'Turn-key Construction' Nails Down Costs to the Penny

BRENTWOOD -- When Alan Looney sits down with clients to plan a house, they choose more than colors, appliances and finishes.

Looney works with clients strictly on a turn-key basis. This means that absolutely everything, down to the toilet-roll holder in the bathroom, is chosen and priced before one shovel of dirt is moved to build a house.

The pre-planning process is mind boggling, but pays dividends in the end by ensuring that the homeowners know exactly how much it is going to cost to build their home -- there is never a surprise at closing. Looney creates a precise schedule for subcontractors. Materials are ordered and on site before the subcontractors arrive. Streamlining the process with such precision ensures that the owner pays less in construction loan fees for dead time and keeps Looney's Castle Contractors crews working to maximum efficiency.

Looney credits his savvy to state-of-the-art communication and budgeting software technology.

Danny Hester, Looney's banker for about 10 years and a vice president of residential construction lending at AmSouth Bank, credits Looney's success to his mind-set as an engineer.

Looney has an industrial engineering degree. His use of the sophisticated budgeting software as well as meticulous front-end planning alleviates cost overruns, according to Hester.

"He is one of our best customers. He does as much budgeting and cost analysis as anyone we work with. We don't like surprises," Hester says.

Just about the only variable in price is if there is rock directly under the building site that could not be detected during the engineering phase and a 2 percent adjustment if building material prices increase during the ordering process, Looney explains.

"I never build the same house twice," Looney says. "The key to the success is communication. The owner always knows where they will be in the process."

To illustrate his point, Looney pulls out three oversized and overstuffed notebooks filled with details about one house. Throughout the process clients can log onto the Castle Contractors' Web site (www.castlecontractors.com), type in their password and look at every single detail and schedule of their project. For example, if a client forgets which faucet she chose for her guest bathroom, she can look it up on the Excel spreadsheet. Then she can click on the link to the manufacturer and see a photo of the faucet, check the price and see when it will be installed.

The Web site is updated every two weeks. There is even a weather report link for each client to be able to monitor the weather. The communication is streamlined to the point that Looney has had clients actually take vacations to Europe during the last few months of construction. They check in through the Internet on their home's progress.

"It's like picking out a custom car," Looney explains. "You tell the dealer what you want and that is exactly what is ordered." He also compares it to grocery shopping and choosing products off of a shelf.

His wife, Heather, is an interior designer who works closely with clients to ensure that every choice they make fits into their overall vision of the house and that the individual products work together.

After all the choices are made, Looney and his staff create a PowerPoint presentation for the clients. At this point there are approximately 108 cost codes for the project. The presentation is made "before we ever sign a contract." There is, however, a pre-construction contract, paid upfront, for the plans and landscape design. Only once in all of the years of working this way has Looney had a client decline to go forward after the pre-contract phase.

Although it is not mandated, every one of Castle Contractor's projects includes an engineering plan that takes into account all aspects of placing a building on a piece of property. At this time, contractors in Williamson County are only required to have an engineering plan if the site is a "critical lot" or has drainage issues, according to Looney.

From the moment that the site is being prepared until the completion of the project, Castle Contractors records the progress through hundreds of photos. These photos are not only useful in helping to promote clear communication with everyone involved in the process, but can also come in handy years later when the owner wants to make a change. For example, if wiring in a recessed light needs to be changed, photos will show exactly how the light is wired from within.

Castle Contractors completes seven or eight projects per year. The projects are staggered to fit a slot schedule. Looney plans to start only one house per month at the most. This makes scheduling of subcontractors practical. He also only builds in a relatively small portion of Middle Tennessee -- mainly the Brentwood and Green Hills areas. This decreases travel time for the workers between jobs and makes the process more streamlined and time efficient.

Most homes are custom projects, but Looney does built a couple of spec houses each year as well.

"I want to build nice, quality homes. I don't care about building the biggest house," Looney explains. That is the case for his submission this year in the Middle Tennessee Home Builders Association Parade of Homes. In October he will have an English Country-style home on tour in the Annandale Community for $1.85 million.

Most of his houses average 5,000 to 6,000 square feet. He has built houses up to about 8,000 square feet. The company's projects range in price from $700,000 to $2 million, with the average being in the $1.2 million to $1.3 million range, according to the builder. The architectural style is usually French, Country or Tudor.

A recent project is the French Tudor home he built for Andrew and Inna Park, who moved to this area from New York and moved into their new home about a year ago. The home was featured in Nashville Interiors magazine, according to Andrew Park.

Although the Parks did not choose Looney on the basis of his turn-key business plan, "I can't really imagine doing it a different way," he says now, noting they appreciated Looney's approach and his perspective as an engineer.

Looney belongs to the National Association of Home Builders, whose peer group studies he credits as a big part of his success.

Castle Contractors LLC, headquartered in Brentwood and in business for nearly two decades, is also a member of Middle Tennessee Home Builders Association, Williamson County Home Builders Association and the National Association of Home Builders Foundation.

Freedom of choice

If interested in building a "turn-key" house, these are just some of the categories that a client must make decisions about before the actual process can begin. At Castle Contractors, clients can log onto the Web site and monitor daily progress in each of these categories:

Lot cost, Architectural plans, Plumbing, Electrical (number of outlets, kind of switches, choices of lights), Roofing, Brick, Stucco, Windows, Doors, Flooring, Tile, Trim carpentry, Closet shelving, Mirrors, Chimney