Builder - December 2008 - (Page 63) ANOTHER REVENUE STREAM: T.W. Lewis’ COO, Kevin Egan, sees remodeling as an extension of this custom builder’s trade-up program, where it purchases buyers’ homes, remodels, and then resells them. homes and renovates them for resale. The builder has purchased and resold 35 houses, in which it has made mostly cosmetic improvements such as replacing carpeting or lighting fi xtures. On the basis of that fi rst whole-house renovation job, Egan thought it would be relatively easy to attract more remodeling work. But as of mid-October, T.W. Lewis had captured only three other projects, ranging from $25,000 to $100,000 in scope. “The challenge is the economy,” Egan says. “People are hesitating to spend more money on their homes, and it’s going to take some time to develop this business.” HAVE LABOR, WILL TRAVEL Diamante Custom Homes has built both residential and commercial projects for years but limited its services to customers within 30 minutes of its San Antonio headquarters. In early 2007, a client asked the builder if it would renovate a bus terminal in Eagle Pass, 150 miles away on the border of Texas and Mexico. Adam Sanchez, Diamante’s owner, took on this $300,000 project, but only after he was sure he’d have sufficient labor to complete it. “What surprised us was that our subs were willing to go down there,” says Sanchez. With the approval of its client, Diamante paid its subs a trip fee of $75 to $100 per day, or a per diem for meals and lodging. Labor hasn’t been a problem for other builders who say they are using their residential contractors for most of the remodeling and some of the commercial work they take on. Coleman notes, though, that he’s had to broaden his trade base because some remodeling projects are too small for his home building subs. And Dashiell says her subs have learned to make concessions about what they charge if they want work, because “margins on renovation jobs are generally lower” than on home building. To maintain respectable margins, Sanchez says his company, when bidding for nonresidential or remodeling work, stays wes johnson W W W.BUILDERONLINE.COM de c e m ber 2 0 08 BUILDER ■ 63 http://WWW.BUILDERONLINE.COM
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