Posted by Jim Locker on December 16, 2000 at 16:25:07:
Very good post. Lots of good lessons there.
These are all lessons I have learned over the years…the hard way.
Newbie - Posted by Ray
Posted by Ray on December 15, 2000 at 21:25:30:
I am in the middle of my first rehab, I hired the contractor from hell. I thought I had it covered, I had a contract that covered the price and the work to be done, but not time frame. The money part was some upfront and the balance upon completion. The contractor gave me a sad story about half way through about needing money, so I gave him some. We discussed that the job would take about 4 weeks, he was on the job about 3 weeks and when I gave him that money. The job seem to start to go slower, and I started to get another sad story from the contractor about needing money and how the job was going to run over the contract price. I immediatly had a meeting with him at the house and told him there would be no more money until the job was complete as per the contract. To make a long story short after about 3 hours of discussion, we came to an agreement on how much he had in the job, I gave him that and told him to pack his stuff and leave. I am pretty lucky that I am able to finish the work that needs to be done by myself. My question is did I do the right thing. I feeling after my conversation with the contractor that if I held him to the contract he would have took for ever and cost me more money.
Re: contractor the last 40 years - Posted by Cork Horner
Posted by Cork Horner on December 16, 2000 at 20:03:43:
Wellll, you guys sure like to beat the trades and contractors to death, huh? The posts here on this topic are much like the seven blind indians all describing an elephant from different locations.
In my experience, what goes around comes around, treating others with equality and respect will accomplish miracles when it comes to results.
All the tradespeople and contractors are not " sleazebags" and worthless neer-do-wells. Many have been bankrupted by ’ honest customers’. Believe it.
A little logic and rational procedures can be productive in any project including repair and remodelling. Who knows what is in the walls?
Some of the best workers have no licenses and some of the worst workers have licenses. Due diligence?
A good place to start is to actually know the laws and conditions in your city and state regarding permits, what is illegal work, what are the workmans comp laws, what are ’ independent contractors’status conditions, [ you can be hit as an employer] Just because a ’ contractor’ has a license does not guarantee much, especially in California.
Believe it or not, there are tradespeople and contractors who give far more than they get paid for. You just have to know how to find them and keep them like jewels when you do.
To all the christian readers and lurkers I propose that we all remember that Jesus is the reason for the season? I perceive that many tend to forget we are all on this planet together.
Contractors (Long) - Posted by JPiper
Posted by JPiper on December 16, 2000 at 09:59:04:
Ray:
They?re ALL contractors from hell Ray?.and don?t you ever forget it! Their purpose in life is to milk you for money and drag your job out. We?ve all had the experience, and frankly, for your first rehab I think you did remarkably well. Just don?t make the same mistake again (like I have!).
What I probably would have done differently given the situation that existed when you had your last talk with this guy, is that I would NOT have paid him a dime. Here?s why: when you hire the next contractor to come in and finish that job, it?s going to cost you more?.because they?re going to sense your ?desperate? situation?..it?s part of ?How To Be A Contractor 101?. Or the alternative is to do the work yourself now because the guy has gotten you into a bind and you don?t have time (or money) to get the next contractor. Either way, this contractor didn?t do what he said he was going to do. Before making any final payment to a guy not completing the job just get the job completed, and THEN DEDUCT what you had to pay from what he was owed.
Below BillW gives some good advice. If you?re going to deal with a general contractor it?s imperative to have a written agreement, with a beginning date, ending date, and a penalty clause. I would also have a termination clause, one that sets forth how you?re going to go hire a guy to finish BEFORE you make any final distribution in the event that he?s not doing what he said he was going to do. You should also have a clause that provides for changes in the job and how they will be handled. These should also be handled in writing, and unless a change is signed by you, it becomes the responsibility of the contractor.
Now here?s the larger problem in my opinion. If you?re going to do rehabs, you?re going to have contractor problem! Period! It?s the way it is. You can put ANYTHING you want into a contract, and it may not be worth the paper it?s written on. Why? Because most of these guys are lowlifes. Your contract, even if you?re right, is going to become non-collectible because the guy won?t have a pot to p*ss in. The only way your contract is REALLY going to have meaning is when you?re dealing with a LARGE contractor who is going to charge you more than the project can bear.
