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CHANGE ORDERS Podcast

Introduction: the one constant in construction is that the projects will change! Accepting this reality will help us build better experiences with each project.

Change orders help us keep projects on track and that projects are completed successfully. The value of a change order is that all stakeholders have a say in the cost, scope, and time that will be adjusted. It allows all parties associated with being on board with the changes.

Story:

1. Customer X. and his 170k dollar change order that we have fought for six months to get approved and finalized.
   1. Details were not clear or documented in the system
   2. The customer remembered things differently from the trades, which put the builder and trade in a battle.
   3. The customer wanted to negotiate each line item 6-12 months after the work was completed, which resulted in concessions by trades, builders, and customers.
2. Base contract and selections
   1. Create your baseline contract
   2. Build out your specifications for each portion of the build
   3. Estimate and price out each option as accurately as possible
3. Changes to your scope of work (scope, cost, time, etc.)
   1. First, work will only be completed with a written and signed change request.
   2. Changes can come from site conditions, material shortages, a change in design, the client finding something on Pinterest, etc.
   3. When you agree to the change, consider all impacts on the project. Procurement? Labor? Time? Ensure the customer is made aware of each point when they agree to sign the change request
4. Change orders must be managed to ensure success
   1. Ensure we have a change order process or playbook
   2. Do all internal and external parties understand the playbook?
   3. Has the change order process been communicated to the customer? I would go as far as to create a specification or addendum to your contract to specify a change order process.
   4. The lack of a change order process WILL create animosity, confusion, and a spoiled reputation for all involved, and it is all avoidable.

Conclusion:

Change Orders are essential to all projects.

Communicate the change order process up front and reiterate it to each trade you bring on and each internal team member.

#homebuilder #construction #coaching #changeorders #documentation #contracts #process #personaldevelopment

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Carolyn can be found on LinkedIn at:
https://www.linkedin.com/in/carolyn-mcmahon-937b89158
Joshua can be found on LinkedIn at:
www.linkedin.com/in/joshuamcmahon15
Email for feedback, questions, complaints, etc:
[email protected]
Daily Journal: https://amzn.to/41p9aKE

We appreciate any and all feedback so feel free to send a text.

Construction Challenges Podcast:

Introduction: Managing construction projects have never been more challenging than they are today.

We struggle to manage projects for numerous reasons, and in todays episode, we intend to list five reasons and have some dialogue around each.

1. The complexity between projects: multiple phases and tasks must be completed sequentially. Each task can be affected by the following:
   1. Labor shortage
   2. Weather
   3. Resources
   4. Quality
2. Dependency between tasks. Activities are dependent on other tasks, and if one item is not completed on time, it will have an impact on the activities that follow.
3. Resource Allocation: projects require the coordination of various resources
   1. Materials
   2. Labor
   3. Equipment
   4. Time
4. Communication and Collaboration:
   1. Communication between tasks and owners.
   2. How well do we communicate between trades?
   3. How far in advance do we schedule activities, and are we confirming that the schedule is accurate and the job is ready?
5. Unforeseen Issues: You will always encounter unexpected issues. It is the nature of the business, and you should anticipate them and be ready to pivot and make new decisions. I suggest having your Plan B ready if you need to deploy it.
   1. Pre-Construction delays
   2. A need to ask for more information delays the project
   3. A need to bring in an engineer to approve something done in the field to the drawings.

Vendor of the week: Foster Heating & Air

Conclusion: To overcome the challenges you will face on projects, you must have several tools and techniques ready. Project management software, Critical Path Analysis, and Contingency Planning to name a few. Effective project management will require cooperation between all stakeholders, and you must be agile enough to make changes when things don’t work. If you remain rigid in the face of adversity, your business might survive, but it is at the expense of your people.
#construction #homebuilder #customhomebuilder #projectmanagement #superintendent #success #personaldevelopment

Support the show

Carolyn can be found on LinkedIn at:
https://www.linkedin.com/in/carolyn-mcmahon-937b89158
Joshua can be found on LinkedIn at:
www.linkedin.com/in/joshuamcmahon15
Email for feedback, questions, complaints, etc:
[email protected]
Daily Journal: https://amzn.to/41p9aKE

We appreciate any and all feedback so feel free to send a text.

Walking Projects - Podcast

Introduction: Each time we walk a project in construction, we need to focus on quality.

The job superintendent walks their projects at least once daily, if not twice. What is the intention of our walk? What are we looking for, if anything?

How often does the sales agent walk homes under construction?

How often does management walk homes under construction?

