Loose Screws header

 

RRP Classes Offered by Chapter

February 2, 2010 and March 8, 2010

  

  The University of Cincinnati will instruct Ohio Valley NARI's two
Repair, Renovate and Painting (RRP) classes to be held on the
U.C. campus. EPA's Renovation, Repair and Paiting Final Rule (40
CFR 745) requires that renovations conducted for compensation,
must be performed by Certified Firms using Certified Renovators.

 

  Renovation firms that wish to work in pre-1978 homes and childoccupied facilities must apply to the EPA and pay a fee in order to become certified. Renovators seeking to become Certified
Renovators must successfully complete an EPA-accredited
renovator course or a course accredited by an EPA authorized
State or Tribe. This course is the EPA model course for Certified
Renovators and as such meets all requirements in 40 CFR 745.90.
This class will be conducted on the University of Cincinnati campus
at 2180 East Galbraith Road, Building A, 3rd Floor. The cost for
this program is $179 per person for members and $229 per person
for non-member companies. Note that additional classes will be
scheduled as needed. Register at www.naricincinnati.org or call
(800) 498-NARi and RSVP today!

 

 

Sandler Seminar Offered to Members

February 10, 2010

Ohio Valley NARI along with Roth & Associates will be presenting a
Sandler Seminar Sales Training program on February 10, 2010
from 8:00 AM until 4:00 PM. The Seminar will be held at 4357
Ferguson Drive, Suite 190 in Cincinnati and lunch will be
included. The highlights include: Why salespeople fail and what to
do about it, How traditional sales practices turn salespeople into
unpaid consultants, How to get to the real decision maker, How to
touch 100% of your desirable opportunities 100% of the time, Why
everyone looks busy, but sales remain low, Do your salespeople
have what it takes to succeed in today's volatile economy and
marketplace, and Is your sales management strategy and structure
optimized to produce the results YOU need to succeed? The cost
is $250 per person with limited seating offered - so reserve your
seat today! For more information or to register, visit
www.naricincinnati.org or call (800) 498-NARI.
 

 

Forensic Consulting Pays Off

By Morgan Zenner

 

All remodelers have received those calls from distressed homeowners who are having issues with their homes. There are only three reasons for these problems: natural causes, like wear and tear, natural disasters or a mistake made by the previous contractor. Either way, some of these instances are serious enough that they are the subject of expensive litigation. Before that happens, an expert must assess the source of the problem, a service that continues to be in demand. 

Von Salmi, principal of Von Salmi and Associates, fell into this line of work (known as construction forensic and expert witness testimony) by way of a past client.   
 
"One of my clients who was an attorney asked me to help one of his clients who was having trouble with their home," Salmi says. "I went over there, took a look and put together a report-sure enough my work helped the homeowner gain a favorable finding."
 
The attorney, who was a client from 10 years ago, called a couple of years later for the same favor, and Salmi provided another forensic report that resulted in a similar positive outcome.
 
Fast forward to today: Salmi built his forensic reporting and expert witness testimony consulting business, which helped him maintain his income during the downturn in construction work.  
 
Salmi has 45 years worth of experience in the building industry. He earned a bachelor's degree in landscape architecture and a minor in architectural history. He's worked top-level management positions at large building firms that specialized in multi-million dollar projects. Eventually, he started his own high-end remodeling, consulting and design firm years later. His experience has developed both his construction knowledge and skills and the communication abilities necessary to provide expert witness testimony.
 
"I have very strong writing and communication skills, which are a necessary part of my consulting business," Salmi says. A forensic investigation is actually a lengthy legal report, documenting the findings through images and writing.
 
Here's how it works. Typically, a homeowner contacts Salmi with a problem such as flooding issues. The homeowner pays Salmi an hourly consulting fee to take a look at the house.
 
"First, I conduct an interview with the homeowners to assemble the facts as they have come to know them," he says.
 
More times than not, the real issue is hidden behind a wall or underground, and that is usually the point when the client is faced with a big decision. "A large discussion and understanding process needs to take place before I start to tear up a home," Salmi says.
 
Understanding most of the time means the cost of what lies ahead in terms of getting the problem fixed and a possible lawsuit. The homeowner is liable for the cost of work it may take to uncover the issue, the cost of work to return the home to its primary condition and the cost to pursue a lawsuit or litigation.
 
