Proceed with caution when selecting a contractor

Improving your home is a sound investment if done wisely.  These days, it’s difficult to differentiate the Service to Value Ratio (SVR) of remodeling contractors.  So we must be cautious.  SVR is measured by the following formula:

cost of goods and services
-------------------------------      =     value of improvements
     risk of relationship

The cost of goods and services is reliant on a thorough and accurate estimate.  Consumers should check with a contractor’s references to verify the historical accuracy of initial budgeting or estimating.  If you receive a consistent message, factor accordingly for your financial planning.

Risk of relationship is a function of the contractor’s financial solvency and their commitment to customer advocacy.  For a contractor to be financially solvent, they should be debt-free and operating at a profit on every job.  Unprofitable businesses typically do not survive long enough to be able to service their customers.  Some may go out of business in the middle of a job.  Because only happy customers become advocates, find out what your prospective contractors are doing to retain customers and make them advocates of their services.  Consider the amount of risk you are willing to take with an unknown resource and work out the worst-case scenario for the purposes of this formula.

Value of improvements is the cost of goods and services, divided by the risk of relationship.  If the cost is low and the risk is high, chances are your value will be very low.  If the cost is high and the risk is low, then chances are your value will be high.  Because of these variables, value is a relative term.  High value is often perceived as lifestyle enjoyment and improved resale value.

Deals and discounts on consumer products are conditioning our buying habits for professional services.  The problem is not so much that there are fewer home improvement projects to be had, but that undereducated consumers get caught by surprise when they find out their contractor is not performing with their best interest in mind.

Protect your investment and proceed with caution.

How much green does it take to go Green?

If you have been considering improving your home with “green” products, you’ve certainly noticed the cost is considerably more than their standard counterparts.  Because the products and techniques are not yet mainstream, they do cost more.  How much more depends on quantities, dependencies and individual conscience.

The three major components of building green are: 1) energy efficiency (measured in both in the effectiveness of the climate control device and the ability for the house to maintain temperature), 2) renewable products (short growing cycle or made from recycled materials) and 3) sustainability (low maintenance and ability to operate “off the grid”).

When renovating an existing home, it is unrealistic to expect a positive return on a green investment.  The decision to reduce the “carbon footprint” of your home is largely based on your desire to be environmentally responsible.  The more green you are willing to go may lead you into a series of dependencies, which begs the question: where do you stop?

For starters, some good cost-to-value improvements include complete window replacement, high-efficiency furnace, attic insulation, Energy Star appliances, low-flush toilets and gas insert fireplaces.  Do some homework before selecting your solutions to avoid adding grief to the amount of green you are budgeting to spend.  Click the Consumer Resource tab on my website for tips on selecting a contractor.

For more information about this topic and a list of resources visit www.builtgreen.net.

Michael Tenhulzen, CGR, CAPS is President of Tenhulzen Remodeling in Redmond (425) 885-9871 www.tenhulzen.com.

Mothers Day deliveries

Moms rule the house.  Without them, our business would be entirely different.  It is for this reason that Tenhulzen Remodeling is proud to announce that over 30 of our selected customers from the past couple years received a special delivery today:  A Mothers Day flower arrangement and gift of our Silver Premier Residential Services membership.

Happy Mothers Day to all the moms within reach of this message.  Especially to my mother and to my wife.

Michael Tenhulzen, CGR, CAPS
President, Tenhulzen Remodeling, inc.

May e-zine

The May issue was released 5/2/11.  Click here to subscribe.

Injured Reserves

These days, there's a running joke at TR about crutches for our field crew.

An icy parking lot in December claimed one for 6 weeks.  In late March, a routine arthroscopic knee surgery turned a 5-day recovery into 6-8 weeks. for another  And an ankle strain mid-April forced light duty for about a week for a 3rd.

Now our President will be going in for foot surgery on May 6th.  When he's off crutches in 5-6 weeks, we'll either have the best 3-legged race relay team, or looking for other uses for used crutches.


Best suggestion for use of old crutches recognized in the June 2011 Newsletter.

