Project Management Frequently Asked Questions

1. WHY SHOULD I USE A PROJECT MANAGER THROUGH CUSTOM MODULAR DIRECT?
Project Managers approved by Custom Modular Direct, LLC have been hand picked because of their knowledge and experience with building modular homes.
2. WHAT GEOGRAPHIC AREAS ARE PM’S AVAILABLE IN?
We can offer referrals for PM's in most states.
3. WHAT ARE THE BENEFITS OF USING A P.M.?
Using a Project Manager allows you to get the most house for the best costs. Using a PM also allows you to maintain your everyday life, and eliminate most of the stress involved with building your home.
4. HOW ARE SUBCONTRACTORS AND SUPPLIERS PAID?
Subcontractors and suppliers are paid by the project manager after the PM approves the invoice and at the applicable draw. Funds are out of the owners escrow account.
5. HOW ARE SUBCONTRACTORS AND SUPPLIERS CHOSEN TO BUILD MY HOUSE?
The PM will solicit quotes from companies; once all quotes are reviewed the PM will consult the owner with his recommendations. You are free to decide to go with the PM’s recommendations or your own personal choice.
6. ARE SUBCONTRACTORS AND SUPPLIERS UNDER A CONTRACT TO BUILD MY HOME?
Yes, all subcontractors and suppliers are under a legal contract to build your house.
7. HOW DO I CONTACT A PROJECT MANAGER?
Once you are ready to contact a Project Manager, Custom Modular Direct, LLC will establish the preliminary contact with the PM, give them your floorplan and ideas, and can either have the PM contact you or give you their phone numbers to establish contact at your convenience.
8. WHAT IS THE NEXT STEP AFTER A P.M. IS CONTACTED?
Once you establish contact with the PM, they will meet you on site, review your floorplan and ideas, and create a rough estimated construction budget (E.C.B.) for you. This estimated construction budget is based on historical costs from past construction projects. Once the estimated budget is established, the PM will then send a contractual proposal for you to review and sign.
9. HOW MUCH WILL IT INITIALLY COST ME TO CONTRACT THE SERVICES OF A P.M.?
When you are ready to sign the contractual proposal, an initial fee of $1000.00 will be paid to retain the PM’s services.
10. WHAT HAPPENS ONCE THE PROJECT MANAGER HAS BEEN RETAINED UNDER CONTRACT?
Once the PM has been retained under contract, he will help you utilize the estimated construction budget (E.C.B.) to finalize your financing with your lender. From this point on, the mortgage company will be involved with approving your allowable mortgage amount, approving a draw schedule for the construction of your home, and scheduling a settlement date to sign your paperwork and release initial funding to start building your home. **Remember- since your requested loan amount has been based off of the E.C.B. and since your lender determines the allowable loan amount that you can borrow, it may be necessary to modify the E.C.B. to match your final loan amount and to create your actual working budget.
11. HOW DOES AN ACTUAL WORKING BUDGET GET CREATED?
An actual working budget will be created with quotes from subcontractors and suppliers for the necessary work to build your house.
12. WHAT IS THE TYPICAL COST OF USING A PROJECT MANAGER?
Depending on the complexity of the project and location, the cost will be 10%- 15% of the total construction costs. The total construction cost will be established utilizing open book/cost plus management techniques.
13. WHAT IS OPEN BOOK / COST PLUS MANAGEMENT?
Open Book Management is the free flow of information from the Project Manager, subs, and suppliers. Every aspect of the construction process is open for your knowledge and peace of mind. Our fee is based on a percentage of total construction costs. Nothing is hidden from you from start to finish.
14. HOW DO I KNOW THAT I AM GETTING THE BEST VALUE AND TRUE COSTS FOR EVERY PURCHASE OR COST ON MY HOME?
The subs and suppliers are aware that they are competing against others for the construction of your home. You will receive faxes or emailed copies of all of the quotes that we receive. You will also be provided with copies of the final list of contracted subs and suppliers for your own personal records.
