Home Improvement

Oldbased

Oldbased

> Than U
28,552
67,649
We are not talking about large business here, or even local big name contractors. We are talking the guy who probably runs his operation from home and thus gave him the most reasonable bid and had good references. This isn't a commercial job, bid contract job or even a large remodel. Chances are the guy is going to need some cash for materials if nothing else. That is a norm in that sense. If you don't like that norm, pay the additional 20% O&P the bigger names have. It is that simple.

I worked at a restoration firm for 4 years, ran a statewide contracting company for 3 in TN who did nothing but state bid contracts and both worked as you said, but my other 20 years or personally running a business tells me the other side as well.
If the dude requests a partial draw for materials and can show the materials/cost he needs then there is nothing wrong with that. Otherwise like I said be prepared to use the larger name contractors with the higher bid.
 
iannis

iannis

Musty Nester
31,351
17,660
Olebass_sl said:
If the dude requests a partial draw for materials and can show the materials/cost he needs then there is nothing wrong with that. Otherwise like I said be prepared to use the larger name contractors with the higher bid.
Click to expand...
Oh, that wouldn't raise any red flags to me either, as long as he's willing to copy me the invoice and gives me a piece of paper I can take to court if he fucks me.

But if the dude requests full payment... I'd be pretty tempted to pay the higher bid. That's gettin into bullshit territory.
 
Oldbased

Oldbased

> Than U
28,552
67,649
Iannis_sl said:
Oh, that wouldn't raise any red flags to me either, as long as he's willing to copy me the invoice and gives me a piece of paper I can take to court if he fucks me.

But if the dude requests full payment... I'd be pretty tempted to pay the higher bid. That's gettin into bullshit territory.
Click to expand...
Oh god no, never give them anything beyond materials max.
Back when I did roofing I used to place the call order and picked up material money when it was delivered.
Now any job I do over 2k I take a 25% draw the first Friday after starting work which is usually 5 days into the job. By that time I have demo done, and substantial materials on site the homeowner can see. Been doing it that way decades without a complaint.

Picasso I always have the option for that available to the homeowner but at a 20% increased markup, no one ever takes that option.
 
Eomer

Eomer

Trakanon Raider
5,472
272
Iannis_sl said:
You break the project into stages. I mean that's all a project is to begin with, the sum of a series of jobs. You work/pay a job ahead. It works out better for everyone.
Click to expand...
There aren't many industries where you pay in advance of receiving the product, good, or service. A home owner has much less recourse to go after a contractor than a contractor has to go after a home owner. The home owner will have to lawyer up and go after them in court, while a contractor can simply file a lien and get an encumbrance on the property they worked on, preventing any sales. Or just, you know, burn the house down.

In any case, seems like we agree: if they ask, it's not a big deal to pay for some of the materials if they're required right at the start. But never pay for the entire job up front.
 
Oldbased

Oldbased

> Than U
28,552
67,649
In addition never pay until he is there to start the work in Heylol's case. The only time I ever ask in advance of being on the job is special order. Typically windows. That is due to the $4000 order, but I write a check and take receipt back to the homeowner of it even then so they know where I ordered them from and how much.

The cases where I went on job to finish someone's else work they were paid in advance a draw weeks prior to starting work. The problem with that is by the time they start, that money has probably gone someplace else. Always wait until work is in progress, that way if they need material money, it is most likely going to your home.
 
Heylel

Heylel

Trakanon Raider
3,602
430
Hm. I just received his contract, which requests $4k up front, and the remaining 4k in 3 stages at the completion of certain milestones:

Payments as follows- 50% [$4,000] to be paid down for start up, purchasing of materials, supplies & payment of tradesmen.
[$2,000] to be paid at satisfactory completion of all tasks, except flooring.
[$1,000] to be paid at completion of all tasks.
[$1,000] to be paid after punch list and any, and all touchup.

I would be probably be fine with 25% up front, but 50% seems a little steep. Am I wrong?
 
Oldbased

Oldbased

> Than U
28,552
67,649
No, you are not wrong. The materials for what you are having done is mostly labor. The material cost is at the end of the job( tiling, flooring ) and drywall and even paint doesn't cost much.
I guess that is why I never get complaints is that I ask for a reasonable amount upfront.

If he needs 4k to start chances are he is already in the hole on something else and your money may go to bail that job out. That is just a hunch though.
I would tell him $2k ( which for demo and drywall work is insane in itself. Drywall is only $6 a sheet. ) at the most when he starts work, and he can do a draw at a certain point. Then pick up on the rest of it. The fact he is going for 4 draws on a 8k job shows he has no cash on hand, and probably credit, but 4k. He is in the hole for something someplace else( house/car payments , labor owed to workers, or needs to buy something to finish a job), trust me. Been there.
 
Heylel

Heylel

Trakanon Raider
3,602
430
So is this a red flag that I shouldn't use this particular contractor? Or just something I need to negotiate?
 
Oldbased

Oldbased

> Than U
28,552
67,649
If you like him and have a good feeling about him, negotiate.
If you have any doubts( you've met him and talked to him, we haven't ) or he won't negotiate, run.
He doesn't need 4k to bust up some drywall and hang $6 sheets though. The very fact he wants material AND labor for his guys up front is goofy in itself.
I always branch out mine, partial material week of I begin work, then after demo and roughin is done( any framing, insulation and electrical rough in) then after finishing of drywall/painting, then after in your case fireplace with the last 25% when everything is perfect, and I bid too fairly ( low ) since all of my work is word of mouth.