April e-zine

Tenhulzen Remodeling's April Newsletter is out.  Click here to view content.

Eligible Tax Credits

Doing More with Less

Aging Options
Get in the Loop

Earthquake Preparedness

Aging Options

The Accessory Dwelling Unit (ADU) has become a popular alternative to senior living facilities.  This short video is an interview earlier this week with an ADU customer.  Construction completed in 2006 as an attachment to the existing garage.  This photo was taken mid-project.

Financing of an ADU is typically the elderly parents paying for the projects on their childrens' property.  The result is a transfer of wealth that offers multi-generational opportunities.  The ability to perform these long-term living spaces is a result of CAPS training for our design and sales staff.

Feeling Lucky? (after Japan)

As the month of March comes to an end, so does our "luck of the Irish".  Or does it?

The pattern of earthquakes around the Pacific Ocean's "ring of fire" causes some geologists to pick the west coast of the U.S. to be next, as indicated by this video.

Seismic retrofitting may help reduce the damage sustained.  At best, it should keep the foundation on the house.  Structural engineers and building inspectors deem a house uninhabitable if it has come off its foundation.

We recommend these resources:
Pacific Northwest Seismic Network
USGS - Past 30 days of Earthquakes
Earthquake Home Retrofit Contractors

Analyzing the Risk of Home Improvement

One good thing about an economic recession is how consumers decide which businesses succeed, which ones struggle, and which ones fail.  Although our human response to failing companies is a deep felt sympathy, we also recognize survival of the fittest as one of the laws of nature. When it comes to home improvement, there are a variety of factors that determine which ones are destined to succeed and which are likely to fail.

Risk is typically measured in terms of potential for financial reward.   When assessing your risk of remodeling, however, an expanded range of metrics should be considered.  This article addresses some of the internal metrics renovation experts live and die by.  They include Lead Sources, Solvency, Profitability, and Customer Satisfaction Rating.

Lead Sources include all the ways prospective customers make contact.  This metric is indicative of how “visible” a company is.  Happy customers love to refer their contractor to their friends.  If a significant percentage of leads come from advertising alone, the contractor may not be providing adequate customer service.  Conversely, if relying completely on customer referrals, the circle of influence could dry up.  Similar to an investment portfolio, a contractor’s lead sources should be quite diverse.

Solvency is the company’s ability to sustain itself through careful planning, scheduling and job cost analysis.  Debt liability and backlog are indicators to how “healthy” a company is.  Needing a down payment today to pay suppliers for a prior job is a very risky business practice.  Instead, ensure your payment schedule is tied to the forecasted expenses for your project.  To reduce your risk, ensure your contractor is licensed and bonded, and allow your attorney to review the contract language.

Profitability is a function of sales price, minus cost of goods sold, minus operating overhead.  It differs from solvency in that each customer’s job should be accounted for independently from any others.  It’s good to know that your contractor will be profitable on your job to ensure they are able to warrant and service the product.  Furthermore, that they are consistently profitable on all of their projects.  This indicates good execution of their process, and supports solvency.

Note that in a competitive market, contractors will attempt to “under bid” the scope of work just to get the job.  In this case, the only way to become profitable is to up-charge the customer through the course of design or construction.  To reduce your risk of “budget creep”, query your contractor about the accuracy of their budgeting relative to the past several projects, and ask to speak with those customers about their experience.

Customer Satisfaction Rating is difficult to assess, unless performed by a 3^rd party.  “Happy” customers are generally pleased to write a recommendation, whereas unhappy customers feel compelled to write a warning to others.  If you are skeptical about the written recommendations provided by the contractor, I suggest searching online resources for posted reviews.

Looking for the best deal is not as opportunistic as it was going into 2009.  Prospective remodeling customers are becoming less likely to shop contractors based on price.  It’s almost as if word has gotten around that the best deal expects the worst experience.

Risk assessment is all about knowing what you’re getting into before it happens to you.  In most cases, remodeling customers find there is one constant.  That is: you get what you pay for.

February e-zine

This month's issue features construction terminology and explores alternative lending solutions.