15. CAN I USE A FAMILY MEMBER OR FRIENDS TO PERFORM WORK?
We encourage you to use subs and suppliers that we have established relations with because we will have the most influence and control over them for quality and scheduling. However, if your family member or friend has a proven track record, references, and is competitively price to other quotes, then we will add them to our bid reference database.
16. IF I PERSONALLY BUY ITEMS FOR MY HOME, WILL YOU STILL CHARGE ME A MANAGEMENT FEE FOR THE INSTALLATION OF THE ITEMS?
Yes, we will still charge a management fee. We are still responsible for the installation, labor, and scheduling of the item(s) for installation.
17. WHAT HAPPENS IF I MAKE CHANGES TO THE SCOPE OF WORK?
A change to the original scope of work will result in a change order to all affected parties. Prior to implementing the change order, the mortgage company will also be given a copy of the change order.
18. WHY IS THE MORTGAGE COMPANY ALSO GIVEN THE CHANGE ORDER PRIOR TO IMPLEMENTING THE CHANGES?
The mortgage company must approve the change to verify that additional monies are available to pay for the change.
19. HOW DO I KNOW IF A SUBCONTRACTOR IS REPUTABLE?
References will be kept on subcontractors as well as a rating sheet for each project that a subcontractor is utilized on. These ratings as well as compliant and up to date insurance records will be kept to establish a subcontractor’s reputation.
20. HOW ARE ACTUAL COSTS TRACKED DURING CONSTRUCTION?
Actual costs are tracked on an electronic cost ledger that is created and maintained specifically for your house by the Project Manager, and is available for your review at any time.
21. HOW ARE SUBCONTRACTORS AND SUPPLIERS SCHEDULED?
The Project Manager will schedule all subcontractors and suppliers to maintain a smooth sequence of operations.
22. HOW DOES THE BANK KNOW WHEN TO ISSUE A DRAW?
A draw request sheet will be created by the project manager, sent to you to sign off on, and then forwarded to the bank. The bank will then send a representative to inspect the project and approve the draw release.
23. WHO KEEPS THE DRAW FUNDS TO PAY THE SUBS AND SUPPLIERS?
All funds are kept in your escrow account established by the bank.
24. HOW DOES THE PROJECT MANAGER GET PAID?
The Project Manager gets paid at every draw directly from the bank per the fee schedule approved by your mortgage company and the PM. The payment received at draw time is for the supervised work up to the draw date.
25. WHY SHOULD I AUTHORIZE THE BANK TO ALLOW THE P.M. TO WRITE CHECKS THROUGH MY CONSTRUCTION LOAN ACCOUNT?
Unless authorization is given for the PM to purchase necessary miscellaneous material from a builder supply store (Lowe’s, Home Depot, etc.), you will have to purchase and arrange for the delivery of needed materials prior to work continuing.
26. WHO APPROVES INVOICES FOR PAYMENT?
All constructions invoices will be sent to the PM for approval. Once the PM approved invoices for payment the invoice will be paid via the escrow account and a copy will be made for your records.
27. WHO KEEPS RECORDS OF INVOICES DURING CONSTRUCTION?
The Project Manager receives, records, and approves invoices during constructions and prior to any payment being sent.
28. HOW LONG WILL IT TAKE TO BUILD MY HOME?
The size of your home, and weather, directly affect the construction time of your home. For a good estimation, once the house has been delivered and set on the foundation, figure 90-120 days to complete the work on a 2000 square foot home. **This of course will vary depending upon the season constructions begins. Due to events beyond our control, we can not promise a move in date until the final weeks of construction.
29. WHY DOES WEATHER AFFECT MY SCHEDULE AND ANTICIPATED MOVE IN DATE?
There are less suitable construction days in the winter to build a home compared with the summer months. Historical data from the national weather service is used to modify time frames necessary to build your house and will be used accordingly once construction commences in order for a more accurate schedule to be created. Again, due to events beyond our control, we can not promise a move in date until the final weeks of construction.
