New construction is where most of all roofing contractors start out. It is in essence the bottom of the ladder in the roofing industry. The roofing group does not provide any service to this area whatsoever. It is still considered a rat race, because of its terms and conditions. Over the past 50 years in North America, new construction has consisted of three main principle elements to its cause, as seen below.
#1) A single home owner building his or her home or a couple getting into their first or second home, by way of purchasing a lot in a newly developed subdivision.
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#2) A new construction single residential builder looking for the lowest possible bidder to furnish all materials and labor, and expects it's sub-trades to wait weeks to possibly months for payment.
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#3) A volume builder or general contractor that has many new construction homes, and multi-family strata complexes on the go, and requires the efforts of many companies, and individuals to sustain its environment.
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The problem with working for client #1 is that they may not have much experience in building a new house, and what happens here, is that if it's a husband and wife team, then the one that wears the pants is whom you have to work with. This client may have already gone all out on their kitty, which means they could have possibly spent 7K more on kitchen cabinets alone? That's of course 7K more over the actual costs of average kitchen cabinets? If they do this with all their personal favorites, then the kitty starts to shrink. What happens here is that there's not much money left over for other trades in the building and the finishing of the home?
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The issue with working for client #2 is that some and or most single new construction builders are very crafty in nature. They play dumb, but are very smart in what they do. They are experts in grinding a trades-person down to a point where the tradesman is thinking of not doing the job in the first place, but then they will persuade that same tradesman to actually do the job. If a builder smiles and puts his arm around you, it can only mean one thing; You're a lousy businessman, and that's it.
Most successful builders use the same people over and over again and again, because they meet their terms and conditions. They don't want to hire high-end tradesmen that cost them money, because that would take from their profit margins on a job. The more money a builder can shave from a tradesman, the more money he has in his own kitty at the end of the completion of the home, or building. Also one has to remember, the builder isn't going to live in the finished product anyway, so he's not too concerned either way. If he gets a call from the new home warranty people years later, he will just point towards whatever tradesman did the job, and walk away from any negligence towards his own company.
Whether the tradesman is in the carpet business or the window & siding industry, the builder knows within pennies of what that trades-persons exact material costs are. Most single new construction residential builders are actually multi-millionaires. They walk away from any and all responsibilities when it comes to court cases, and liabilities in the aftermath of faulty or poor workmanship. They are clever geniuses at finger pointing. Many are actual pathological liars, which means they actually believe that their own lies have truth to them.
The biggest problem for the roofing group is that we could come out to a new construction site, and spend a few hours looking over plans etc., and it's all for free, because a builder isn't going to pay for your lost time on that. The builder requires tradespeople to come out onsite, do inspection work, give consulting tips, and do the total job with absolutely nothing down. No draw. No money for pre-inspection work. No money for consulting. No upfront money for materials or labor. The funny thing with builders is that if it's a steep or cut up ugly job, they don't feel like they should have to pay more for any extras for that? For the roofing company, we feel like we really, and simply just cant honestly afford to work for new construction builders anymore, and have decided to completely Blackball them for any service in the future.
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The issue with working for client #3 is a big one. A new construction general contractor that works on a volume only structure is the toughest client to deal with. They can consist of multiple X-single new construction builders that have all joined together to form a trade name under a numbered company. When you work for them; You have to sometimes wait months and months for payment. They are ultimately the ones responsible for building the leaky condo crises in the 90's. To work for them as a trades-person, you have to have the financial ability to furnish labor, and materials in the amounts of astronomical costs with absolutely no financial draws up front? They have been known for taking a single small tradesman of 20+ years in business and sending him straight to the streets as a homeless person.
Their overall track record can be devastating for a community or a small trades-person. There are tradesmen that are doing well or have made great profits for working for them, but we've always said, when you strike a deal with the devil, he is ultimately setting you up down the road for something? In other words when he uses and pays your business, he will expect you to be there unconditionally the next time he needs you, and at that particular time you may be doing a large job for free one day. It's true. It happens.
The only people that make money from new construction is the land developer, architects, realtors, and of course the builders, and they are all buddies on the golf course, or at their local Church's. It's a 50 year old system that has never really had any policing to it to date.
If you have the ability to buy a lot somewhere, and need to build a new home; We suggest to look for framers, and hire them directly by contract or by the hour, and you will save tens of thousands. One of the principle owners of the roofing group had a sundeck built on his first home, and had hired a framer who lived close by. He saved a small fortune, because had he hired a builder, the builder would have just taken a large lump sum right off the top, and just hired a framer to do the job in the first place. Technically you don't need builders for nothing. Also with the savings, you the initial home-owner can hire a progress inspector with the money you will save not engaging a contract with a builder. This will give you peace of mind that your dollars are being well spent, and the people you do hire will be somewhat supervised.
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