Residential renovations suck and are not worth the fees! {PROVE ME WRONG!} 3

[human909]

A deliberately provocative title to get a conversation going. And I fully expect to be proven wrong by some nimble engineers who are more skilled and comfortable in this area that I am.

The instigation this thread is I've just returned from a site visit from a owner who is removing a load bearing wall. No architect and no builder engaged yet. I should have said no at this point, but I'm still in the growth phase of my sole practice and I still say YES to almost anybody who asks. From an engineering perspective it is just a new new roof beam, a couple of supporting studs and two localised footings as the home is on stumps. The visit was local but it is still a couple of hours by the time you communicate, commute, inspect and return. That time is all BEFORE you get into any engineering work. Then given the relatively small task, fees can't be excessively high.... But the building is 80-100years old, the risks and challenges shouldn't be ignored.

My point is that today has further made me question the benefits of bothering taking on such clients unless I am hungry for work. Today's visit just didn't seem worth any potential fees and risks. Especially since I crouched through the roof space and crawled through a floor space for a decent inspection.

Anyway that is my rant. I'm probably just too comfortable in my own area of expertise (industrial and manufacturing facilities). Both in terms of healthy fees and in my own confidence of my engineering knowledge in the industrial field.

Do others here relate to my experience? Do I just need to know when to say 'no'? Or is what I describe just bread and butter for some people?

 

[SinStrucEng]

I certainly can relate because it residential work is a big chunk of our business. That said, I have made it my priority to explain the required efforts to my clients so that they are more understanding when it comes to my costs. I also provide pricing in staging.

X amount of dollars gets you a site visit for us to meet, discuss, me take measurements, etc. I price my visit based on an average 2 hour stay at the property. I add mileage costs to the visit - as additional charges - based on my actual driving there and back to my office in accordance with the federal limits. I usually can go pretty fast and end up "ahead" and with profit after the visit.

During the visit, and after reviewing/discussing, I provide an estimate on the actual design work. This is always a range. Never a fixed cost. I never provide estimates before a visit because there are simply too many uncertainties, and once people hear a number, they stick to it and will argue if you try to increase it later (obviously).

Y amount of dollars gets you a design and drawings. One response to the AHJ is included, to account for questions during permitting.

Additional city responses, additional visits, or calls/meetings are charged hourly.

I agree that conversations and discussions take up a lot of time. Honestly, I still struggle with that. At the end of the day, cutting straight to the chase works for me. Perhaps it makes me seem abrasive or rude at times, but it has not reflected on our business and people keep coming back.

 

[SinStrucEng]

I should add, that is my process for renovations and whatnot. If they come to me with architectural drawings and simply need the structural engineering, then I provide a fixed cost with the agreement that additional reviews/resubmissions/site visits/site instructions are all hourly.

At the end of the day I make a decent profit and I am happy. Little competition in my market for this style of work, and I get to work at my own pace. I also get to avoid the tight deadlines and complexities that come with larger projects, hence why I like it so much. We do some industrial and commercial work, forensic, rehabilitation, etc., as well, but I don't enjoy those as much.

 

[Euler07]

It all depends on how much you charge. Are you in Australia @human909? What is your typical charge for a project like this? I wouldn't necessarily say no if I had time, but charge an amount where you would be happy doing the work, taking into account opportunity cost etc.

 

[human909]

One issue in this case is I didn't make my costs know upfront. The new client just asked me to jump and I said how high. I'm used to responding like that because most of my clients are happy to pay the bill I send them after I jump high!

I certainly can relate because it residential work is a big chunk of our business. That said, I have made it my priority to explain the required efforts to my clients so that they are more understanding when it comes to my costs. I also provide pricing in staging.

Yep. I didn't want to do a site visit for this one. I like site visits, but I didn't think it worth my time. The client requested it and I should have given a fixed price for a site visit for this type of job. A learning experience for me.

When I known builder/architect asks me for a site visit I normally say yes. But that is because they know the costs and partly know if it is necessary.

I should add, that is my process for renovations and whatnot. If they come to me with architectural drawings and simply need the structural engineering, then I provide a fixed cost with the agreement that additional reviews/resubmissions/site visits/site instructions are all hourly.

Same deal with me. In my narrative above, I naively assumed (didn't ask) that some of that was in place. Instead it was a homeowner who was still shopping around for a builder and had no architect and was hoping to do without. (He got my details from a builder he spoke to.)

At the end of the day I make a decent profit and I am happy.

And that is what counts.


I'll see where this job goes....

 

[jerseyshore]

I try to always give a rough price for at least the site visit up front.

