Justifying GC costs for smaller development (TDC ~4M)...How do you make it feasible?
When does it make sense to get a GC on board for a project? How does a smaller-sized firm justify the costs of a GC? I am assuming most builders don't have in-house GC capabilities, and therefore, need to sub this out. My question is how much should I budget for GC costs for a project with a TDC of 3-4 million? Does hiring a GC even make sense or does this deplete the entire profit margin? How do you account for this on your projects/what do you typically budget for your GC?
What is the best formula to use with a GC? GMP? Cost plus etc.?
5% of hard costs for overhead and profit is pretty typical, but depends on contractor (this is for larger scale projects, can't speak to smaller scale).
You need a contractors license so unless someone on your team has that, you’ll be hiring a GC. If you have some conceptual drawings you can certainly have conversations with GC’s about pricing and can ask what their fee structure is. Like the above poster said, fee is typically a % of total contract value they’ll also have overhead costs (general conditions) within the budget to pay their overhead.
If you're in anything that may consist of a metro area you'll need a GC license just to get permitting. No GC is gonna bite on 5% on such a small job, probably gonna be at least 10% or have a lot of fat in the bid to deal with.
Honestly if you're asking these questions, I'd see if you could hire a CM/Consultant just to make it through. You'll probably get bodied if you haven't done this before and it's money well spent in your shoes.
Dolorum ipsam debitis rerum quia dicta. Id expedita dolorem optio necessitatibus vel. Quia maxime et perferendis iusto quae quisquam et. Sequi et commodi voluptatum est perspiciatis aut omnis. Ab adipisci necessitatibus quas provident facere non. Dolores dolorum qui esse esse impedit tempora. Nam quasi facere praesentium aut ut et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...