Tenhulzen Customer Gets A Free Ride

Traci and Michael Tenhulzen are volunteer alpine ski patrollers at Summit Central on Snoqualmie Pass.  Stabilizing and transporting injured snow riders is a no-charge service on the mountain.  In this case, the injured got more than they bargained for.

While actively patrolling on a Saturday afternoon in January, Traci responded to an incident.

Upon arrival, Traci and two other patrollers discovered the patient was suffering from a broken clavicle (collar bone).  After stabilizing the injury, the patient was carefully loaded into the toboggan in a seated position to improve comfort during transport. 

Traci climbed in the toboggan and secured herself back to back with the patient, who was taken into the first aid room and questioned for the required paperwork.  During the inquiry, Traci recognized the name and address as being one of our recent remodeling customers.  Michael arrived just as the injured's spouse came into the building.

Our bandaged customer smiled through the embarrassment  of the ordeal and said "I hope this doesn't end up costing more than our remodel."  Michael thought for a moment and replied, "I hope your remodel wasn't nearly as painful."

After caring for the public on a routine basis, it's nice to know familiar faces can count on us to take care of more than just their homes.

January 2011 Newsletter

Residential Building Mandates, Bellevue Homes & Lifestyles Show and more in this issue.

Happy New Year to all!

Powerless During Winter

Losing power in the middle of winter is not the ideal situation.  Having a safe & reliable backup generator can make your outage much more enjoyable.

Share your story about winter outages to help others prepare....

What's the Worst that Could Happen to Your Home This Winter?

This winter, a La Nina pattern is expected to produce colder and wetter conditions than normal.  We know what this weather pattern means to our daily commute, but [more]

Rushing into uncertain future?

The past 2 1/2 years have been economically stormy.  With brighter days ahead, how prepared will we be to accommodate the rush?

Because Tenhulzen Remodeling has been the current size and twice the current size, it seems the secret is scalability.  Process and procedures remain constant at various levels of productivity.  With scalability, finding the balance points between gross volume and number of employees are relatively easy.

The real challenge becomes finding and hiring the right people.

November Newsletter - Election Edition

November's monthly e-Zine focuses on political housing issues and preparing for a La Nina winter.

Also, congratulations to Rob Stevens for drawing the winning raffle ticket at the October Open House.  Next Open House March 30th.

Vote for housing-friendly candidates

Housing-friendly candidates in King County help to keep housing affordable. Legislation that adds cost and complexity to building and renovating single family homes are simply passed on to the consumer.  Housing-friendly legislators understand how the industry works to maintain sustainable and affordable communities.

2010 Remodeled Homes Tour

Good turnout, excellent quality of prospective customers.

Each year, a Saturday and Sunday tour of some of the finest renovators in King and Snohomish counties put on a tour of completed remodeling projects.  The event allows for the public to tour what cannot be portrayed in photographs.

This year's Remodeled Homes Tour was organized largely on the West side of Lake Washington.  Our home was situated on the SE portion of the Sammamish Plateau.  And although only receiving 40 guests during the 2-day show, we had a lot of enthusiasm about our quality of work and Design Build process.

Four appointments were set during the show and 3 others pending.  Out of some 20 couples, a 14% yield is higher than we've received in many years.

We look forward to showcasing more of our work to the public throughout the year and at the 2011 RHT.

Open House - October 2010

This is the 3rd Open House TR has hosted this year.  May was a wonderful turnout of Redmond business leaders.  The date in July was so that the A/C registers became the main attraction.  Last night's event yielded the nicest weather of the week and certainly included a wonderful group of people.

Frederick's Appliance donated a $400 wine chiller that was raffled off at $10 per ticket.  With his single chance, Rob Stevens won out of a field of 23 ticket buyers.  The total of $230 was given to Ezzy from HopeLink, the charity of choice, who made a gracious presentation about how their organization helps the community.

Our next Open House will be in April of 2011.

October Newsletter

This month:
Protecting your home from the increased rate of home burglaries.
Online consumer information sources.
Home improvement events.
Caption contest winner