When you don't say any price and then show up and tell them $1000 or something there is probably 15% of the population that gasps.

So easier to just say it'll be $600 for the site visit and once I get eyes on it I'll be able to give a better price. Was burned once when I first started out on my own so I said never again. Also send that price in a text or email because they always "forget" the price you told them 3 days ago.

I'll do these jobs all day because they are usually pretty easy and I love chatting with homeowners.

 

[human909]

Thanks to all the replies above. I appreciate context and feedback from others.

It all depends on how much you charge. Are you in Australia @human909? What is your typical charge for a project like this?

Typical project like this? I don't have a figure as I'm still somewhat 'green' on these projects.

How much I charge generally? I almost feel abashed to reveal that. But I nominally charge AUD$350/hr (USD$220/hr) for my billable "time". But by that classification my billable hours are currently 4 hours a day. Administration, communication and extra hours make up the rest of my working hours.

Either way I'm staying busy and I have over 90% conversion rate on the quotes I provide my clients so I must be doing something right! Overall I definitely don't feel I can complain about my earnings situation.

I wouldn't necessarily say no if I had time, but charge an amount where you would be happy doing the work, taking into account opportunity cost etc.

Yep. And after today's visits I'm asking myself whether the amount I would charge to be happy doing this work is ever going to be accepted by the client. I am a people pleaser so once I'm shaking hands and on site I'll put in the work required.

But you have struck at the heart of my question here. I'm not sure today's visit or work beyond today, will ever be worth the opportunity cost.

I'll do these jobs all day because they are usually pretty easy and I love chatting with homeowners.

I too like chatting to home owners. But currently these jobs aren't 'pretty easy' for me (I'm stronger in other areas). Hence me questioning the opportunity cost.

 

[GregLocock]

As an uncivil (indeed rude mechanical) engineer I'd say your first few projects of a given type are also a big learning experience, and so to some extent can be regarded as educational expenses. I took on a job with significant CAD requirements, thinking I could outsource the boring bit, to discover that actually locating a CADologist who didn't need teaching but charged less than my hourly rate (at the time) was going to take longer than doing it myself. So I did the boring bit (TBH I don't mind CAD, it just isn't a major interest). Yeah AUD400/h sounds about right as of 2023.

 

[SE2607]

For the last 15 years or so, my practice has been almost exclusively residential remodeling. I either work with a contractor or a home owner. I would say less than 20% of my work is through an architect. Most of my jobs don't require architectural design. It's either remodeling a kitchen and bath room, adding a room, adding panorama doors and other similar tasks. Occasionally I get the project where the owner wants to remove interior walls. It's all pretty interesting because no two jobs are alike. I've even done two projects in the same neighborhood, same floor plan, but the remodels turned out totally different. I started out doing residential remodeling and consistently underbid projects. I still do that occasionally and I wouldn't consider this kind of work if I had employees. That's what happened with my practice. I started out doing residential remodeling, started hiring people, found out my employees weren't as fast or knowledgeable about the nuances of residential construction. I couldn't hit budgets and, worse, the work wasn't that good. I then moved to commercial work and I did make better money, but the work was boring. Just a bunch of square boxes. Architect was king. Yadda, yadda. I finally realized I wasn't able to get clones of me and let everyone go. I do my own calcs. I use spreadsheets to make it more efficient. I do my own drawings. I go to the sites. I write the contracts. I collect the fees. By now, I've gotten pretty efficient at it, but I still go over budget. I detail too much. That's where it gets me. In my defense, every time I try to leave details out, the work doesn't turn out the way I would have liked. I now don't need as much money as I value happiness and serenity over money. I still enjoy my work, solving the puzzle. I have good clients, mostly contractors, who are quite loyal. I get paid better and faster. I don't have to work those 70-100 hour weeks any more. I have a note scotch taped to the bottom of my monitor which reads: "Do your best work and enjoy it. Do your business as if you don't need the money." I like learning stuff. I tried Revit for 8 years. While I enjoyed 3D modeling structures, it was frustrating trying to put together a set of construction documents. Sometimes I will have fun modeling a structure in 3D AutoCAD. I'm now thinking about digital terrain modeling. I've told more than a few people that I enjoyed studying engineering much more than I've enjoyed practicing it. It's a shame we are not valued more. I believe it's our own fault, mostly. We are lousy marketers as a whole.

