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so you want to know how to estimate construction projects as a general contractor well in this video I break it all down I'll show you my internal spreadsheet that I built from scratch and I've estimated millions of dollars worth of construction projects with I'll show you the tips the tricks and the general contractor secret all in this video coming up stay tuned by the way the link for this spreadsheet in the description let me start with this a general contractor does not sit there and take off every single take off means account the material that is needed for the project so he doesn't take off every single linear foot of electric wire every single CPVC cap that's needed every single plumbing line and everything like that his goal is to make sure the entire project comes together and he sees the entire package what's needed to go into that package and who he needs to call to make that project a success so the main goal of the general contractors put this package together right well the secret to being a good general contractor is to understand construction you must understand the specific needs for every single project every single project is different you must understand who to call for the fire sprinklers the plumbing the plumbing the mechanical electrical the everything that goes into building the foundations everything that goes into building the walls the roof everything that that may change with different structure types with different occupancy class codes and just everything is so vast and I think that is the biggest challenge of being a general contractor is to really understand how much as this stuff can change and what if this job needs some special Vitalik piping that you didn't even know you needed but one of your plumbers caught it when he was bidding the job and it's your responsibility if you don't catch it as a general contractor or if you don't have reliable subcontractors it's your responsibility to cover those costs so estimating is a huge thing good general contractor gets two to three sub contractor bids per trade per division I'll get to the divisions in a second when we get on the computer but the point is on trades like especially the mechanical electrical plumbing the division nine which is your finishes at least two bids are necessary to go and price and you and you qualify you qualify the bids that you get based on the construction drawings the current building codes and what if this plumber picked up the stainless steel piping and this plumber didn't have it well there might be a price difference there but then you can call this plumber and say you know you're good you've got my back and this kind of thing and it really comes down to quality relationships with your subcontractors and your vendors the biggest goal of putting together an estimate is making sure you don't have any holes within your division so you have all these divisions right and if you have a gap this part of your bid is naked so you don't want to go in with a naked bid where your swagging something they say where you kind of just popping a general contractor's estimate at that and that's where it comes down to the trade contractor to really dig into each linear foot of wire and each hour per worker it's not necessarily the general contractors responsibility unless the general contractor has in-house employees doing the actual work like trades people installing the drywall installing the metal studs whatever it may be in my case I don't as of yet I used to but I don't as of yet or at this time at least have in-house employees other than management I have probably a crew of seven people or so that our project managers superintendents people that answer the phone but long story short I'm speaking from the viewpoint of a general contractor that doesn't have in-house employees to do the work so here's the secret you have to understand construction that's the secret if you want to be a general contractor you have to know how to put the project together and who to call there's also a thing about hard costs versus the intangibles what if you need a dust wall what if you need safety fencing most of the time you do need safety fencing but what if the project is phased what if the project is really far away so you need to have per diem and travel in hotels you know kind of like expense put in there the phasing project we're doing an animal clinic right now and we're renovating well they're staying open extremely complex we had to move the x-ray machine over we spent like 2,500 bucks or more like just moving the x-ray machine disassembly like the very day they're getting back into business and their whole surgery center and the surgery light and all the electrical everything kind of needed to be put together into a package in it but it's phased so it's much more complex so how do you account for that in your estimate well that's a little bit nebulous and it's it's up to you how much you might want to charge extra of how much you think your project management team is really gonna spend extra on the project okay so now you know that she can't have any holes in your bid you got to get a couple subcontractor bids you have to have reliable relationships with those subcontractors so they work with you and give you good bids and you give them the job when you get the job and there's a relationship building activities happening to where you have a good solid team of subcontractors and vendors it's like I can't stress enough how much you you need to understand the entire package of construction once you do I feel that you can first be a general contractor but estimate a project as a general contractor now part 2 of this video is this internal spreadsheet that I use I've been using this had bid millions of dollars worth of construction projects using this very spreadsheet I built this myself again link in the description if you want to download this keep in mind it is a small fee to download it but keep in mind that I'm spending like hundred to two hundred dollars every single video I upload to youtube and I'm making barely any money on YouTube as of yet because it's a small channel but I hope this channel will grow so if you'd like to support this channel it would be really really helpful