Recent Articles

January 2013

What is a Reasonable Profit in Construction?

01/31/2013

For any company, profit is based on the risk reward concept.  So in construction, what should be the profit (reward) given the risk?  What is a reasonable expectation given the industry and the particular business?  There is no single correct [...]

Methods to Reduce Costs in New Home Construction

01/30/2013

This article describes methods to reduce the overall cost of construction for a new home.  The new home construction industry has been hit hard by the devaluing of real estate during the four year period of 2008 to 2012.  There is no reliable [...]

Capitalizing a New Home Builder Business

01/30/2013

Bankrolling any startup business is difficult enough.  Capitalizing a new home builder operation is a leap forward in required funds.  Typically, small businesses can be capitalized on a shoestring budget, for a new home contractor, just a little [...]

The 1099 Subcontractor

01/26/2013

The Internal Revenue Service promulgates rules and regulations concerning the employment status of workers.  In general, workers are classed as W-2 employees and certain tests must be met to have the worker classed as a 1099 subcontractor.  All [...]

Business and Industry Growth

01/25/2013

The second most weighted factor in the risk multiplier series for the Discretionary Income Multiplier Formula is business and industry growth.  This factor evaluates the overall change in an industry and in particular the business under review over [...]

What is a ‘Spec’ House?

01/24/2013

When a builder constructs a house without a contract, it is known as a spec house or a speculation home.  There are several advantages to the builder to build a spec house including timing, financial gains and workforce retention.  There are [...]

Construction Draw Schedule

01/22/2013

A construction draw schedule is a financial tool used by contractors in identifying percentage of completion points in the project for the bank to advance proceeds to the contractor. The construction draw schedule is instrumental in keeping the [...]
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