I?ve gone away from these ?general contractors?. Instead, I?ve moved toward hiring my own people to do specific jobs. As an example, if I need an electrician I hire an electrician. If I need a plumber I hire a plumber. Painter? I hire a painter. A rehab I just completed is a case in point. The house had major plumbing problems stemming from old water and waste lines in a second story bathroom. This had created major ceiling and wall damage on the first floor. So I hired a plumber who made a bid on the plumbing. He felt he could do this job in one week. So my deal was fine, I?ll buy the materials?.at the end of one week when you?re done I?ll pay you. He squawked a little about how he?s been burned by people not paying, I squawk a little about contractors not performing. I point out that I will be into the deal for materials. That I OWN the house, so obviously I?m collectible?.in fact I say, the only guy standing here who might not be collectible is YOU. So he finally agrees and starts soon afterward. I meet with the electrician who quotes me $975 to do some work?.I get him down to $850. He wants upfront money. I tell him that violates my policy. He tells me he?s been burned. I tell him I?m more worried about HIM than he is about me. He finally agrees to start?.comes in with a helper and bangs the job out. I pay. I then hire him to go over to another job?.for $750. He doesn?t bother to ask for upfront money.
Meanwhile, the plumber is SLOW. The first week the plumber only works 2 days. He comes to me and asks for money. I remind him our deal is HE does the work, he gets paid. I don?t pay for ?work in progress?. He needs money then he needs to finish the job. The guy starts in again (he?s now into the job for time for which he hasn?t been paid). He gets in a couple of more days and comes to me and says ?he?s hungry?. By this time he?s well down the road, but not finished. So being the big-hearted guy that I am I advance him $100.
The plumber is far enough along that I can bring in a painter who also does great wall repair. This guy goes to town. The plumber is still plugging along SLOWLY. Finally, the plumber calls me, tells me he had to take another job because he needed to make some money. He’ll be back in a few days as soon as he’s finished. I fire him?.tell him to pick up his tools. I have another plumber hired by the next day. Now this new plumber is more expensive, but then again a good part of the work is already done?.so my costs are still going to be in line because I?m going to DEDUCT what this new plumber costs me from what the original plumber ?might? have been owed.
When the original plumber shows to get his tools, he tells me I owe him. I tell him our deal was for a completed job. I tell him I?ve hired another guy, and when that guy is finished if I have any money remaining from the plumbing job I will pay him that difference?.but no money until then. He squawks about not getting paid?.I squawk about not getting my job done according to our agreement.
In the end, the MONEY CONTROLS. You have to stay ahead of the contractor on the money to stay IN CONTROL.
Now here?s another element in all of this. YOU need to know what?s happening in order to be in control of your job. YOU need to understand how the job is supposed to go. Now of course, that?s almost impossible. But you can educate yourself. For example, Home Depot puts on all kinds of free clinics on how to do things. Attend some of them. You can get all kinds of how to books, watch programs on TV. I?ve spent hours watching these guys DO the work. This is important because the more YOU know, the less these guys will try to take advantage of you. Every job has a right and wrong way. Every trade has certain principles. The more you educate yourself, the better off you are. That combined with a STRONG STANCE will get you along way down the road when you?re dealing with contractors.
Finally, note that when you?re dealing with subcontractors, you?re ONLY paying for completed jobs at the appropriate stage of the project. AND your project is not riding on ONE guy.
JPiper
Re: contractor problem - Posted by BillW.
Posted by BillW. on December 16, 2000 at 08:10:43:
Ray,
You were 100 percent right in my opinion. I have had many dealings with this type of in-duh-vidual. They will play you for a fool and it will take much longet to get dne and cost much more. There are competent, honest people in the contracting world, but the trades are also full of incompetents and rip-off’s. To find the good ones here are a couple of tips:
- Always go and look at current jobs in progress. NEVER rely just on references. Bad people will give references that are cousins or friends only and ,of course. those people will say they’re great. Look at jobs in progress and talk to thise owners.