The thing is , if he is in a money crunch THAT bad , he may be robbing Peter to pay Paul and putting out fires, which will distract him from your job, or it is the way he does things. You got to decide which it is and talk to him about it or move along to the next one.

Edit-If he subbed out the electrician I can tell you some of them will bill at rough in and then again at final, some at final but either way they usually want their money the second they are done.
Do you know what he is subbing out if anything or is his labor in house with his guys?
 
Heylel

Heylel

Trakanon Raider
3,602
430
I don't have a clue.

Is it inappropriate to just ask why the 50% up front cost?

edit: You know what, forget that. I'm just going to propose a payment schedule of 1000/2500/2500/1000 using his milestones. If he runs, I dodged a bullet. If not, we'll proceed.
 
Heylel

Heylel

Trakanon Raider
3,602
430
His response:

--
We can work something out, but keep in mind I do not charge materials. I only have a few supplier credit accounts for things like commercial steel doors, large amounts of concrete, etc. I learned a long time ago to pay as you go. Cash is King. Call REDACTED (have known and worked with him for 20 years), at the Kennesaw (Wade Green) Home Depot contractor sales and ask him how Ray Beaty feels about credit. If you want to pay for materials, thats fine, but I have to be able to pay my guys. And I have no problem with a $1,000 the day we start. I just cant finance the job. Give me your compromise. Also, I have hundreds of references if you need them.
--

What this sounds like to me is someone who is paying as he goes, which I don't have a problem with. I have no idea whether it is because he dislikes using credit or simply doesn't have any. I feel like I am a relatively good judge of character, and he strikes me as the sort who is more the former than the latter, but I could be very wrong.
 
Oldbased

Oldbased

> Than U
28,552
67,649
Heylel_sl said:
His response:

--
We can work something out, but keep in mind I do not charge materials. I only have a few supplier credit accounts for things like commercial steel doors, large amounts of concrete, etc. I learned a long time ago to pay as you go. Cash is King. Call REDACTED (have known and worked with him for 20 years), at the Kennesaw (Wade Green) Home Depot contractor sales and ask him how Ray Beaty feels about credit. If you want to pay for materials, thats fine, but I have to be able to pay my guys. And I have no problem with a $1,000 the day we start. I just cant finance the job. Give me your compromise. Also, I have hundreds of references if you need them.
--

What this sounds like to me is someone who is paying as he goes, which I don't have a problem with. I have no idea whether it is because he dislikes using credit or simply doesn't have any. I feel like I am a relatively good judge of character, and he strikes me as the sort who is more the former than the latter, but I could be very wrong.
Click to expand...
Ya he operates like I do. I have 1 credit card, I refuse to have more but I do have it in case I need it with a nice limit, but his upfront get started materials is next to nothing for what you are having done.
He won't be paying his guys for at least a week, usually in contracting the following week they worked.
I still say give him the 1k then allow a draw partial way through nothing wrong with that, you just want to see progress as you pay and as he gets to the point he has real material costs, pay him for it.
He just doesn't need 4k to get started.
 
Heylel

Heylel

Trakanon Raider
3,602
430
That was exactly what I offered. 1k up front and if he needed me to pay materials before the first draw, just invoice me and I would pay it against the next draw down. We'll see what he says tomorrow.
 
Eomer

Eomer

Trakanon Raider
5,472
272
I don't know why any business would think that the 30 days of free credit you get on a credit card or through a wholesale account is a bad thing. The only reason we pay our wholesale bills on receipt is because we get a 2% discount for doing so, otherwise we'd be stretching that shit out as long as we could. And because we pay a good portion of them on a gold credit card (weeee, another 1% back), we basically still do get another 30 days. Cash flow is king, but I suppose in the reno business it's easier to get it on the front end (your customers) than the back end (your suppliers, bank, etc).
 
Oldbased

Oldbased

> Than U
28,552
67,649
I use payal for 1% cash back but it comes through to my bank after about 2-4 days after I purchase so funds have to be there.Lifetime cash back: $454.88 USD since January 2013.
No fees, and additional 3 days hold time on anything I need. I used to be bad with credit, this keeps me more honest and in control.
 
R

Remit_sl

shitlord
521
-1
Eomer_sl said:
I don't know why any business would think that the 30 days of free credit you get on a credit card or through a wholesale account is a bad thing. The only reason we pay our wholesale bills on receipt is because we get a 2% discount for doing so, otherwise we'd be stretching that shit out as long as we could. And because we pay a good portion of them on a gold credit card (weeee, another 1% back), we basically still do get another 30 days. Cash flow is king, but I suppose in the reno business it's easier to get it on the front end (your customers) than the back end (your suppliers, bank, etc).
Click to expand...
Well said. I pump all my business expenses through my LLC credit card, even though I'm long past the point of needing to float anything. The rewards alone make it stupid not to.
 
Heylel

Heylel

Trakanon Raider
3,602
430
We reached an agreement based on my proposal, so we're putting 1k up front. Starts work on Friday. I'm busy with work this week, and wanted the additional time for the insurance check to arrive. I can float the down payment if it isn't here by Friday, but I'll be on the phone raising hell all the same. Should be no problem.
 
Oldbased

Oldbased

> Than U
28,552
67,649
Ugg I hate starting jobs on Friday unless I am able to work all weekend on it too. You go in make a mess and leave the homeowner looking at it for 2 days until Monday.
The plus side to it is you can have your guys go in do the demo then have all weekend to think about what is needed, start making shelves and whatnot.

Either way, good luck with it Heylel!
 
You must log in or register to reply here.