People are always asking me how much it costs to do a construction project. Often times, it is an offhand question in a typical day-to-day conversation like this: “Hey James, how much do you think it would cost to build a covered patio onto the back of my house?” “Oh man…” I think (and sometimes say out loud), “there are so many answers to that question.” And truly, there are. I mean, it’s not like you can go on Amazon and look up “Covered Patio” and choose one from the thirty options you like, put it in your shopping cart, click the “place your order” button, and have it delivered to your door two days later. Wouldn’t that be nice! 

Truly, however, there are three tiers for any project, be it construction or remodel, commercial or residential. This has become my answer over the many years of walking through this process with clients, friends, family, and other random people who find out I am a contractor and inevitably ask me these types of questions:

The three tiers of project cost are:

1. You call up your architect friend and have them draw up some plans and engineering for you. You submit those to the municipal building safety department, whip together a list of materials, go to Home Depot, Lowes (or your local materials supplier), crack open YouTube (don’t lie, we all do it… even the pros), break out your tool box, and build that sucker yourself on the weekends and evenings with a few friends. You have the inspector out to pass it off (hopefully), and BANG, that is tier one.

2. Tier two is a little different. Tier two is where you (after getting those permits handled) bust out the computer and start looking up those dreaded businesses…Contractors. You put together a list of them to come bid out the project for you. You call framers, roofers, excavators, concrete layers, painters, and electricians. You try your best to grab three bids from each type of trade and pick the best bid from each. You jump through the hoops of ensuring each contractor is licensed, bonded, and insured and you build a schedule, sign the contracts, pay the deposits, and answer one hundred thousand questions during the process as you manage the project yourself. And hey, you just ran that project and got it done.

3. Tier three is simple. You call up the worst of the worst, the scum of the earth, the dreaded “General Contractor” (I am mostly joking). He shows up in his huge diesel truck and he asks you a thousand questions about your project. He then sends you a bid for what you think is an absurd amount of money and a contract that has three times as many pages as there are zeros on the end of his bid. And you sign it…heart pounding…wondering if you will ever recover from this financially, and you write that check for half down as a deposit, and bang! Your project gets done in like seven days when you thought it was going to take you six months to put it together yourself. You pay that final half and again think to yourself, “am I ever going to recover from this?”

Okay, so I am being a little bit tongue-in-cheek here, but I think you get the idea, right? Each of these tiers is more costly than the last. And honestly, tier two costs double what tier one costs. And you guessed it, tier three costs double what tier two costs. Here is the real answer to the question everyone asks: it depends on how much you want to (and can) do yourself. I am the guy in tier three. My company is that dreaded “General Contractor” that you call when you don’t have the time or experience to do tier one or tier two. I am that guy that hands you that crazy long contract and a bid for what you think is an absurdly high number. 

The truth is you get what you pay for. And yes, I know, there are a few shady contractors out there. I have unfortunately had to be the guy who comes in and cleans up a mess from the prior contractor (who screwed over the client and left me in the awkward position of charging them twice as much as the first guy) to get the job done correctly, after the client is already out a huge chunk of money. I have also made my share of mistakes that I had to fix and lose thousands (sometimes tens of thousands) of dollars on just to make things right for my clients.

So why have I written this article? Why does any of this matter? It matters because you (yes YOU) need to understand that there are levels of cost in the world of construction. Everyone needs to understand a little more about how the construction industry works. EVERYTHING in our society revolves around our houses, businesses, churches, roads, and infrastructure. And in my experience, when it comes to construction, cheap usually does not mean good and not all contractors are created equal. 

So, if you go price out a construction or remodel project and you think it should cost 25,000 dollars, it will cost 50,000 dollars if you manage it yourself with trade contractors, and 100,000 dollars if you hire a general contractor to do it. And if you think that is a lot of money, it is. Maybe not to Bill Gates, or the US government, but to us it is. So, choose wisely when you are selecting that contractor. Yes, I think it should be Maguire Projects (because I am completely biased and we take great care of our clients); but seriously, choose carefully and spend the extra money to have your project done right the first time. There is a massive amount of risk associated with construction. This is why general contractors must carry millions of dollars in insurance coverage and hold a 30,000-dollar bond. Invest your money wisely. 

-By James Maguire, President/CEO Maguire Projects and Development LLC

Published July 11, 2024, 11:00 a.m.