The investigative process is documented through photos from the beginning so Salmi does not implicate himself at any point. As things get more serious during the discovery, a lawyer may become involved.
 
For example, one of Salmi's clients had repeated flooding issues in their new home. They had a hunch it was more than bad luck and hired Salmi to look into the problem. He found very poor construction, including an improper footing drain, crushed piping and unsealed foundation penetrations. The client decided to resolve the problem at their own expense and is presently using Salmi's report as evidence in a lawsuit to seek relief from the builder for the improvement costs. 
 
"It depends on the case, some homeowners cannot afford a lawsuit but need a report in case one day they have to sue someone," Salmi says. "Other times, the problem is so severe, the home becomes inhabitable. In that case, homeowners don't have other options and need to have a lawyer assisting them throughout the process."
 
In the latter of the two cases, Salmi works closely with the lawyers to identify the scope of work and concerns, but does not divulge the details of the report until it is complete.
 
"It's very important for the report to be based on facts only and not based on the lawyer's opinions or even my own opinion," Salmi says.
 
If the case is brought to court, Salmi charges an additional fixed fee to provide expert witness testimony. "Depositions and testifying in court can take a lot of time and place additional liability on me for the statements I make, which probably require a lot of research on my behalf," Salmi says.
 
The research needed to write a report can be extensive. Salmi researches manufacturer's guides and licensing and building codes, sometimes dating back decades, to complete the investigation. 
 
Still, Salmi insists that between the consulting fee he charges and the consistent flow of work, all of this labor is worth it. He estimates nearly 40 percent of his construction work stems from his investigative consulting work.
 
There is a level of trust developed between Salmi and the homeowners after he completes the report and helps them understand the solutions. "In cases where the contractor is at fault, I try to talk homeowners into presenting the report to the contractor and working out a solution on their own; in cases where the contractor will not budge but it's not worth a lawsuit, they oftentimes hire me to finish the work," Salmi explains.
 
But for a line of work that is almost solely based on credibility and expertise, it may be a little more difficult to get involved in investigations. "I promote my services through a brochure and direct mail piece that I send to homeowners and law firms, but most of my work comes through word-of-mouth and networking at associations like NARI," Salmi says.
 
And he has a word of advice for anyone who is interested in this type of work: First, realize you're putting your name and reputation on the line every time you conduct an investigation. Next, he or she must be comfortable with speaking publicly before lawyers, a court of law or crowds, and communication must be articulate, logical and factual.
 
Finally, you must have thick skin to get by in the business. Salmi admits there have been a few not-so-nice defense lawyers who have tried to knock his credibility. And don't always expect to make a lot of friends-Salmi runs the risk of running shoddy contractors out of business.  

 

Big-Box Installed Sefvices, Part I

By Rick Provost

 

About five years ago we were approached by a large home improvement retailer to build decks under their name across the country. They wanted us to create a catalogue of pre-designed projects that their installation services staff could price quickly and sell in the store; and they also wanted us to provide them with labor-only services, as they would be providing the materials.
There were a number of issues that came to mind as I considered the potential relationship. The most important was the concept of a labor-only relationship. From my point of view, that arrangement would remove most of the value my company added, relegating our service to a commodity. That concern was heightened when they asked us for a single square foot price -- basically, take our labor cost and mark it up. Since the industry standard markup is 50%, it felt as though we were viewed as just a carpentry service, attractive mainly because we had a presence in 30 states.

So put yourself in this scenario and run the numbers to see how you would fare compared to the retailer. Assume that your labor cost for construction of a simple pressure-treated deck is $5.00/sq.ft. A 50% markup on the labor would produce a contribution to your company of $2.50/sq.ft., for a total labor charge to the retailer of $7.50/sq.ft. Also let's assume that a simple pressure-treated deck costs the customer $20.00/sq.ft. After deducting your labor cost and their material cost of around $5.00/s.f. (remember, they're the supplier), the home improvement company would receive a gross margin of $7.50/s.f. or 37.5% of the selling price. Your $2.50 would be 12.5% of the selling price.
Skilled labor is a scarce resource, and should be used to produce the highest gross margin attainable relative to the market value of a project. For custom-designed, custom-built projects, this margin should be in the 40% to 50% range. Proportionately, labor costs should be in the 20% to 25% range. This means that when you deploy a "unit" of labor, the markup should be 160% to 200% in order to achieve the desired margin. As the labor-only provider in the example above, your markup was 50% instead of 160% to 200%; your margin was 12.5% instead of 40% to 50%.

