Getting started on building a house

Hello friends. I am married to my filipino wife who lives in Dumaguete with our two daughters. I am 46 years old, still in California, and making plans to retire as soon as I feel financially comfortable. As part of my retirement plan, I bought a piece of land in Canduay and am looking for help in building some apartments-for rent (maybe 3-4 ?)

I know NOTHING about building houses ! Also, I don't have anybody in Dumaguete to monitor this in detail. So I need to be sure that I am dealing with honest folks.

I would like to know what you think about my evolving plan so far.

I was to referred an architect - Neil Arvin Tia (heard of him?). He comes across as straight, competent, and honest but I have had only very limited interaction I have had with him. So cant say a whole lot.
A) His proposal is to architect the house (he estimates one month...this is most of the work) and to get all the necessary permits from the city (he estimates 2 months...i suppose most of this involves waiting). His design plan would specify in full detail every component of the house down to the part number and manufacturer from door to electrical socket. He proposes to charge me 3.5% of the total build cost of the house.
B) He suggests I go with one of two contractors he trusts who would bid for the build of the house. He thinks they are honest and that they have little margin for using sub-standard material if he specifies everything during design.
c) The design of the apartment units are still being debated. Leaning towards a two story that is 50m2/40m2 for first and second floor. But all that is secondary. First, I am trying to understand I have the right people onboard to do this job at a fair price.

For (A), he wants to charge 3.5% of the total construction cost. Assuming I spend about $6M, that is like 210K for a 1-3 months of work. Sounded a bit high to me but maybe it is fair price for an architect doing a proper job ?
For (B), I hate the idea of paying a fixed price to a contractor. I really wish I can buy all the materials myself so I know what they are buying but he said most contractors want to bid fixed price. Their names are
-Engr. Oliver Sobere Yu – Soberesville Construction
-Engr. Jay C. Te – JET Construction

Any thoughts you folks might have on A and B ? ever heard of this architect or these contractors ?

thanks for any help in advance.
best regards,
Neal

 

Living in Dumaguete and also England I know trying to operate anything from abroad is a recipe for disaster, even being here it can be very hard to obtain quality work at a fair price.

I would consider 5 million peso to be a reasonable price for 4 units and 3'5% a honest price to produce all documents and oversee the project to completion which will take between 9 and 12 months.

 

I hope others will too come on here and comment on the absolute folly of trusting the locals with money before doing a job, i cant recommend strongly enough, do nothing unless you are on terra firma here, and even then...................man I could spend hours on this topic, but short and sweet and long and short of it is, you will loose your bollox with this especially if you know nothing at all about building, this is not america.........there are no rules and regulations here as such........if you have some cash about would it not be feasible to do what you have in mind in america, and send the proceeds to you...........................you are on an absolute loser, they will squeeze you for every peso possible

 

Hi Neal,

I really had to think long and hard before commenting. As most people know, our company owns this site and we are also in the Construction business, so though we do advertise our own businesses here, we try not to blatantly troll on it for work. I will try to answer to some of your concerns without promoting our own, lol .
Typically here it is not unreasonable for an architect to charge you 3.5 to 5% of the contract price to oversee the work, however what they usually do for that fee is handle the construction management without the use of another contractor. That he wants to charge you a management fee, then have you enter into a contract with an independent contractor, would concern me a little 9you are paying his fee, plus the markup of the contractor). A secondary red flag is that he would be "managing" or "overseeing" a contractor he regularly deals with, and I would personally wonder how close their relationship is and how truly independent he is. I guess if it were me, I would want some one overseeing , in which there are no ties. Having said that, I do know Jet Construction from a competitor standpoint, and can vouch that they usually do very good quality work and are reputable (never heard of the other contractor personally).

He is correct that most of us contractors do want to enter into a fixed sum price. Just easier and cleaner that way, however you are right to be concerned about the quality of materials. It is easy for a contractor to save a few bucks by using substandard materials, the main ones being steel or hollow block. Easy to get here, and unless you know what to look for then easy to be taken for a ride. Honestly it has even happened to us, however when we did catch on we did what it took to rectify the problems because we just do not want to be faced with the sh*t if the building fell down, regardless of how much we could have saved. Again, if you go with a guy like Jet, I think you would not have this problem.

