Remodeler Alon Toker's system was a perfect fit for clients Mike and Alice Sloan. Mike Sloan is an accountant who was more interested than most clients in the down-to-the penny cost of each item installed in their small cottage remodel. “It's tough to spend money,” Mike says. “You want a contractor who understands business.”
For his part, Toker, president of Mega Builders in Chatsworth, Calif., says his company excels in design/build work in part because its systems help manage homeowner expectations.
The Sloans bought the 850-square-foot house in 1999. They liked the cozy three-bedroom house, but it was outdated and lacked storage space. Though they knew they wanted to remodel, it was important to them to maintain the house's charm. They originally envisioned a modest, $50,000 update but then stepped back to consider a larger project. “We thought about adding a second story, but did not want steps in case we stayed in this house through retirement,” Alice says.
A client at Mike's firm had worked with Toker on a project. Because that client had previously had bad experiences with other contractors, Sloan's firm hired a private investigator to conduct a profile on Toker. “Not only did we come through with flying colors, we did the work and the client was thrilled,” Toker recalls.
Design Decisions Toker gave the Sloans three design options. As he sometimes does for his clients, Toker included a ballpark cost for each design based on his experiences with similar projects. “I include a disclaimer that says these figures are guesstimates, because they don't include engineering or full product specifics,” Toker says. Providing ballpark figures prevents the sticker shock many clients feel during the bidding process, according to Toker. “We tell people: You hire us for beautiful design, you give us budget guidelines, we design to those budget guidelines,” Toker says.
When he finalizes construction documents, the remodeler allows clients to use them to get other bids. “If we did our job well, all other competent companies should be in the same ballpark,” he says. “But our hope is that you spent time with us — you have an idea of how well we communicate. For an additional competitive advantage, we also credit back 50% of our design fee toward the construction contract.”
The Sloans decided to upgrade the living room and the kitchen, remove one of the bedrooms to provide for larger rooms, and extend the back of the house by 14 feet.
The project took 18 weeks to complete. The Sloans moved into a nearby apartment so they could visit the project daily. Their construction contract was for $170,000, which included the kitchen and living room cabinets. In addition, they spent $40,000 on products and some outside subcontractors. Unlike many design/build remodelers, Toker allows his clients to purchase products and pay subcontractors directly.
To finance the project, the Sloans went to a bank Toker recommended. Toker uses the institution for his own speculative project loans and says they are competent and competitive. He usually mentions this option to clients. “I look at financing as added value. The more value I can bring to the table, the better I stand up in the mind of the prospect,” Toker says. Though it is a common practice in the finance industry to provide the contractor with a referral fee, he does not accept one. “Instead, I ask them to make the loan more competitive,” Toker says.