30. WHAT SERVICES DOES THE P.M. PROVIDE AFTER I MOVE INTO MY HOUSE?
So as to not impede on your privacy in your new home, we would assume that you can handle supervising any minor service issues. However, we will analyze your concerns in person and make arrangements for the necessary parties to correct any encountered issues after you move into your house during the home’s warranty period.
31. WHEN MY HOUSE IS FINISHED, WHAT DOCUMENTATION DO I RECEIVE FROM THE PM?
You will receive a notebook consisting of a complete copy of your invoices and final construction costs, contracted subs and suppliers, related photos during construction, and related construction notes for your records.
32. WHO KEEPS RECORDS OF INVOICES AFTER CONSTRUCTION?
In addition to the notebook that you will receive, your Project Manager will also keep a duplicate copy in their possession.
33. HOW MUCH INVOLVEMENT DO I HAVE WITH THE CONSTRUCTION OF MY HOUSE?
You will be involved as much or as little as you would like to be. We hope that you will maintain involvement and the excitement of watching your home being constructed.
34. WHAT TYPE OF CONSTRUCTION RECORD DOES THE P.M. MAINTAIN?
The PM maintains job records for work in progress and completed. Copies of these progress records will be sent to you. The PM will not keep a record for days that no subs were on site.
35. WHAT INFORMATION IS SHARED WITH ME DURING CONSTRUCTION?
All recorded or received information is shared with you during the project. **Refer to open book management.
36. WHO IS RESPONSIBLE FOR CONSTRUCTION OVERRUNS?
You are responsible for construction overruns. While we expect our subs and suppliers to perform per their contract, unexpected or unforeseen costs may occur. Your mortgage company would approve overruns by change order prior to them being implemented. If such an occurance happens, we will work with you to try to minimize the impacted cost by possibly reducing or changing another scope of work in order to maintain your budget.
37. WHY DO COST OVERRUNS HAPPEN?
Unforeseen/unexpected conditions do happen that can not be controlled, I.E. (Unexpected rock while excavating your foundation). If your budget allows, we will try to factor in contingency money into your actual budget for such an event.
38. WHAT INSURANCE IS THE P.M. RESPONSIBLE FOR?
The Project Manager is required to have general liability insurance per the states that we operate in.
39. WHAT INSURANCE AM I RESPONSIBLE FOR?
You are responsible for construction insurance while and after your home is being built. Your Project Manager does not provide insurance coverage during the construction of your home against theft, damage, vandalism, etc.
40. WHAT INSURANCE ARE SUBCONTRACTORS RESPONSIBLE TO MAINTAIN?
Subcontractors are required to maintain general liability coverage & workmans’s comp. insurance. If coverage was set to expire shortly after your construction began, we would require proof of renewal prior to contracting them to work.
41. HOW DO I KNOW IF MY HOUSE IS ON BUDGET?
All invoices and costs will be maintained on a personalized electronic cost ledger. Budget analysis reports will be run with invoice batches to show current and projected costs. A copy will be given to you for your review at each new batching of invoices.
42. CAN MY CONSTRUCTION LOAN PAYMENTS BE INCLUDED AS PART OF MY BUDGET?
While some mortgage companies include constructions loan payments as part of your construction loan, we can include estimated payments in your budget if you are below your approved loan limits.
43. I HAVE FINISHED BUILDING MY HOUSE AND HAVE MONEY LEFT OVER. WHAT IS MY BEST OPTION IF I HAVE BORROWED TOO MUCH MONEY?
If you have settled on a construction to permanent loan and you escrow account has a significant amount of money left in it at the end of your job, many lenders will allow you to apply that amount to your loan principle to reduce your overall loan balance. Since this is lender specific, we suggest that you consult with your lender regarding this.