I have a referral from a GC for a person looking to renovate a 2 family they just bought to:
- legalize current DOB violations for illegal renovations by previous tenants.
- refile as a legal 3 family (C of O change possibly, none currently)
- design rental unit in basement (low finish, probably not much cost)
- renovate owner's unit with new kitchen
- numerous MEP improvements, DOT sidewalk repairs, patching/tuckpointing, new deck...
>>>>>
I was trying to structure my proposal in a manner that ensured a solid profit, but still kept me competitive with other architects being priced. I am a referral, so I don't have to compete completely on price, but can't come in 40% higher obviously.
My strategy for structure is:
- Determine hourly rate for a new sole proprietor in NYC with full qualifications (I'm guessing as low as $75/hr and as high as $100/hr) and I am trying to estimate the hourly load. Something like this:
- 40 hours to measure to document and work out all EC/Demo sheets (including exterior elevations).
- 40 hours for SD (layouts, floor plans, exterior elevations, 2 meetings) - $100 x 40 = $4000
- 80 hours for DD (finishes, interior elevations) = $100 x 80 = $8000
- 80 hours for CD (millwork, details, schedules) = $100 x 80 = $8000
- 20 hours for Bid Negotiation / walkthroughs = $100 x 20 = $2000
- 30 hours for DOB / Energy Code / Filing = $100 x 30 = $3000
This seems in line with the cost of a renovation (Last similar project was bid at exactly 250 from the low bidder and 320 from the high bidder, so 25 K). However, I didn't have to work out the costs prior, they did a feasibility study. So we figured out the project cost and worked it out from there.
>>>>>>
My question to the assembled masses is, does this seem in line with market conditions in NYC/Brooklyn for a townhouse renovation? It seems high, but with the issues with the CofO, 2 to 3 family, and the evolving energy code, it might require more hours than budgeted. If so, that's okay (I can live with $75/hour ;) )
You gotta have more than one pricepoint. $100/h for principal consultation time? Sure. But for charging your client straight up drafting services? Gotta go lower than that.
You may be a sole practitioner, but you may end up picking up a freelance drafter on the side. They charge you $25-35/h and you still bill the client at $100/h? Good luck!
I would have 3 price points.
$50-60/h Call it junior drafting rate.
$75-85/h Technical services.
$100/h principal consultation service
Just like facing a bear in the woods, make yourself appear as big as possible.
^^^ Good advice. My previous contracts had two rates ($100 and $65). My only question rusty! is what market do you work in? I assume from your rates that it's a large city, but not NYC. A collegues firm (admittedly a LOT more established than my rinky-dink outfit) charged $100 for junior, $125 for mid, $135 senior, and $175 for principal. Obviously, that is probably not a possible get in this market.
1. I could pump principal to $110 and drop the rest to where you say.
2. Having also said that, the cost above comes in at approximately the 10% fee of the probable construction cost (I'm guessing 250K, a similar project came in for that), so perhaps I drop the hourly rates, but pad the time a little to give me a cushion (a lot of us, myself included are notoriously bad time estimators).
Last I worked in NYC was about 3 years ago. I worked exclusively as a spec writer and our rates would top out at $95/h. BUT our overhead was ridiculously low compared to expenses arch offices faced. So not bad. These rates have plummeted since.
We had a general idea of what our clients (architectural offices) charge their clients. It would range wildly depending on type of work and designer's name recognition. $250/h was reserved for some of our most famos clients. Or so the rumor went.
Now I'm up in Canada, (in architecture side of things) involved in projects I would only refer to as 'penny stocks'. Range is $45-90/h. Kind of sad. I'm sure others charge more, but I wouldn't know it.
One important note: 100% of projects I ever worked on were based on a flat fee (typically based on cost of construction, but not always). The hourly fees only kicked in as a provision to additional services not accounted in the original scope of work.
One more note; I worked on about a dozen or so residential developments in Brooklyn and Queens (mostly former). Each project was a disaster from day one (as far as architect's interests were concerned). From sleazy developers, to incompetent subs, to building materials that must have come from Soviet era surplus warehouses.
Your project sounds slightly different (not a new construction development), but I would still do my best to protect myself (in writing).
Design work on fixed fee based on a percentage of the budget with allowances (up only) for changes in scope. Use the GC to establish a workable budget. Administrative work on time, check current rates for expediters. Dealing with the municipality can be a black hole, you may want to farm it out. I often use an expediter that the client pays directly.
Thanks for all your help. The budget is actually quite small and 10% wouldn't really make sense with the scope, so I have given them a flat fee feasibility study to ascertain the costs better so that we can make sure the project is viable at their budget.
Incorporated rusty!s idea on fee by task (used to do this standard, I go back and forth) for hourly rates, but it's only a 'services that exceed' upset, so it won't be charged/paid.
Miles - punted the full proposal until we have an idea of what their budget will allow. For the issues they're facing, 12% + a small kick for violations will be the deal. Hopefully the study will make it viable.
Thanks guys!
Aug 30, 11 2:46 pm ·
·
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.