To the OP, I would recommend the following:
1. Do your best work on every job, regardless of compensation.
2. After finishing a project where you are happy with the work, but not with the number of hours you put into it, start thinking of ways to streamline your work flow. I'm certainly not talking about "dumbing down" your process where you use generic details for 80% of your detail sheets where most of them won't apply to the project you are working on, leaving the contractor to figure it out. I use a lot of blocks that help me do the details faster as an example. I'm often amazed about how many details I still do for a new project. One would think that, after 37 years of detailing wood structures, I would have EVERY WOOD DETAIL KNOWN TO MANKIND in my library, but I don't.
3. Ask your client what he/she thinks the job is worth before you write your proposal. If you are working with honest people who enjoy working with you, you will be surprised what you find out from them. Whenever I've done that, I found I was about to leave a LOT of money on the table.
4. If you continue to get low paying jobs that require a lot of attention from a particular client, find a new client. Advertise. There was no such thing as Google Ads when I first started out. Heck, there wasn't even computers! Google Ads require a website, but it doesn't have to be flashy. Mine is words, tables and a few graphics. Yep. I built the pages myself using HTML and CSS (that was fun, too!). No Dreamweaver or Word Press for me LOL. Few people looking for a structural engineer will be impressed by a graphically stunning website. Show what you do and what kind of services you provide. Think about your practice and what makes you better than your competition.

I hope you end up as happy as I am. The only regret I've had in my professional practice was hiring someone else to do the stuff I really wanted to do in the first place. I probably should have hired a CEO. LOL.

Good luck and take care,

 

[SE2607]

I have over 90% conversion rate on the quotes I provide my clients so I must be doing something right!

If you are getting a 90% conversion rate, your rate is too low. I get 90%, but my clients know me and I now know how to bid the project. Also, I'm very selective in who I work with. The project doesn't matter that much (they all know I love a challenge), but it's the people I'm working with is what matters.

 

[Just Some Nerd]

Missed the part where it said "renovation" on my first read and was a bit confused. I'm pretty biased given my line of work (new builds, resi/mixed use towers generally) but have always found that a job being smaller doesn't make it as quick as one would hope. Doing your due diligence on an existing build can lead to unexpected stuff.

Seems to me like the type of thing that needs efficiency and a good contract to limit additional unpaid work for surprise discoveries.

Either way I'm staying busy and I have over 90% conversion rate on the quotes I provide my clients so I must be doing something right! Overall I definitely don't feel I can complain about my earnings situation.

You're doing well with a 90% conversion rate imo, can probably afford a little more and/or be a bit pickier with jobs.

 

[GregLocock]

I was thinking about that 50% figure. At first it seemed high, and then I realised I don't charge for developing new generic tools that I might (but to be honest probably won't) use again later, and I don't charge for book-learning, research etc when I'm going into the nitty gritty details of some tangent.

 

[human909]

I finally realized I wasn't able to get clones of me and let everyone go.

Ha! Yeah... I've seen that. I briefly had an employee. But ultimately I think I take too much pride and ownership over my work to want to go that direction with anybody who wasn't an 'almost' clone.

I have one consultant/mentor on speed dial that I occasionally call advice. He is the only person I know who I'd dare suggest wear a title of 'genius'. He had a national wide business that he owned and ran. But he sold out and went back to work for himself and have his son alongside. He didn't want to run a company, he wanted to continue to be a great engineer.

"Do your best work and enjoy it. Do your business as if you don't need the money." I like learning stuff.

Great advice.

I've told more than a few people that I enjoyed studying engineering much more than I've enjoyed practicing it.

I'm the opposite. But that was likely due to mental health challenges at the time and poor teaching.

To the OP, I would recommend the following:
1. Do your best work on every job, regardless of compensation.

Absolutely.

2. After finishing a project where you are happy with the work, but not with the number of hours you put into it, start thinking of ways to streamline your work flow. I'm certainly not talking about "dumbing down" your process where you use generic details for 80% of your detail sheets where most of them won't apply to the project you are working on, leaving the contractor to figure it out. I use a lot of blocks that help me do the details faster as an example. I'm often amazed about how many details I still do for a new project. One would think that, after 37 years of detailing wood structures, I would have EVERY WOOD DETAIL KNOWN TO MANKIND in my library, but I don't.

CAD for residential is my nightmare. I have zero blocks and details of my own work. I've leaned heavily on details passed down from a retiree. But with different work flows they aren't as useful for me as they were for him. I've managed to stay away from CAD for most of my work. My clients have a CAD team and I so often I can avoid formal structural drawings. (I cut my teeth with 3D CAD modelling so I'm no stranger, but I try to avoid it when I can now.)

I hope you end up as happy as I am.

