An expensive contractor

[Dave Halevi]

Hello everyone. I'd like to consult with you about my issue.

There's a contractor that we've been working together on a few projects in the past two years, I can tell that he's very experienced, and very reliable. But, on the other hand, he knows his value and his pricing is sometimes outrageous.

I tried to explain to him my point of view, and reflect the idea of losing deals or spending too much on rehabs.

So, that's the place I need your advice.

Is that a deal breaker, or his other values are good enough for the situation.

Thank you!

[Sergey A. Petrov]

An expensive contractor is often cheaper than a cheap contractor. A cheap one won’t deliver, won’t produce the quality you want, won’t pull permits or build to code, will cut corners, or better yet run away with your money. Are you prepared for a significant haircut on the sale price once your rehab/flip is done? That said, if your contractor only wants to install gold plated materials in a cheaper neighborhood/property that doesn’t work. 

And I can tell you that you trying to explain to someone that they are not worth what they know they are worth, especially with a proven track record, will get you fired as their client. 

[Eliott Elias]

Give him some equity in the deal. Be partners. 

You could also explaining to him that reliable and consistent work outweighs going and trying to find jobs. 

[Dave Halevi]

Quote from @Eliott Elias:

Give him some equity in the deal. Be partners. 

You could also explaining to him that reliable and consistent work outweighs going and trying to find jobs. 

 What kind of partnership would you be offering?

[Eliott Elias]

%10-20 equity without paying him for his labor

or %5 equity on top of everything he charges you 

[Frank Greg]

@Dave Halevi:

 It seems you are located in Detroit, Michigan where according to Zillow the average home price is about $69,000 (and thats after a year on year property value increase of 10%). My guess would be this is not the market for a "pricey" general contractor unless you dont mind projects where total cost exceeds market value.

[Allan Smith]

Why has no one said to get bids from other contractors? Tell this guy you've noticed your projects seem to have gradually increased and if he'd like to submit a bid before you get some others. He'll probably drop price for that alone, but not, who cares? Find someone with the value you would like.

[George P.]

If you don't like the price, post on Craigslist and get someone cheaper. Problem solved 👍

[Terrell Garren]

Quote from @Eliott Elias:

You could also explaining to him that reliable and consistent work outweighs going and trying to find jobs. 

 Yeah, that always works on an experienced contractor. 

[Drew Sygit]

Contractors come in types, just like properties.

You want a Class x contractor working on a Class x property or you're unlikely to get the results you want.

Since you've given us few details, that's all we can tell you.

[Bruce Woodruff]

@Dave Halevi I am that type of Contractor you're working with so I can relate. It is not worth it to us to discount our work for any reason because guys like us can get these nice high-end jobs anytime. If this Contractor likes you, you like him - and trust him and he works well for you (great quality, consistent scheduling) then I would stick with him because you found the needle in the haystack.

So rather than try to lower your prices/quality, why not become the Investor that people know will provide that kind of quality and service and charge top dollar for your product? Be that niche guy that people seek out!

[Adrian Lemus]

Quote from @Bruce Woodruff:

@Dave Halevi I am that type of Contractor you're working with so I can relate. It is not worth it to us to discount our work for any reason because guys like us can get these nice high-end jobs anytime. If this Contractor likes you, you like him - and trust him and he works well for you (great quality, consistent scheduling) then I would stick with him because you found the needle in the haystack.

So rather than try to lower your prices/quality, why not become the Investor that people know will provide that kind of quality and service and charge top dollar for your product? Be that niche guy that people seek out!

 I agree 100%. 

I had an investor that I work with come talk to me about my costs and I told him I will play ball this one time and show him what he wants is not what he’s willing to pay for. I had two guys there the whole time during the Flip which everything took longer to get done. He didn’t want to pay my regular Tile guys so he went on Craigslist with my permission and got Tile guys there, AND LET ME TELL YOU, the job they did in those bathrooms were so top notch that I told the Investor that I will not bring my guys in to redo the bathrooms plus it will costs more because of the tear down and wished him luck. 

CHEAP is always more expensive at the END and If one of us Good contractors land on your lap don’t take us for granted as we take pride in our Work and our Word

[Bruce Woodruff]

Quote from @Adrian Lemus:

CHEAP is always more expensive at the END and If one of us Good contractors land on your lap don’t take us for granted as we take pride in our Work and our Word

True words my friend!

[Lisa Wright]

Get quotes for work.  Use  him for the stuff you think he does amazing work.  The stuff that anyone could do hire out elsewhere.  

I've found that some contractors think working with an investor means a blank check. 

[Adrian Lemus]

But also keep in Mind that may bring up other problems, in my case if the investor brings another contractor to do a part of the job I usually pull my team out and don’t come back until they are done, Mainly because of Insurance issues and I don’t like myself or my guys walking into each other or tools being “Misplaced”

If they touch any of the work I’ve done, the warranty is also voided. There are other issues but these are usually the main issues. 

And I do have all that laid out on my Contract. 

[Bruce Woodruff]

Quote from @Adrian Lemus:

But also keep in Mind that may bring up other problems, in my case if the investor brings another contractor to do a part of the job I usually pull my team out and don’t come back until they are done, Mainly because of Insurance issues and I don’t like myself or my guys walking into each other or tools being “Misplaced”

If they touch any of the work I’ve done, the warranty is also voided. There are other issues but these are usually the main issues. 

And I do have all that laid out on my Contract. 

Very true. I used to have a clause that said very clearly that I was in complete charge of every aspect of the job and the customer was not allowed to bring in their own contractors - unless in a rare case I would allow one if I checked them out carefully and added on my mark-up of 25%.

It's not just insurance issues as @Adrian Lemus said, but it just screws up the schedule and gets into 'I said/you said' episodes, plus code issues.

I had a customer bring in an alarm company without even telling me once and I arrive one morning to find their employee drilling a hole in a huge beam that we had just installed. It was drilled in the area where you are not allowed to put a hole. Who was going to pay to replace this beam at this point in the job ($10,000 or more)?

So a GC must/should control his project with absolute power.....he has to. It is ultimately for the customers own good.