Structuring a proposal for a townhouse in Brooklyn
I have a referral from a GC for a person looking to renovate a 2 family they just bought to:
- legalize current DOB violations for illegal renovations by previous tenants.
- refile as a legal 3 family (C of O change possibly, none currently)
- design rental unit in basement (low finish, probably not much cost)
- renovate owner's unit with new kitchen
- numerous MEP improvements, DOT sidewalk repairs, patching/tuckpointing, new deck...
>>>>>
I was trying to structure my proposal in a manner that ensured a solid profit, but still kept me competitive with other architects being priced. I am a referral, so I don't have to compete completely on price, but can't come in 40% higher obviously.
My strategy for structure is:
- Determine hourly rate for a new sole proprietor in NYC with full qualifications (I'm guessing as low as $75/hr and as high as $100/hr) and I am trying to estimate the hourly load. Something like this:
- 40 hours to measure to document and work out all EC/Demo sheets (including exterior elevations).
- 40 hours for SD (layouts, floor plans, exterior elevations, 2 meetings) - $100 x 40 = $4000
- 80 hours for DD (finishes, interior elevations) = $100 x 80 = $8000
- 80 hours for CD (millwork, details, schedules) = $100 x 80 = $8000
- 20 hours for Bid Negotiation / walkthroughs = $100 x 20 = $2000
- 30 hours for DOB / Energy Code / Filing = $100 x 30 = $3000
- 15 hours punchlist / signoffs = $15 x $1000 = $1500
total = $26,500
- CA hourly at rate as an upcharge.
>>>>>>
This seems in line with the cost of a renovation (Last similar project was bid at exactly 250 from the low bidder and 320 from the high bidder, so 25 K). However, I didn't have to work out the costs prior, they did a feasibility study. So we figured out the project cost and worked it out from there.
>>>>>>
My question to the assembled masses is, does this seem in line with market conditions in NYC/Brooklyn for a townhouse renovation? It seems high, but with the issues with the CofO, 2 to 3 family, and the evolving energy code, it might require more hours than budgeted. If so, that's okay (I can live with $75/hour ;) )
Thoughts? Thanks in advance!
You gotta have more than one pricepoint. $100/h for principal consultation time? Sure. But for charging your client straight up drafting services? Gotta go lower than that.
You may be a sole practitioner, but you may end up picking up a freelance drafter on the side. They charge you $25-35/h and you still bill the client at $100/h? Good luck!
I would have 3 price points.
Just like facing a bear in the woods, make yourself appear as big as possible.
^^^ Good advice. My previous contracts had two rates ($100 and $65). My only question rusty! is what market do you work in? I assume from your rates that it's a large city, but not NYC. A collegues firm (admittedly a LOT more established than my rinky-dink outfit) charged $100 for junior, $125 for mid, $135 senior, and $175 for principal. Obviously, that is probably not a possible get in this market.
1. I could pump principal to $110 and drop the rest to where you say.
2. Having also said that, the cost above comes in at approximately the 10% fee of the probable construction cost (I'm guessing 250K, a similar project came in for that), so perhaps I drop the hourly rates, but pad the time a little to give me a cushion (a lot of us, myself included are notoriously bad time estimators).
Again, thanks rusty!
sundan,
Last I worked in NYC was about 3 years ago. I worked exclusively as a spec writer and our rates would top out at $95/h. BUT our overhead was ridiculously low compared to expenses arch offices faced. So not bad. These rates have plummeted since.
We had a general idea of what our clients (architectural offices) charge their clients. It would range wildly depending on type of work and designer's name recognition. $250/h was reserved for some of our most famos clients. Or so the rumor went.
Now I'm up in Canada, (in architecture side of things) involved in projects I would only refer to as 'penny stocks'. Range is $45-90/h. Kind of sad. I'm sure others charge more, but I wouldn't know it.
One important note: 100% of projects I ever worked on were based on a flat fee (typically based on cost of construction, but not always). The hourly fees only kicked in as a provision to additional services not accounted in the original scope of work.
One more note; I worked on about a dozen or so residential developments in Brooklyn and Queens (mostly former). Each project was a disaster from day one (as far as architect's interests were concerned). From sleazy developers, to incompetent subs, to building materials that must have come from Soviet era surplus warehouses.
Your project sounds slightly different (not a new construction development), but I would still do my best to protect myself (in writing).
Appreciate all of above rusty! Thanks!
Design work on fixed fee based on a percentage of the budget with allowances (up only) for changes in scope. Use the GC to establish a workable budget. Administrative work on time, check current rates for expediters. Dealing with the municipality can be a black hole, you may want to farm it out. I often use an expediter that the client pays directly.
Thanks for all your help. The budget is actually quite small and 10% wouldn't really make sense with the scope, so I have given them a flat fee feasibility study to ascertain the costs better so that we can make sure the project is viable at their budget.
Incorporated rusty!s idea on fee by task (used to do this standard, I go back and forth) for hourly rates, but it's only a 'services that exceed' upset, so it won't be charged/paid.
Miles - punted the full proposal until we have an idea of what their budget will allow. For the issues they're facing, 12% + a small kick for violations will be the deal. Hopefully the study will make it viable.
Thanks guys!
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.