if you download this spreadsheet just know it goes to much more videos on this YouTube channel about general contracting entrepreneurship and mindset okay let's jump in let me just clarify one thing I get my sub contractor bids whether I use the bids portion and builder trend and they send it straight to the system or if they email it to me and I have it in Google Drive with the shared the whole company Google Drive folder I'll make a folder under the project I'm estimating and I will put all the subcontractor bids within that and I'll change the file name to their company name or whatever they bid - the dollar amount so I can go see the entire list of files and consider dollar amounts for what they did you might be a little bit surprised about this video like Jess I thought you're gonna show me how to like figure out how many two-by-fours I need to take off the length of the wall or something like that and that is important I want to clarify that you need to make sure your electrician I mean you need to go and count all the outlets and you you need to make sure that he's got the LED lighting and that's your job is to qualify your subcontractors so your job is to qualify which means make sure that they've accounted for all of the outlets make sure they've they saw on the plans that there's an extra bathroom going in so they've been in the trench and rough and who has the trenching well the plumber doesn't so you need to give the concrete guy maybe your superintendent will do it but who's gonna fill the trenching batch back in and who's gonna do the termite spray so I think that's my point and that's the secret to this video really is understand construction but it's qualify the subcontractor bids based off the construction documents which is your drawings your specifications and current code and what needs to happen for the project to be complete okay so you can see I have general conditions which is division one I have site work concrete masonry metals wood and plastics thermal moisture moisture doors and windows finishes which is division I this is always a big one specialties equipment fire suppression and I have plumbing HVAC and electrical here at the bottom and these are always big ones now you see I have column a and this is yellow right so the yellow portion of this is the number that makes it into my proposal or my bid to the client okay so this number is going to pull if I double click that you can see there's a formula pulls from the total now there's quantity unit unit cost and subtotal and what this is say permanent because I know the local jurisdiction the local city typically charges time or something going down to the city or just add a little bit of padding it's this column and this is for any of these portions of work now obviously you can't sit here and go crazy with this you can't sit here and mark this up some crazy amount because you're never gonna get the job but let's just say you know I want to throw 3% you click 3 you click enter you're done so what this does is 5150 is the amount shown on this yellow portion here and that's how all of these sections all of these divisions work okay so what general conditions is this is not overhead general conditions is things like permitting dumpsters mobile offices temporary toilets maybe some bonding equipment rental job site storage safety requirements job utilities general liability whatever you need project cleanup superintendent and project manager are your biggest general conditions now in permitting and typically I like to have the impact fees if any or tap fees by the owner so I'll have the owner supply or pass-through or sometimes I'll just have hey you reimburse me for the tap fees I'm tapping into the sewer or whatever it may be or impact fees if you're doing like a ground up by a road or whatever maybe they you're impacting the you know trip whatever so that's a video for another time testing and survey work it's a lot of intangibles that isn't really per a division but it's Division one it's so it is a division but it's not like a trade it's kind of general conditions that go into a project that's why they call it journal conditions okay let's come back to general conditions now stick with me here and again this this spreadsheet is available in the link below and you'll be really supporting this channel all I'm gonna do is put your credit card in download the file open it up in Excel and you're rockin and rollin and you can use this now don't you don't necessarily need to put you could present this to the client but you probably want to take off the markup percentage because down here at the bottom which I'm about to get to is really where you want to mark it up this is just in case you need a little bit of pattern let me explain this the reason for the markup percentage is not so you can just make all kinds of extra money it's because I mean it helps but you're responsible say if the plumber missed the thing or say them HVAC guys like I didn't see those extra seven returns in those rooms or whatever it may be if you're uncomfortable at all with the subcontractor or with the set of plans and you're really not sure just quite or you just want maybe 5% of padding in there this is where you put it because you're giving a price to the owner in my new version actually don't have these zeros here so I'm just gonna take this out real fast so let's take demolition for example and by the way you always want to put a 1 in this quantity sell if you don't put one there this formula won't work ok so let's say our demolition subcontractor gave us a price for thirty five hundred bucks for this job this is the u-tube job so we're building we're building an office for the YouTube headquarters to say and our make-believe world here so one at thirty five hundred bucks but you know what I'm just a little bit unsure so I'm gonna put five percent five and enter so the price I'm giving on a markup the price I'm giving that's a padding as well to the owner giving you a price to the owner for thirty six seventy five and you can see your 3675 on the yellow the main per division which this old backups a concrete cutting you have one that you want to use and you have forty five hundred bucks but you're not gonna put in a markup on that you're good to go you can see the