Develop a budget to complete the repair and seek approval for this budget.
Counting the costs
When the construction manager has explored the real estate, we can figure out how much money we’re going to spend. For example, there’s a category in Buildertrend for:
- Acquisition costs
- Carrying costs
- Material costs
- Labor costs
- Disposition costs
- Internal rate of return (IRR)
- Financing costs (if applicable)
The construction manager goes through this list, making choices based on what’s that you’ve done before. The key here is to predetermine and itemize everything you’re going to do and buy. You don’t want to forget anything, because you’ll have to pay for it—literally!—at some point in the project.
If you can afford it, use Buildertrend. If you’re on the front end of your business, you could use a spreadsheet for these things—but this generally takes more time because you’ll have to design the spreadsheet yourself. I highly recommend using a software like Buildertrend for this part of your job. It’s well worth the investment—if you’re in this for the long haul!
Budgeting by bidding with subcontractors
When looking for subcontractors, generate a bid for the work. (We don’t do some niche items like plumbing and roofing, for example—we outsource that.) We have a vendor list within Buildertrend and we tap into that. Since for every new job the foreman puts in repairs and cost estimates, we know what subcontractors we will need.
So the construction manager creates a scope of work (e.g., a full roof replacement), and that order is pushed electronically to the entire vendor list! Automatically. They open that email and submit an electronic bid. Once we check to see if the bids are within our budget, we select a vendor. (Buildertrend has a system that incorporates signatures and payments to vendors.)