ᐅ How much savings on building materials can effectively serve as near-wholesale equity?
Created on: 11 Feb 2022 00:07
J
Johnny82
Hello forum,
we are currently gathering information about building a house.
Today I learned something about employee conditions:
I recently started working for a company that, among other things, also deals a lot with building materials, and I can get the materials at the wholesale cost + x% + VAT.
I am not involved with the building materials department, but I share an office with two ladies from that department. Today I asked one of them how it would work if I wanted to build a house, etc.
She said that it’s not a problem for the tradespeople if you supply the materials yourself. It’s basically the exact same materials from the same source, and it probably reduces coordination efforts for the tradesperson. She also said something like, “I’ll handle teaching them if needed!”
So let’s just take that as a fact for now.
My mother works in the Black Forest region for a landscaping company that belongs to a construction company which also builds single-family homes. Their structural construction manager estimated around 600,000 euros for a turnkey house with 140-160 sqm (1500-1700 sq ft) of living space.
We’re currently using this figure as a rough benchmark.
On the landscaping side, materials are charged to the customer with an XX% markup. Let’s assume the structural construction company applies a similar markup and that this is standard in the market.
I am aware of the values for X% and XX%. (I don’t want to sound mysterious; it’s just to avoid a situation where a tradesperson shows up at my colleagues’ work tomorrow saying, “You sell your employees materials at XX% less than what you charge me!” and causes a fuss. Some of you might be able to guess which company I work for.)
What materials are available through my employer:
Everything for the shell construction, windows, doors, flooring, insulation, paints, plaster, gypsum, stairs, bathroom fixtures, everything for interior roof finishing, etc.
I’m not sure if we have the following:
Plumbing materials (pipes for water supply, heating, etc.), electrical installation materials, heating systems/heat pumps.
BUT: We have a building services installation team (three-digit number of employees, so a large team) covering heating/water/air/electricity (including photovoltaics), so this kind of equipment should be available to order.
What we don’t have:
Wood (e.g., beams) for the roof frame itself and “decorative” wood—meaning not the aesthetically visible wood, but only things like battens and similar.
So, long story short, here is my question:
Is there a factor or rule of thumb to estimate how much cheaper the 600,000 euro house would be if I got the materials basically at wholesale cost plus x% plus VAT?
Or maybe something like: If the house costs 600,000 euros, the shell costs 100,000 euros, and of that 30% is material costs? Something along those lines?
And similarly for other trades.
And one more question, even though it might be a bit early for this:
What might be roughly saved if you did the following work yourself:
Painting inside and outside
Laying flooring yourself in the bedroom, three children’s rooms, hallway on the first floor and second floor, basement (so more the “non-public” areas)
Roof interior finishing
My brother-in-law is a master painter and also does external insulation and possibly plastering; he would probably be available at a reduced rate.
I know a lot of “ifs” and “buts,” but rough estimates would be helpful for now.
If we were building in the Black Forest, I would:
Not have the employee purchasing conditions
Only have one brother-in-law with limited skills nearby
But have a friend who could possibly handle the electrical work
And an acquaintance for gas, water, and pool technology
Possibly, the landscaping could be cheaper through my mother’s colleagues
Due to the distance, my own work would probably be limited to painting inside and laying floors in areas where they are not urgently needed (so manageable), and eventually doing the roof interior finishing. Basically a fully turnkey project otherwise.
I’m trying to convert these differences into a monetary amount or at least get a feel for it.
Thanks for your insights!
we are currently gathering information about building a house.
Today I learned something about employee conditions:
I recently started working for a company that, among other things, also deals a lot with building materials, and I can get the materials at the wholesale cost + x% + VAT.
I am not involved with the building materials department, but I share an office with two ladies from that department. Today I asked one of them how it would work if I wanted to build a house, etc.
She said that it’s not a problem for the tradespeople if you supply the materials yourself. It’s basically the exact same materials from the same source, and it probably reduces coordination efforts for the tradesperson. She also said something like, “I’ll handle teaching them if needed!”
So let’s just take that as a fact for now.
My mother works in the Black Forest region for a landscaping company that belongs to a construction company which also builds single-family homes. Their structural construction manager estimated around 600,000 euros for a turnkey house with 140-160 sqm (1500-1700 sq ft) of living space.
We’re currently using this figure as a rough benchmark.
On the landscaping side, materials are charged to the customer with an XX% markup. Let’s assume the structural construction company applies a similar markup and that this is standard in the market.