 

Labor Costs/sq.ft. = $5.00

 

Markup @ 50% = $2.50

Markup @ 160% - 200% = $8.00-$10.00

Margin @ $2.50 = 12.5%
Margin @ $8.00-$10.00 = 40% to 50%

Selling Price/sq.ft. = $20.00
Selling Price/sq.ft. = $20.00

Because of this, I decided to propose a labor rate far above the industry norm -- one that would generate a real-dollar contribution to overhead and profit comparable to that produced on a typical project; with a discount to allow for the fact that the marketing and advertising, design and sales costs would be covered by their company instead of being paid by us as below-the-line expenses.
However, we still had overhead for these functions, which would have to be covered by non-big box work. So, given a choice, we would commit our construction crews to projects that produce the greatest return. But in slow times (economically or seasonally), the choice may not exist. This relationship might make sense if the big box retailer could provide a consistent book of business that would help make the workflow more predictable and cover the monthly nut.

 

 

Lasco Bathware and Aquatic Whirlpools Announce Merger 

By Lauren Hunter

 

Bath and shower product company Lasco Bathware has merged with hydrotherapy firm Aquatic Whirlpools to form Aquatic, the new company announced on Monday. Aquatic will be headquartered in the former Lasco company's location in Anaheim, Calif. A combination of expertise from both companies positions Aquatic for solid business in the everyday bathing, accessible bathing, and luxury hydrotherapy markets.

"At Aquatic, we recognize and are inspired by the power of our products to relax, refresh, reinvigorate, and renew," said Aquatic president Gary Anderson in a press release. "That inspiration is built into everything we do, from the way we design, engineer, and manufacture our products, to how we work with our distribution partners, to the customer experience at every touch point while planning and shopping, and ultimately benefitting from our tubs and showers.

With 65 years of combined experience, Aquatic blends Lasco's product breadth and operations strategies with Aquatic Whirlpools' sleek designs and creative bathware designs. The new company will be a one-stop shop for bath and shower products, according to Dave McFarland, director of marketing and new product development.
"We're positioning Aquatic as a true, national bathware specialist, as opposed to the many whole-house generalists you see in the market," McFarland told Remodeling during the International Builder's Show (IBS 2010) on Tuesday. "With expertise across everyday, accessible, and luxury bathing, we're in a unique category as a specialist in bath fixtures."

The company says all three product areas will benefit individually from the former Lasco company's national distribution capabilities. However new opportunities are created when crossover between product categories is considered.
"We have a vision that accessible bathing will become everyday bathing," McFarland says. "Combining the accessibility features we've incorporated in the past and in new products with whirlpool features from the luxury product line's expertise will help drive that change in the market."  McFarland says accessible bathing remains an emerging category in the bath fixture industry and that manufacturers need to understand the limitations of current products on the market in order to create innovative products that go beyond necessity and code compliance.

As such, the company is debuting its Ava Bath at IBS 2010, featuring technologies that offer style, convenience and comfort.

Unlike most accessible bathtubs that feature a swing-open door and a bench seat, the Ava Bath features an automated door that runs nearly the full length of the tub, and raises and lowers completely, allowing bathers to more easily enter and exit the tub. With no bench, Ava functions as a soaker tub for more immersive, therapeutic bathing that isn't often possible in other accessible tubs. A patent-pending quick-drain feature empties the 70-gallon tub in 30 seconds or less, which means bathers don't have to wait to exit the tub and dry off. Four Ava bath models are available, including soaker, whirlpool, air bath, and air/whirlpool designs, and the 60-inch tub is suitable for either new construction or remodeling.

McFarland says early response from Aquatic dealers has been positive and enthusiastic. The company remains in the early stages of organizing production, which will be anchored in six manufacturing facilities around the U.S., and distribution, executed by the company's own 200 tractor-trailer trucking operation.

  

NARI Logo

 

February 3, 2010

 

QUICK LINKS

 

Construction Workers

 

Ohio Valley NARI

800.498.NARI (6274) | Fax: 937.222.5794 | info@naricincinnati.org