Why am I having trouble hiring a contractor?
15 Replies
Caleb Palladino
posted about 1 year ago
I have been trying to get a contractor to give me an estimate on an investment property that I have lined up. However I've had 3 contractors that said they are willing to walk the property and that they would call me back later that day to let me know of their availability. They never do. I leave messages and send emails to other contractors who don't answer the phone right away and none of them respond. I've even used Home Advisor to advertise my project but I'm getting nothing. I would like to get 3 separate bids to negotiate pricing but I cant even get one. What am I doing wrong? and how can I get better success with contractors?
Chris Mason
(Moderator) -
Lender from Oakland, CA
replied about 1 year ago
A lot of general contractors will not bid a job for someone who doesn't own the property yet.
Of those that do, a lot of them will not do it if someone is doing the "get 3 bids" thing.
Of those that will, a lot of them will not work with real estate investors at all.
Keep calling. You're looking for that 1 in 200.
Supply and demand. For GC's, it's a seller's market. GCs dictate prices, timelines, whatever they want. There are 40 jobs that need doing for every 10 GCs, they can afford to pass on all but the most desirable jobs/people/etc.
To quote a GC I know well: "I have been raising my rates 20%/yr, and the market has not even blinked."
To quote that same GC: "I am hiring unskilled labor, for things like digging a whole or working a wheel barrow, at $50 an hour. That's just where the market is at, no one wants to break a sweat any more."
Keep in mind that I'm in the SF Bay Area. Might not be as bad where you are at, lately vast swaths of NorCal burn down every summer, which also keeps CGs busy, and busy on big $700k jobs. But there's broad consensus of an acute shortage of GCs in most markets.... bottle of water: $1.25. Bottle of water in the desert: $10.
Russell Brazil
(Moderator) -
Real Estate Agent from Washington, D.C.
replied about 1 year ago
Because the contractors know its a waste of their time. You dont own the property, so there is very little chance you actually close and hire them for the job. Time is money.
William Lees
Contractor from Sewell, NJ
replied about 1 year ago
It Can definitely be difficult to get a contractor to go through a property. A lot of the reasons people have given above are the reason. Finding the right investment friendly Contractor is what you need to do. They will better understand how to work with An Investor so it makes sense. I am a contractor in New Jersey, New York, PA, Delaware area and I work solely with investors. So everything I do is catered to working with them, walking projects Before they get them (sometimes 10 a day), having detailed scope of works so they can know what their line items cost, and having a way to communicate the entire project with the investor so they can follow along and know what’s happening every step of the way.  where is the project you were looking for bids on?
Brian Garlington
Realtor from Oakland CA
replied about 1 year ago
If you tell them you will pay them for their time.... say $200 they will probably show up and do a walk through . Do NOT tell them you are getting 3 bids. Time is money.... let them know whether you buy the property or not you will pay them for their time.
Dave Rav
from Summerville, SC
replied about 1 year ago
Many of the reasons "why" are stated by previous posters on this thread. A probable one by @Russell Brazil talks about you not owning the property and time being wasted.
An overarching theme here would be the state of the market. In many areas, the economy is good and there is a lot of work to be had. Where are you located? Many contractors are looking for "sure-shot" low lying fruit, that yields them the biggest bang for their time. Is this right or ethical - not typically. Why? Well, because it just isn't right to charge Grandma $800 to change out her toilet because she doesn't know better and because you can name your price.
Someone else stated: "To quote a GC I know well: "I have been raising my rates 20%/yr, and the market has not even blinked."" --> this GC's regulars are likely to drop him. (at least the smart ones should). No industries should increase prices on services by 20% a year. Thats just not sustainable. He will likely pay for that in lost business eventually. When the market slows, he will have that many less loyal clients.
Just keep looking..
Stephen R Johnson
Rental Property Investor from Bernardsville, NJ
replied about 1 year ago
@Brian Garlington I was going to suggest the same.
Chris Mason
(Moderator) -
Lender from Oakland, CA
replied about 1 year ago
Originally posted by @Dave Rav :Someone else stated: "To quote a GC I know well: "I have been raising my rates 20%/yr, and the market has not even blinked."" --> this GC's regulars are likely to drop him. (at least the smart ones should). No industries should increase prices on services by 20% a year. Thats just not sustainable. He will likely pay for that in lost business eventually. When the market slows, he will have that many less loyal clients.