Several other things touched on here that you need to be cautious about. If you do not get the right contractor, you will leave yourself exposed financially. Most contractors,, and sub-contractors, just do not have the capacity to finance their work. Most will have to always be asking for advances and if they underestimated the job, or something goes wrong that they have to fix, in all likelihood they will not be financially able to finish. Either you give them more money or they walk. As a contractor, when we get a price from a sub, we always allow more than what they quote to insulate ourselves from a big hit.

The other thing is having the work done while you are not here. I do not want to cut Filipinos down, but again typically a Filipino contractor doing work for a foreign client while the client is not here usually does not end up well, and not necessarily because the Filipino is trying to screw the foreigner. The problem is more related to communication, transparency and cultural differences and expectations. The Filipino may have all the best intentions in the world, however they normally just do not understand what a foreigner expects. What you or I may consider as goes without saying, is something they may not have any concept of, and most Filipinos either do not have the language and technical capabilities to communicate with you as you require to nip small problems in the bud, before they become major problems. As an example, we ourselves are foreigners so do have a better idea of what a foreigner expects as western standards but most of our clients are overseas for the better part of the construction process and even we have issues. To minimize this issue, we have web based site cameras that our overseas clients can log into and see what is happening on their site at any time. We also have site pictures taken of everything everyday and upload once a week for our clients to review. On Monday we usually start getting the emails from clients asking questions for clarification. Many times this has saved us all , lol. To make a long story short, regardless of which Filipino company you get, (and there definitely are some reputable ones in the area), they probably will just not be able to communicate properly with you overseas and odds are pretty good that when you get back , you will be in for some unpleasant surprises.

A few last notes:, Typical design fees are around 250 p/sqm, but that does not include engineering stamps, structural analysis, or fees for the building permits. Design time should be 2-4 weeks and you should get a building permit pretty quick if all the requirements are fulfilled properly. When it comes to finishing items such as tiles, granite, faucets, water heaters, etc, best to just have the builder give you a budget schedule (eg 200 sqm for tile). If someone tries to specify one now, it will probably be out of stock when it comes time to buy it. Then you are at their mercy and could get dinged with extras that may be out of whack. At least if you have the budget schedule included as part of the contract, you will have a clear baseline if you have to choose other items.

Anyway hope some of this helps Neal.

Gord

 

thanks Andy, I tried not to plug myself!

 

ps Andy, 2 story construction now by a reputable contractor will probably be higher than the 20,000 to 25,000 you quoted.

 

Dear Micheal. Thanks for much for your inputs.

Yes, it does seem it is going to be hard to manage from abroad from everyone I have spoken to. A year back I had a one contractor build a cement fence and a sliding gate for my lot and that was a nightmare to manage IN the middle of the work he took the money and disappeared for like 2months! So I know I need a better defined plan this time around. Well, that is that reason to ask here I guess.

When you say 4units for 5million pesos, what kind of unit size are you thinking about ? I was thinking of 50m2/40m2 (first/second floor) but I have heard different opinions about whether this is a good size or not for renting. Some thought it was too small especially for foreigners. Some thought I should build something smaller. Etc...

The architect did estimate 10-12 months as well. However, I am wondering why it takes so long to build something that is not a particularly large project ?!

Best,
Neal

 

Dear Shot. Thanks for taking the time to scare the s*** out of me I guess your point is that even a reputable contractor is not workable and that I really need to be on the ground.

We have some close family friends (they are a filipino couple) and the husband quit his job a few years back (had a spat with his boss) and has been looking for a job ever since (forgot how hard it is to get a job in the heat of the moment, I guess :( ). He is very honest, a licensed electrician, and also a good handyman. He does lot of jobs around my house. I was thinking of having him oversee the contractor (I would pay him). Although, it does seem like a waste to have one person be available just for this it would be worth it just to 'keep em honest'. Actually, he would be perfectly capable of selecting and purchasing the materials (I am quite concerned about sub-standard quality materials) but it seems that the bigger contractors don't you meddling in that. Which makes me think that they don't want to disclose their good margins (??)

Anyhow, I cannot afford to be there for 10 months straight (maybe a month or two max) in the coming year. So that is really the best plan I got (so far). But thanks for being brutally honest.

Best,
Neal.