numbers are adding up 81-75 is the price to the owner so you're responsible to get all the demolition done for 3675 but you'll try to buy it out when you buy the demolition from your subcontractor for 3500 bucks if you can so you'd actually make an extra you know $175 towards your bottom line or maybe that would go towards your overhead which seems like most things these days do go towards your overhead but you'll get there trust me it's worth it so you get the idea of how this works so there's site workers division - I put demolition here you can put it wherever you want but there's you know fire risers underground utility pavers fencing dewatering if you need that you know this is just stuff that I just have in the template which you can edit and change and add things now why do I have the word concrete written three times well maybe you want to get three bids so let's say I just put a concrete guy number one two and three so let's say you have a couple different bids for the concrete package for this foundation whatever let's just say it's twenty thousand bucks right one guy comes in at twenty grand one guy comes in at thirty two thousand and one guy comes in at twenty five thousand so this is bidding as a general contractor you looking at the exclusions and the exclusions saying what's included and what's not included in this bid and you're comparing that between this guy this guy and this guy you know to see who's got what and maybe the one guy caught the extra number five rebar that needed to go in further stairs or whatever it may be and so you're saying oh well did these other guys get it no they didn't see it no I didn't say it either well and my estimating department didn't see it either because you know we're trying to get the whole package put together we missed that one little detail well because you got good coverage this guy got it he's probably gonna get the job but let's say he's you know this $25,000 guy well maybe you can negotiate with the $25,000 guide because he saved your butt and you liked him but this $20,000 guy really didn't get it all the $32,000 guys just high yeah not on drugs but just with his money number okay so you want to go with a $25,000 guy and you might be able to buy him out a little bit lower maybe you get it for twenty three five or twenty three seven fifty because after you get the job you need to go she ate so what you want to do is put a 1 by the concrete guy number three for 25 thousand bucks so now what you've done for concrete you're giving the owner price for twenty five thousand dollars for example on division number three let's say there's no other concrete work to be done and just call it call it good you might want to cover some four if you have to do plumbing trenching or something like that but let's just say good to go twenty five thousand bucks this is the price going to the owner because here the highlighted yellow number is what I call it okay so you get the point you want to go through here metals and masonry and wooden plastics and this is where you want to do like your trim and your millwork and stuff like that you know your mill works probably probably gonna be fifty thousand bucks like I said it's one of there's a lot for us doing these jobs and roofing and installation and you might want to do some thermal moisture maybe there's roofing installation efis material whatever it may be doors and windows storefront windows glass doors and hardware you can go ahead and don't forget put a one like that buy all the ones that you want to use so you know this is a dollar and that's two dollars and you know I'm just kidding but that's what you want to do to plug these things in and see here my price to the owner is three bucks but let's say you know what I want to put twenty two percent on this two bucks well now my price the owner is 344 you get the point I won't dry this out finishes is where all your framing drywall acoustical ceiling tile painting FRP all your flooring your epoxy your carpet your LBT whatever your wall tile anything that's a finish to the job not mep trim which is mechanical electrical plumbing all that stuff is going to go here at the bottom under division twenty two twenty three twenty six plumbing HVAC electrical and of course your fire suppression going back up here your specialties is like bathroom accessories partitions we always bid this out and it's always really got enough fifteen hundred bucks or something like that so and you might you know sometimes I'll put like just put a little bit on there make yourself 45 bucks I mean honestly it's such a small amount so let's make 195 how about that so same thing here with the plumbing I like to get two other two get one two or three bids it depends if it's a super basic job and I have a subcontractor that I work with all the time I'll just get one plumbing price or whatever you know it's not like it's gonna crush you on a smaller project but when you start getting into one hundred two hundred five hundred thousand dollars and up you probably you definitely want to get two or three bits per trade so you go ahead and do the same thing your plumber came in at thirty thousand bucks you're using that number good to go your HVAC guy you just list your bids here you guys outfit you got that bit I got that bid and you go and you just you pick one that you want to use such number you're going in with your bid if you need to add a little percentage on it you're good to go there's all just funny examples but here's where the magic happens and look total project price big yellow number this is the price that you're gonna present to the owner let me explain what I've done here with this spreadsheet and I hope you download this spreadsheet because it really would help this channel out so I can pay my editor and pay the overhead and pay always tight of time I spend coming up with ideas and I love you guys seriously this is so much fun it's I've always wanted to be a youtuber now I finally found a niche that I enjoy so thanks for watching and leave a comment down below if you're enjoying this so far the comments and the likes and subscribes at all it's annoying for me to ask I know but you know it helps the channel so much it helps a channel grow total project direct costs this is all of these numbers boom put right