Self-contracting can save you lots of money and allow you to get your dream house at a price you can afford, but it may not be right for everyone.

I’ve been getting lots of questions about self-contracting and how it was to be our own General Contractor. Before you start thinking “I could never self-contract a home build,” read this and then decide. It’s definitely not for everybody, but it COULD be for you.

Why we chose to be our own General Contractor (GC):

• To save thousands of dollars. That’s the biggie. I have Champagne taste and a beer budget when it comes to home design. My husband estimates that we saved over $100,000 by self-contracting AKA Owner-building our first home build, even more on our second home build.
• We saved even more by being able to shop sales for our own fixtures and appliances (we also saved sales tax on many items, in addition to not having to pay an up-charge to a builder)
• We also wanted to be able to be in control of the budget and be able to cut back in certain areas and spend more in other areas that are more important to us. Here’s an article about Where to Save and Where to Splurge in your Home Build.
• Sometimes when working with a builder, you have to go along with the limited choices they provide and we did not want that.
• Being our own contractor also allowed us to save money by doing some work ourselves.

Skills & Requirements for self-contracting:

• Time and ability to make phone calls. A lot of the collecting of bids is just making lots of phone calls. Some calls will need to be made/taken during business hours, so you or your spouse, or consultant should be able to make and take calls during the workday.
• You or your spouse will need to visit the site at at least 3 times/week when workers are present, and sometimes after they’ve left for the day or on the weekend.
• Ability to read/understand Floor Plans.
• Ability to keep a budget sheet. I’ll admit, I do not excel at Excel, but my husband does, so it works.
• Organization skills
• Having negotiation skills helps, but it’s not necessary because you’ll be getting multiple bids for each job…and if you join the Bootstrap Builders Program, we’ll give you a script to help you get bids, save money and keep it all organized.
• Knowing how to find and hire subcontractors. In the Bootstrap Builders Guide, we give you 9 ways to find great subs and 12 questions to ask them.
• Asking questions. If you don’t know, ask.
• It is best to have a good credit score if you will need a construction loan.

Construction Loans when self-contracting

Okay, full disclosure: I’m not a money person. My husband handled all the loan stuff and paying of contractors. I know my lane and I stayed in it. I have asked him to tell me about the money part so I can share it here.

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With a construction loan, the money is released as you need it. You don’t take the full amount at the beginning and you don’t pay interest on money you haven’t taken out of the loan amount. You only pay interest on the money you have withdrawn. It’s called a “draw” when you take a portion of the loan.

You can save a bit of money (interest) by having some liquid cash at the beginning of construction.

Let me use a real life example with fake numbers. Say you have a $100,000 loan. Your first contractors that will need to be paid are your dirt work and foundation contractors. Let’s say their bills total $10,000. If you can pay that in cash, you can put off a month of interest on that $10,000.

Once you start taking draws, you will start owing interest on the amount drawn (borrowed) thus far.

The bank will want to see receipts and will likely send out their own inspectors occasionally to make sure you are not paying for work that hasn’t been completed yet. You will also need to show the bank proof of insurance.

How to secure a Construction Loan without a General Contractor

We have put together a Construction Loan Boot Camp for those who want to know how to get a construction loan WITHOUT a licensed contractor. It will teach you everything you need to know and provide a list of banks who are known to loan to owner-builders without a GC on record. Click HERE for more info:

Work we did ourselves to save even more money

I wanted a lot of “extra” trim like wood plank V-groove ceilings, panel moulding, shiplap and board and batten. To offset the cost of the extra materials, we did the trim out labor on these areas ourselves. We did hire a trim carpenter to do the door and window casings, and baseboards.

We already had most of the tools we needed and a some basic knowledge of how to do it. What we didn’t know, we learned on YouTube.

We also did some of the tiling ourselves, however we left the shower tiling and big heavy tiles to the professionals. All of the floor that looks like brick we did ourselves…herringbone too! We also tiled my daughter’s bathroom floor in penny tile (12″x12″ sheets), and did our subway tile backsplash in the kitchen.

Another job we took on ourselves was to lay the LVP flooring we used upstairs. It was pretty quick considering how much area we had to cover. The hardest part is fitting and cutting around doors. We also did the shoe mold (quarter-round piece of trim that often is added to the bottom of the baseboard) upstairs ourselves. The trim carpenter did it downstairs, though.

Lastly, we did the trim out on our stairs. This job is tedious. There are a lot of codes and regulations about stairs and railings. This is a job for an experienced detail-oriented person. I would say that whatever the trim carpenter charges for this job, it’s worth it. That said, we were able to get it done ourselves properly. The codes can be found with a google search but you need to know what you’re looking for and know some specific terminology. My experience designing stairs as a home designer definitely helped.

If you decide self-contracting your home build may be for you, or want more info:

We have a few articles and resources to help you have a successful home build.

All articles in our self-contracting library

We will soon be releasing our Bootstrap Builders Guide and program which includes:

• SO many useful checklists
• a detailed timeline of the home building construction phases
• a construction terms and abbreviations glossary
• access to our Forms & Templates Library
• best practices
• an organized reference for all of your material selections
• budgeting spreadsheet
• Countless tips and info to save you time, money, and stress

You can do this