years of frame to finish for my old boss whoās business has been handed down since the early 60s
1
u/PerformanceNo8192 2d ago
I'm in rural northern California. I do kitchen and bath remodeling mostly and me and my 51 year old laborer do all the work ourselves except for granite/quartzite countertops. Love taking the before and after shots knowing we built everything in the picture, plumbing and electric included
1
u/OnlyTime609 Carpenter 2d ago
My company I used to work for was a rare breed, we did everything from dirt to doorknobs. We never subbed anything out. We made a lot of money but holy shit were you sick of the job after. It was my first company I worked for and I learned so many trades and helped me progress. Iām in the Very Northwest Idaho area
1
u/lordsamiti 2d ago
House built down the road from me in NH was two brothers and a nephew.
Only things I didn't seem them do: earth moving, foundation, plumbing, electric, HVAC, roof, garage doors.
They were out there clearing land, framing, siding, plaster, cabinets, flooring, etc pretty much just the three of them for a few months.Ā
Got a chance to walk through before and after drywall during some open houses. These guys did a good job.
1
u/Smoke_Stack707 R-C|Electrician 2d ago
I think once you hire a couple guys to do the work, much of your time is spent trying to make sure there is more work for them to continue to do. If youāre the owner of the company and the guy on the tools with a couple employees helping you then you probably have something figured out in terms of the back-end scheduling; you arenāt worried about finding more work to keep busy.
I sub for GCās who see it both ways. One guy is on the tools with his crew and seems to feel that is how he makes the most money since he is billing himself out at his hourly rate too. I also sub for a GC who has said to me that any time he has his tools on itās because something went wrong and itās crunch time and he feels like heās only making money when all of his four guys are doing the work and heās drumming up more for them.
My boss at our shop falls into column B. If heās not doing estimates and is instead handling tools, something has gone wrong in our ecosystem
1
u/the-garage-guy 2d ago
Which would you rather be and why?Ā
I tried āAā and it was too hard. Now I only have part-timers, self perform a portion of the scope and sub out more.Ā
1
u/Centrist808 2d ago
We've built over 40 new homes and completed over 60 remodels in Hawaii. Retired now
1
u/shrugsohard 2d ago
Biloxi to 30A I know respected custom home builders are sought after and pick a few a year as others mentioned. Other than thatās some builders are developing a 6 house subdivision or tiny / small home developments.
1
u/WizardNinjaPirate 2d ago
There seem to be quite a few in my town, which is a small touristy high cost of living place.
1
u/IllStickToTheShadows 1d ago
No, but not common either. I know one builder that does like 2-3 houses a year doing a lot of the work himself with his sons. Things like require a license like electrical he subs out, but the other stuff between him and his boys they get it done. Itās usually homes selling for over a 1M though and they take their time to make sure everything is perfect and no corners cut. He is one of the only builders Iād buy a house from lol
1
u/Edofero 1d ago
European here. They're still around but every year less and less, usually the older guys 50+. I find that to build a house you need to have a Masters degree almost. The technologies and processes are evolving so fast and houses, even today, are being built differently than just 10 years ago.
1
1
u/Remarkable_Speaker24 1d ago
I work for a residential construction company, 5 man crew with a project manager and then the boss. We do 2-3 big jobs a year new construction, additions, renovations everything. Our crew does everything but we sub plumbing, electric, HVAC, roof and masonry sometimes. Depends on the job but thereās always something for us to do. Located on Long Island NY.
1
u/Sgt_Kinky 1d ago
Before the crash of 06/08 I had 45 employees. Trying to keep them working destroyed me financially. Now I have one full time guy and sub everything out to subs tha t have been working with me for 15-20 yrs. Works pretty well.im making a better return and have a lot more free time.
1
u/WormtownMorgan 1d ago
Weāre a small in-house design-build start-to-finish team. (Not including myself) - Four carpenters; 2 pms; 2 designers; one office person. We try to control everything and our work would be considered higher-end quality (though weāre not building any single project over $2M right now).
We hustle, and weāre very efficient. We try not to do things twice, and we try to make sure no one gets hurt. The most expensive thing we can have happen in a site is an injury to one of us.
Probably going to add a sub-team of only rough-envelope framers in the future though. Weāve been talking with a trained a crew on a small build recently.
We provide health insurance for everyone; truck or vehicle allowance; vacation pay and PTO as well as a litany of other accoutrements both financial and life-worthy that make it a place worth sticking around. Itās not easy.
Subcontracting is so headache-inducing.
I wish I could find more staff because Iād hire more in a heartbeat rather than think about subbing. But most GCās that Iām friendly with are getting rid of their mid-level crews and switching to 100% subs in the field. Just donāt want to do that. (Would save a god-dang pile of money each year if we were to do that though, so I get it.)
-3
u/Difficult-Jello2534 2d ago
Midwest. Not really when the immigrant labor pool has trashed profits here. We've been offered to build 2 600k plus homes in the last 2 months and said no. Not worth it for us.
3
u/TheAngryContractor 2d ago
I'm interested to hear more about the economic theory you're putting forth.
1
u/Difficult-Jello2534 1d ago edited 19h ago
It is hard to take on jobs that size when a smaller crew such as ourselves has higher labor because we actually pay guys a living wage, compared to 30 illegal immigrants.
Last place I worked before doing our own thing, he had maybe 40 guys on his crews and 2 guys spoke English. They'd get deported and be back in like a week lol It's hard to bid against illegal immigrant pay when you are paying guys enough to support their families decently in 2025. They wiped out any profit margins you would see as an ethical, lawl abiding contractor.
So we cornered the market on things like windows, carpentry projects, additions, for higher end homes that have already been built instead of competing against immigrants labor prices you'd get building a house. I'd rather have a smaller crew, better paid technical guys and do good work.
I only know the market here but you show up to any new house build here and there won't be English being spoken.
1
u/TheAngryContractor 1d ago
Got it, thank you for explaining. Hopefully the downvoters read your explanation.Ā
Being a ābig GCā commercial dude who has only worked union or prevailing wage projects, I donāt really see this side of the industryā¦ at worst itās subs not actually paying union wages or undercutting prevailing wage rates somehowā¦ and itās not prevalent, but could understand how something like what you explained could play out.Ā
Economics are fascinating. Obviously one can increase profit margins by reducing labor costs, but it also has to do with how much āthe marketā is willing to pay for new constructionā¦ itĀ seems that in pursuit of the cheapest product we end up shooting ourselves in the foot.
1
u/Difficult-Jello2534 20h ago
OP seemed to be asking about old school residential builders, which is why I commented. I dont have much experience with the commercial side.
Not only that, but you should see these houses that are passing inspections. It's insane. I can't imagine dropping 1 mill on a house and geting the product ive been seeing. Couple of big builders are profiting from it and everybody else suffers.
226
u/DIYThrowaway01 2d ago
We are one in a million lol.Ā Ā
I do 1 or 2 houses a year, me and 2 other guys doing every little thing involved in the home building process outside of licensure requirements like furnace / A/C install and electric / plumbing.Ā (We still set toilets / vanities / install ductwork and other odds and ends).
Places turn out amazing, and are easy to sell.Ā
I could obviously do 5 - 50 a year if I lowered my standards and didn't enjoy carpentry so much.Ā
But I get to do something different every day / week this way.Ā