Thanks, I mostly am pretty damn happy with my career situation. I considerer myself to be extremely fortunate to have ended up where I am. Yes there has been hard work, but I've been lucky too. My complaining about this one job is almost me being fortunate not to have to fight or work hard for the rest of my work.

 

[Smoulder]

Didn't read longer replies carefully so might be repeating. Goes better if you get comfortable ring fencing scope. So you are only looking at the reno and not identifying and solving latent conditions. Get good standard contract terms that protect as far as contract can. Not unethical as common law and regulations keep you to decent standard, just means obligations stay in line with fees. Don't think Aus resi works out if you worry about risk vs reward.

 

[ANE91]

I just started out on my own and have a lot of anxiety about risk v reward. Keeping my day job until I feel more comfortable. Thanks for making this post.

 

[XR250]

These are my bread and butter. For easy ones I charge about $750 USD. Try to combine 2 or 3 in a day and not travel more than 20 miles from my office. The site visits are usually 20 minutes and the engineering and drafting or a letter is about 30 minutes. Honestly, I do the engineering on my calculator while on site so I can communicate the beam size options to the customer. I charge more for more complicated ones.

 

[RPGs]

Reading these replies, especially from SE2607, makes me want to go back to the small residential projects so bad.

There's plenty of headaches in dealing with one-off clients and homeowners, but every day is exciting, different, and gives me the opportunity to put my best foot forward in many respects. Back when I did it full-time, I used to come home with a dozen stories a week, not just about the engineering challenges, but the people, places, and situations I encountered.

Small residential engineering was my first job after school for 2 years and I knew within a week it's what I wanted to do for my career. I had to leave because 1) the pay was atrocious, 2) I needed move to a firm with multiple PE's for my NCEES record, and 3) I knew just understanding residential framing wasn't going to cut it in the long term and needed to gain more technical acumen in commercial and industrial projects.

Now 4 years later and PE license secured, I'm lucky if I get one or two quick/easy residential projects a month and I am over the moon excited every time; I unironically look forward to the site visit all week.

I have been thinking about it more and more and this thread affirms the feeling that it's what I really want to be doing again. Recently, an opportunity came my way that might land me exactly back in that game. I think I'm going to give it a shot.

 

[phamENG]

If you can get a good system put together, these can be quite lucrative as XR mentioned, and very interesting as RPGs mentioned. But I've found it sort of needs to be an all or nothing, at least for me. You need enough to employ that sort of system to stretch your margins, but at that point it's hard to stay on top of design work for more than one or maybe two architects for bigger projects.

 

[jerseyshore]

Reading these replies, especially from SE2607, makes me want to go back to the small residential projects so bad.

There's plenty of headaches in dealing with one-off clients and homeowners, but every day is exciting, different, and gives me the opportunity to put my best foot forward in many respects. Back when I did it full-time, I used to come home with a dozen stories a week, not just about the engineering challenges, but the people, places, and situations I encountered.

Small residential engineering was my first job after school for 2 years and I knew within a week it's what I wanted to do for my career. I had to leave because 1) the pay was atrocious, 2) I needed move to a firm with multiple PE's for my NCEES record, and 3) I knew just understanding residential framing wasn't going to cut it in the long term and needed to gain more technical acumen in commercial and industrial projects.

Now 4 years later and PE license secured, I'm lucky if I get one or two quick/easy residential projects a month and I am over the moon excited every time; I unironically look forward to the site visit all week.

I have been thinking about it more and more and this thread affirms the feeling that it's what I really want to be doing again. Recently, an opportunity came my way that might land me exactly back in that game. I think I'm going to give it a shot.

If you want to just write reports, reach out to realtors. They are always dying for structural engineers to write reports for house sales. We've done a ton in this past year since the housing market is so crazy here.

If you want to do the take a wall out and put in a beam type jobs, just reach out to the small house reno companies around you. Those jobs are never ending if you want them. And because you're doing a S&S drawing you can charge more. As XR said, with some experience and a quick calc you pretty much know which size LVL beam they need as soon as you step in the front door.

 

[RPGs]

Thanks @jerseyshore those are great tips for getting new clients.

At my old job my boss would pay for leads from a website (cant remember which one it was) when we were slower, with mixed results. Interestingly, it was also his policy for clients to pay up-front for site visits by credit card before being scheduled, which cost us some projects as some people found this suspicious and/or insulting, but I think helped keep out the riff raff, especially for one-off clients.

Do any of you require payment up front or deposits? For a client I don't have a relationship with, I normally require a deposit for drawings and bigger contracts, but wondering if payment up front for the short site visits we're talking about is something you do?