What do people outside the superintendent do when they walk homes?

Story:

1. Tornado Manager: AKA The Baker. The manager would come to the job site, walk a few jobs, raise hell with everyone, and disrupt anything he touched.
   1. He intended to ensure everyone knew he was in charge.
   2. The employees were all scared of him and called each other to warn him if he was in the neighborhood or heading that way.
   3. The team would only raise concerns or opportunities for improvement if they were confident of what he would say or how he would treat them.
2. Coaching Manager: A manager that listens to your struggles and opportunities and helps guide you toward a good solution for the project.
   1. Not interested in the spotlight
   2. Willing to support you and create a culture where vulnerability is accepted
   3. Support encourages and holds the team accountable.
3. Sales Team: In most cases, our sales team knows more about the selections in each home than anyone else.
   1. Walk the home to help and expose items that might be incorrect for the home.
   2. Take good pictures while walking the home and add them to the weekly buyer update.
   3. The superintendent often carries more houses and stress than they should. Help them build the home you sold, so the customer is happy.
4. Design Team: The designers know the selections better than anyone in the business.
   1. Walk homes to see how everything comes together.
   2. Be comfortable making changes to your program if the product doesn’t meet your expectations.
   3. Our customers deserve the product they are purchasing, and your eye for detail is critical for the superintendents in the field to turn over a quality product.

Conclusion:

We are all on the same team to deliver a quality home or project to our consumers. Each person on the team should walk homes with an eye for quality and help one another reach a new level of quality with each walk we perform.
#constructionpodcast #podcast #construction #homebuilder #projectmanager #superintendent #personaldevelopment #professionaldevelopment

Support the show

Carolyn can be found on LinkedIn at:
https://www.linkedin.com/in/carolyn-mcmahon-937b89158
Joshua can be found on LinkedIn at:
www.linkedin.com/in/joshuamcmahon15
Email for feedback, questions, complaints, etc:
[email protected]
Daily Journal: https://amzn.to/41p9aKE

We appreciate any and all feedback so feel free to send a text.

We wanted to share the process of buying land, securing a construction loan, and some of our lessons learned thus far.
The process is not for the faint of heart! We are into the selections and sending our plans out for bids while working the banking numbers behind the scenes.
1. Finding land
2. Making offers on land and being beaten out
3. Making an offer and going through the counteroffer process
4. Being under contract on land
5. Working with a bank to purchase the land, construction loan, and conventional loan
6. Sending our drawings and specifications out for bid
7. Trying not to stress out about the costs of each estimate
#construction #customhomebuilder #homebuilder #process #success #goals #dreambuilder

Support the show

Carolyn can be found on LinkedIn at:
https://www.linkedin.com/in/carolyn-mcmahon-937b89158
Joshua can be found on LinkedIn at:
www.linkedin.com/in/joshuamcmahon15
Email for feedback, questions, complaints, etc:
[email protected]
Daily Journal: https://amzn.to/41p9aKE

We appreciate any and all feedback so feel free to send a text.

Jason Robb, with Blue Ridge Bank, joins us for a second round to discuss vertical home building and financing.
Have you ever wondered how home builders finance the communities and homes they are building? I know that I have, and Jason can break down misconceptions, draw schedules, interest rates, and other discussion points around homebuilder financing.

Here are some of the questions we press Jason with to understand better the banker's involvement in financing our new home construction. Understanding this discussion will help you get a high-level view of how builders operate if you are in the home building industry, trade, or builder.

1. Do the bankers requesting more documents from the builder know what they are looking at? Are the documents necessary or just a way to weed out unnecessary work?
2. What can we expect with interest rates in 2023? How worried should we be as an industry and as consumers?
3. When it comes to a builder's line of credit, what are the most significant factors that help the bank decide to loan or not?
4. How is the money typically dispersed? Are there any specific bank draw schedules that all banks follow? How often can we take a draw? How long will it take from an inspection until the money hits the builder's bank account?
5. How does a bank determine how much money can be borrowed against a property? Does having a signed, non-contingent contract make a difference?

The bank has a critical role in new home construction, and bankers are just as much a part of the team as the electrician pulling the wire. We all need one another to build and deliver homes for consumers, and understanding more about each other, will help us all grow.

Support the show

Carolyn can be found on LinkedIn at:
https://www.linkedin.com/in/carolyn-mcmahon-937b89158
Joshua can be found on LinkedIn at:
www.linkedin.com/in/joshuamcmahon15
Email for feedback, questions, complaints, etc:
[email protected]
Daily Journal: https://amzn.to/41p9aKE