For a little more context, he's in his 70s and would be perfectly happy to retire. But if the market is going to double his income every 4-5 years, sure, he'll keep on chugging away, cherry picking those jobs he wants. Can you blame him?
Dave Rav
from Summerville, SC
replied about 1 year ago
Originally posted by @Chris Mason :Originally posted by @Dave Rav:Someone else stated: "To quote a GC I know well: "I have been raising my rates 20%/yr, and the market has not even blinked."" --> this GC's regulars are likely to drop him. (at least the smart ones should). No industries should increase prices on services by 20% a year. Thats just not sustainable. He will likely pay for that in lost business eventually. When the market slows, he will have that many less loyal clients.
For a little more context, he's in his 70s and would be perfectly happy to retire. But if the market is going to double his income every 4-5 years, sure, he'll keep on chugging away, cherry picking those jobs he wants. Can you blame him?
See, this is part of the problem. Some just keep pushing the envelope, beyond what is reasonable and even healthy for business. But, then again, he is just one contractor - a very small business, I'm guessing? If so, he likely won't tip the economic scale much in that area or move markets. Like I said though, the smart ones will find a new contractor
Salina Robbins
Rental Property Investor from philadelphia, pa
replied about 1 year ago
Read BRRRR by David Green. This book goes into detail around tips you've been given on this post.
Caleb Palladino
replied about 1 year ago
It’s in Allentown, PA
Ibrahim Hughes
Flipper/Rehabber from Bloomfield, NJ
replied about 1 year ago
Yep I saw it when the last Bubble bursted. Those contractors who were giving you their butt to kiss had to come back begging for work months later.
Amit M.
Rental Property Investor from San Francisco, CA
replied about 1 year ago
^
that
was
fun
————
3words
Matthew Paul
from Severna Park, Maryland
replied about 1 year ago
Originally posted by @Ibrahim Hughes :@Dave Rav
Yep I saw it when the last Bubble bursted. Those contractors who were giving you their butt to kiss had to come back begging for work months later.
When the last bubble burst as a contractor , I took a week off to relax . And then since I was sitting on a pile of cash I started buying more rentals . I have never been slow , just too busy .
A good contractor isnt leaving money on the table at this point in time .
Dave Rav
from Summerville, SC
replied about 1 year ago
Originally posted by @Ibrahim Hughes :@Dave Rav
Yep I saw it when the last Bubble bursted. Those contractors who were giving you their butt to kiss had to come back begging for work months later.
@Ibrahim Hughes
Absolutely. Greedy people. Just because you can, doesn't mean you should. Don't get me wrong, make money now. Just don't be a putz. Case in point, just yesterday I experienced a leak at skylight in a property. Window just needed to be sealed; no other issues. Called my reliable contractor and he went out and took care of it. Charged me about half what other contractors would, and probably 1/3 what a roofer from the yellow pages would. Why? Well, because I've sent him thousands of $$ in work over the past few months. He tells me "I take care of my regular clients" as well he should. Thats. Just. Good. Business.
Ibrahim Hughes
Flipper/Rehabber from Bloomfield, NJ
replied about 1 year ago
Originally posted by @Dave Rav :Originally posted by @Ibrahim Hughes:@Dave Rav
Yep I saw it when the last Bubble bursted. Those contractors who were giving you their butt to kiss had to come back begging for work months later.
@Ibrahim Hughes
Absolutely. Greedy people. Just because you can, doesn't mean you should. Don't get me wrong, make money now. Just don't be a putz. Case in point, just yesterday I experienced a leak at skylight in a property. Window just needed to be sealed; no other issues. Called my reliable contractor and he went out and took care of it. Charged me about half what other contractors would, and probably 1/3 what a roofer from the yellow pages would. Why? Well, because I've sent him thousands of $$ in work over the past few months. He tells me "I take care of my regular clients" as well he should. Thats. Just. Good. Business.
Absolutely. These guys understand that markets work in Cycles and your regular clients are the ones who will always be there to support your business. Particularly when the market is down.