At Bicycle Bungalows, we love new construction / custom home projects. It is much easier to build new from the ground up with new windows and doors, walls that are straight and square and are able to be properly sealed and insulated. Having a new foundation on drilled piers that help minimize seasonal gaps and cracks found on old houses built on pads keeps the callbacks down. To date we have only built one large (over 4000 square feet) new construction house and one small (360 square feet) high end garage apartment. We have done numerous two story additions of 1500-2500 square feet that are more challenging than a standalone new structure.
There are two things that we need to bid and build a new construction home: a lot to build on and construction plans.
Lot: We keep our ears to the ground searching for lots with houses that are candidates for additions and remodels or for demolition and new construction. We value most of the old homes in the Houston Heights and appreciate it when they are restored and brought up to a suitable standard for today’s lifestyles. However there are some homes that are beyond repair or should have never been built.
Plans: We have relationships with several designers and architects that work in the Heights area. We can refer potential clients to them or we can contract with a designer directly and assist with the design work and try to keep the project within the desired budget.
If the house is located within one of the historic districts, our founder, Bill Riley has had extensive experience working with the historic staff within the City of Houston’s planning department. Bill was the builder representative on the advisory committee for the proposed Historic Design Guildelines.
The Process: Once we have a good set of plans including the structural plans, we will work on the bid. There is a lot of work involved in coming up with an accurate estimate of the job costs. We require a full set of ¼”=1’ scale drawings on paper as well as a set on pdf. We send the plans out to our trade partners for their cost estimates as well as being able to do takeoffs ourselves. Right now it is taking several weeks to get prices back from our partners due to the current workload. We provide an estimate showing each line item. This allows our customers to get a better feel for where the money is allocated.
For items that the homeowner will be selecting, we set up allowances. We try to accurately estimate how much the owner will need for these items based on earlier discussions or our experience. At the end of the job, we calculate how much was actually spent on allowance items against the budget and we either credit the final payment amount or issue a change order for the overage.
We use the Texas Association of Builders Fixed Price-Owner Property New Construction Contract for the new construction projects. This contract is frequently updated to reflect the current state laws.
After the contract is signed and the budget is locked in, any changes in the work scope is handled with Change Orders. These are paid by the owners upon commencement of the extra work. This keeps the accounting with the lender much simpler. The majority of change orders are initiated by the owners.
We can assist owners that are getting bank financing with referrals of lenders that we’ve worked with and appeared to be good for the owners.
Draws are sent to the bank and owners no more frequently than twice a month, depending on the cash flow of the project. Draws are based on the work that has been completed at the time of the draw payment. Stated another way, we use our own money to keep the project running and don’t get paid until the work is done. We don’t ask for advances of work to be done. We allow the owners to hold back 10% of the contract amount until substantial completion of the project. One advantage that we have over many other contractors is the financial strength to finish a project if we make a mistake in estimating or have problems with another project. There are numerous stories of owners left with an unfinished home that they’ve paid for due to their builder declaring bankruptcy.
The product: We build homes that we’d be willing to live in 10 years from now when all of the warranties have expired. Bill has a marine engineering degree from a federal academy, an unlimited horsepower chief engineer license issued by the US Coast Guard, but wanted to learn as much as possible about home construction after he left the corporate world. He is one of a handful of builders in the Houston area with a Master Graduate Builder designation. He also has a Certified Green Professional designation and has taken the courses to qualify for the Master Certified Green Professional designation. That said, he has an understanding of building science and how to build comfortable homes in the Houston climate. He utilizes consultants as required to get the best house for the money.
Most of the large project take from six to eight months from when we have the permit until substantial completion when the owners can move in.
Resources: We have developed a lot of great resources and contacts over the years to handle most needs that an owner may have. Partnership: One of our core values at Bicycle Bungalows is to treat others as we wish we were treated. We are fair with our trade partners and do not squeeze them because we realize we need to maintain good relationships so they will be around the next time we need them. We do not gouge our homeowners on pricing and attempt to give them the best product for the money they are spending. We view our relationship as a partnership with each party striving for the same goal.