- NEVER, NEVER, NEVER give more than 10 percent of the job price as a downpayment or $500 bucks, whichever is LESS. Otherwise, you will be “behind” the progress curve. This is a dangerous situation to be in.
- ALWAYS give progress payments from a fixed, predetermined schedule. Never more. No advances for any reason.
- ALWAYS have a completion clause AND a SUBSTANTIAL late penalty of at least $300 PER CALANDER DAY. ALWAYS enforce it. Otherwise, you will hear all types of creative excuses.
- DO NOT WORK WITH ZERO BALANCE OPERATORS!!! Any real contractor has an account at the material house. They buy materials and pay for them when they get their statement at the end of the month. Beware of anyome who asks for money for the materials up front.
If you really want someone to work for you who has no material account, have all materials dropped COD from the material house and write the check to the material house yourself.
Do not allow the “contractor” to charge materials on your account.
6.Require the contractor to cleanup on a daily basis and at the end of the job. Otherwise they will always leave the mess for you. Make the final payment dependent on your approval of the entire job, including cleanup of everything and removal of all excess materials.
Good luck, take control and you’ll do fine.
BillW.
AMEN! - Posted by JHyre in Ohio
Posted by JHyre in Ohio on December 18, 2000 at 11:19:51:
Excellent post, even by the high standards to which you hold yourself. I’ve learned this lesson the hard way, and am far less flexible, nice and understanding than I once was. Money- MY money in particular- talks. I just switched to the system you described- firing the losers, hiring subs for specific tasks, providing the materials upfront and no pay til completion…the results have been excellent, less cost, better work, done faster. I could’ve listened to common sense (or Ed Wachsman) and done things this way from the get go…but that would’ve been too easy. Sometimes ya gotta learn the hard way!
Again, great post and SOOOOOO true…newbies would do well to heed this advice!
John Hyre
Re: Contractors (Long) - Posted by Michael
Posted by Michael on December 17, 2000 at 23:43:24:
We’re not all Contractors from Hell. I am a fellow investor and a Licensed Home Builder and Remodeler. I put Customer Service and Satisfaction first. You can call every customer I’ve ever had and they will tell you that I exceeded their expectations and that I call them periodically, to make sure everythings going well.
Recently, I built a home and sold it. I was building another home in the area and one day noticed that between the porch and sidewalk, water was sitting after a hard rain, several plants had died from drowning. I had the entire flowerbed stripped, brought in several yards of top soil to elevate it, and replanted the flowerbed with new shrubs.
This was after the home owners asked me to build them a brick mailbox, which they have yet to pay for.
If what you are saying is true that EVERY contractor is a contractor from hell…Is EVERY Real Estate investor a crook trying to steal your home away, in your time of need…Is EVERY black a criminal…Is EVERY homeless person a misrable bum.
Mr. Piper I’ve seen many of your post and you seem to have much knowledge and wisdom, and though I disagree with the stereotyping of General Contractors, I agree with the rest of your post, and they are good rules to follow.
I would also like to add, before you hire your own subcontractors, try and get several reputable references, and you could find yourself avoiding those plumbers who don’t get the job done.
Re: Contractors (Long) - Posted by jasonTX
Posted by jasonTX on December 17, 2000 at 09:56:42:
Another subject worth mentioning is loyalty. My father owns a plumbing company and his repeat customers get “special consideration”. That means a job that normally takes 5 days can magically be done in 3 days if one of his devoted landlords/builders/individuals/insurance agents calls and needs it done in 3 days. He also does little “freebies” for his big customers. A property Management company that has over 300 properties uses him exclusively. Why, because if all he has to do is replace a 5 cent washer, he doesn’t charge them. The bottom line is when you find a quality contractor, treat them like gold and give them as much business/referrals as you can and they will do the same for you. The challenge is finding a good, reasonable contractor.