I want to build a building, how do I start?
The first thing to do is investigate building sites. There are many things to consider and compare when selecting a site such as development costs, utility connections, grading and City requirements. Aurum can help an Owner compare one site to another. The cost of the ground may not be the only factor to compare. If a site has a high development cost, it may be selling for less cost per square foot but actually be more expensive than a site with lower utiity connection costs or grading costs, for example. It is always a good idea, during the due deligence period, to have a site thouroughly evaluated by a professional prior to closing. Connecting with a design-build team will give you the information you need to properly evalutate the cost of the land.
If you already have a site selected, then the first step is to develop a preliminary plan for the building and site layout. Aurum is a design-build firm, we can help you select the right architect and engineering groups for your project. We work closely with the design team to help our clients develop a building that suits their needs, fits the proper zoning and meets the site development requirements of the City, County and other authorities. This is the stage that a preliminary budget should be established for the project.
The next step maybe approaching the City or County for a preliminary approval of the plan. We recommend this before going any further with construction documents to avoid the cost of re-working plans multiple times with the design team. Once the initial design approval is give by the building authority, a full set of construction documents should be implimented for permitting, estimating and building.
How does the Cost-Plus Model benefit me as an Owner?
Cost plus model has an average savings of cost and time of 12% over hard bid projects.The value to the Owner is no excessive mark up.
No matter how many years of experience a contractor has ( we have 30 years ) no project comes without unforseen circumstances. Contractors account for that in a hard bid by adding a "safety net" to their profit mark up. Situations may include mother nature, the regulating authority or material availability. No project is without some unforseen costs. Instead of a high markup, like a hard bid must include, any additions or changes to the project are billed at the same low rate as the rest of the project. Overall profit margin is typically half of a hard bid. Also, adjustments can be made to the plan and discussed openly and honestly between Owners and Aurum when all the costs of the project are laid out and shared.
A Cost-Plus project starts out with a budget for the overall project, as the project progresses, the actual cost is constantly compared by item to the preliminary budget bi-monthly. If the project or a change is made that looks like the preliminary budget will be exceeded or changed, the Owner is consulted and a decision is made about the options. This allows an Owner to be an active participant in the cost of the project.
At Aurum, the transparency is 100% on all actual costs of the project. No mark up is taken on any item by Aurum on the actual billing from the subcontractors and suppliers. The bill for the item is attached to the back of Aurum's bi-monthly invoices, Aurum's set fee is added to the bottom and all back up documentation is provided as part of the billing to the Owner. This gives Owners the guarantee that they are seeing the true costs of the project.
What exactly does Cost-Plus mean?
We keep it as simple and clear as possible. We take the invoices from the subcontractors and vendors, list them and attach a copy of each invoice to the Aurum bi-monthly Owner invoice, put the Aurum fee at the bottom as a percentage of the total cost billed and send to the Owner. Aurum manages all lien waivers, insurance certificates, contract documents and bank draws for the project. This is a very important part of the success of the project and assures accurate accounting and payment percentages for work competed. It's like an insurance policy against a project getting upside down or unacceptable work being accepted. The Aurum project manager documents that all work billed is completed, all materials are on the job that are billed and work is competed PRIOR to subcontractors and vendors receive payment.