here so you can see hard cost on the job that's what it is this is total price so there's difference between cost and price when you're estimating the cost is what the sub in the vendors come in at the price is after your markup okay so that's what you present to the owner because the general contractor is entitled to the fair profit total project direct cost and then overhead and the GC feet or your markup you can play with this right you can make it 15 you can make it whatever you want and you can see how that number is going from one hundred forty two hundred thirty-eight what if we put twenty two on there 146 so let's just put fifteen got fifteen percent and this is you know a flexible number you can plug in anything you like there but if you click this you can see what this is is a formula for this is showing you what that amount is so that is 15 percent of your hundred twenty thousand okay so big huge deal here that's 15 percent of your price but how much are you actually making in margin not markup okay if you understand this you won't fail as in being in business as a general contractor eighteen thousand is fifteen percent of a hundred twenty thousand but what's this thirteen percent that's our margin the margin is the actual percentage that eighteen thousand is of your project price because your project price is more than your project costs because you've added fifteen percent to it but once you have the fifty percent to it that's your total project price and then this spreadsheet calculates automatically what your margin percentage actually is so that is fancy and you can see these are my KPIs key performance indicators here at the bottom I feel like the mic needs to be over here for some reason cuz I'm talking this direction so 13 percent is overhead and profit amount so in order for me to give you the full picture of how these KPIs work at the bottom of the spreadsheet I need to add project management and superintendent so let's say this is a 16 week project okay so you you need these guys to be here 16 weeks your superintendent let's just say just guessing 1250 throwing a number out here to figure this out for your company take what you're paying your superintendent per year at about 30 to 35% to it for workers comp taxes vitae fika food Suda all the stuff you know what I'm talking about for a business owner and burden how much is this guy that's what they call it the labor burden the employee burden and you know you give it you are you contributing to his 401k are you giving the guy per diem or different things that you know whatever it may be bonuses and benefits so just put thirty to forty percent so thirty five percent on top of his salary divided by 52 and that's his cost per week so then just put a ballpark in you so let's say 750 is a ballpark for project management but I'm just ballparking here to give an example but the project manager isn't going to be on just this one project the project manager is in your office my office running three or four different projects at the same time and he's not just all the time focused on this so I might even drop this down to like you know call it twelve okay so twelve weeks and twin sixteen weeks for the superintendent okay and then that gives me kind of this total cost here of twenty nine thousand extra dollars for project manager superintendent now here's the good part this is where it gets a juicy look at that this bottom dollar this bottom dollar is gonna go towards gross profit which is your overhead and your net profit your superintendent and your project manager those three things it's helpful for me to look at this bottom dollar and see how much I'm I have in there for project managers superintendent which are fixed salaries I have to pay no matter if I get the job or not I stole to pay those things and this is just the way I think about it but it's here if you want to see it project manager superintendent gross profit so my gross profit is my overhead and by net profit in there so gross profit has overhead commingled in it before you man you have net profit you're getting rid of that overhead then you have net profits but if you add overhead to your net profit when you're talking about it what's that called you guessed it gross profit so this shows you gross profit plus the superintended plus the project manager okay and that's 30% of the project now working starts from the top rope faster then this video is about done so this top gray box is your overhead and profit amount but there's one thing you want to look at division markup amounts remember we put 15% here 13% here stuff like that anytime you make a division I made it to where this goes here so you can see what we've done this point is 0.32 percent of your divisions is through division markup amounts now because that's profit for you if you can buy the subcontractor at say 3,500 for demo but you put a little bit of percentage on there so 5% whatever it was that 5% hopefully should be going towards your gross profit which is net profit overhead combined that's gross profit now twenty two thousand nine hundred forty nine dollars and 42 cents is your gross profit that's the total overhead and the mark-up amount and the overhead it's all figured in here so it kind of boils down and you got to buy the spreadsheet to find out these formulas I'm not just going to show you and so so I hope you do buy the spreadsheet this bottom number is everything above that plus the project manager and the superintendent I hope you enjoyed this video I as a general contractor of you know been in the business for about six years doing this for my company Jay Lane construction and you know I figured out certain things and I have a lot to learn so put in the comments if what am I missing let's start a discussion I appreciate you watching like I said earlier give this video a like give it a subscribe ring the bell if you want to be notified it pops up in your phone if you want it to and say Jesse lino uploaded a new video that's by clicking the bell down below and commenting really does help the algorithm and it lets grow this channel I mean I can't do it without you and let me know if I missed anything in the comments but remember the biggest thing I'll leave you with as you must understand construction see you next time