I am aware of the values for X% and XX%. (I don’t want to sound mysterious; it’s just to avoid a situation where a tradesperson shows up at my colleagues’ work tomorrow saying, “You sell your employees materials at XX% less than what you charge me!” and causes a fuss. Some of you might be able to guess which company I work for.)
What materials are available through my employer:
Everything for the shell construction, windows, doors, flooring, insulation, paints, plaster, gypsum, stairs, bathroom fixtures, everything for interior roof finishing, etc.
I’m not sure if we have the following:
Plumbing materials (pipes for water supply, heating, etc.), electrical installation materials, heating systems/heat pumps.
BUT: We have a building services installation team (three-digit number of employees, so a large team) covering heating/water/air/electricity (including photovoltaics), so this kind of equipment should be available to order.
What we don’t have:
Wood (e.g., beams) for the roof frame itself and “decorative” wood—meaning not the aesthetically visible wood, but only things like battens and similar.
So, long story short, here is my question:
Is there a factor or rule of thumb to estimate how much cheaper the 600,000 euro house would be if I got the materials basically at wholesale cost plus x% plus VAT?
Or maybe something like: If the house costs 600,000 euros, the shell costs 100,000 euros, and of that 30% is material costs? Something along those lines?
And similarly for other trades.
And one more question, even though it might be a bit early for this:
What might be roughly saved if you did the following work yourself:
Painting inside and outside
Laying flooring yourself in the bedroom, three children’s rooms, hallway on the first floor and second floor, basement (so more the “non-public” areas)
Roof interior finishing
My brother-in-law is a master painter and also does external insulation and possibly plastering; he would probably be available at a reduced rate.
I know a lot of “ifs” and “buts,” but rough estimates would be helpful for now.
If we were building in the Black Forest, I would:
Not have the employee purchasing conditions
Only have one brother-in-law with limited skills nearby
But have a friend who could possibly handle the electrical work
And an acquaintance for gas, water, and pool technology
Possibly, the landscaping could be cheaper through my mother’s colleagues
Due to the distance, my own work would probably be limited to painting inside and laying floors in areas where they are not urgently needed (so manageable), and eventually doing the roof interior finishing. Basically a fully turnkey project otherwise.
I’m trying to convert these differences into a monetary amount or at least get a feel for it.
Thanks for your insights!
H
HilfeHilfe13 Feb 2022 08:26HansDampf88 schrieb:
That could very well be one reason.
But there are certainly other reasons for self-employed workers who have no “administration” at all… no administrative tasks (driving around, making calls, placing orders, checking invoices, paying invoices), no tied-up capital… just show up, lay bricks, then go home and let the client handle all the other stuff… After all, there are only 24 hours in a day. Of course, there are also purely wage laborers. But you first have to find them. They come, lay bricks, and disappear. There’s none of this “wait until tomorrow when Elli comes to coordinate.”I have never had tradespeople use their own materials. I have mostly sourced everything myself, whether directly from the manufacturer, a building supplier, or through online classifieds. Of course, not every tradesperson wants to work under those conditions. But then I just have to find someone else.
S
Sparfuchs7714 Feb 2022 07:24Johnny82 schrieb:
That’s why I asked for a rough rule of thumb along the lines of:
“What is the approximate cost of materials in a shell construction priced at around 200,000 euros?”
If it were 100,000 euros, I could get a rough idea:
100,000 euros equals masonry equity plus a 25% surcharge plus 19% VAT, so I would pay xx.xxx euros less for the same materials.
I need to start somewhere and at least partially eliminate some unknowns.
That’s why I assumed above 600,000 euros for a standard detached house with about 150 sqm (1,615 sq ft) turnkey in a best value-for-money specification—no gold-plated faucets, but Hans Grohe fixtures would be fine.
Plus the statement from the building materials store manager, as an assumption, that this should work with the materials and if the tradesperson charges a “handling fee,” then that can be negotiated. They don’t have to pay invoices, have less accounting effort, and no capital tie-up.
And savings of X0,000 euros through cheaper materials, family help, and self-managed building versus turnkey construction can definitely tip the scales quite a bit in favor of the eastern option. Under these conditions, I estimate you could save XXXX€ – XXXXX€.
Seriously though: don’t you realize this isn’t going to work and is just feeling around in the dark?
-> Go to the bank and have them calculate the loan amount based on your income. Then have your mother’s friend draw up an initial floor plan and get one or two quotes. On that occasion, you can also discuss the material supply arrangement.
With your XXX€ savings at XXX% discount and XXX€ tradesperson surcharges, no one can give you any sensible advice.