Construction companies have poor presence on BP

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Construction companies have poor presence on BP

Joshua Howaniec
Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes

I was just going through some of the construction companies in Indianapolis, for my own related work purposes, clicking on links and such. I found a lot of the links go nowhere and or the phone numbers are no longer set up to that company or what not.

There needs to be a better way construction/building/rehab companies can maintain a presence and network. There really aren't that many by the city and like I said, the ones that are here are mostly dead or inactive. 

Us blue collar industries gotta be better at coming together and gathering the talent in the same place. 

Ideas? 

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y

I think part of it and based on my personal experience in Indy.. is there are two opposing forces working.

the investor who wants to buy and rehab a property for as cheap as possible to make the numbers work.

and contractors who give honest quotes but don't get a lot of work with rehab investors because there is no money in it for them doing 15 to 30k rehabs.. 

that leaves very much bottom of the barrel hand to mouth contractors running around that will take on those small jobs.. they have no money to buy materials.. and we as consumer take on huge risk paying in advance.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    I think part of it and based on my personal experience in Indy.. is there are two opposing forces working.

    the investor who wants to buy and rehab a property for as cheap as possible to make the numbers work.

    and contractors who give honest quotes but don't get a lot of work with rehab investors because there is no money in it for them doing 15 to 30k rehabs.. 

    that leaves very much bottom of the barrel hand to mouth contractors running around that will take on those small jobs.. they have no money to buy materials.. and we as consumer take on huge risk paying in advance.

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    19Reply
  • Tanner Marsey
    Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
    7y

    Economy is good. Money is cheap. Everyone is working. They don’t need to sweat their presence on BP or anywhere else for that matter. If they’re even slightly capable they’re probably having trouble doing all the work they get contacted for. It’ll change when the market/economy softens a bit.

    12Reply
  • Dutch Langley
    Flipper/Rehabber · Matthews, NC · Member since 2019 · 198 posts · 239 votes
    7y

    We are a general contractor and also flip houses.  Our work for clients consists of only high-end clients with good profit margin...only word of mouth.  We are very experienced and have done work in the NC area since the 90's.  As fellow investors  we know we can't make a decent profit on small rehab/flip jobs for other investors.  On our own properties we are buying and flipping, it does of course because we are doing everything at cost and then getting the profit off of the sale.

    We have some of our client work on a facebook page but fortunately we aren't in a position where we need to advertise for more work...so we aren't going to spend money advertising.   In fact, we have lately been turning down a bunch because we are booked out until the end of the year. We went through the downturn in 2008 and yes, at that time we were doing everything we could get our hands on.

    So for small rehabs, you are generally going to have to look for newer general contractors perhaps and be flexible with time and costs.  The economy is great here, so everyone is busy, busy, busy.

    8Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors . 

    6Reply
  • Chris K.
    Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    I think @Jay Hinrichs nailed it. There's really no money working with smaller investors. Most smaller guys I know that are doing well focus on new construction and high-end renovations. 

    I would also say that for non-residential work, it's hard to say whether advertisements really matter. For example, my glazing company does a lot of big projects in the Northeast. For us, there is really no reason for us to market towards the residential market or the small investor market. The kind of residential work that we do are projects where the owners won't blink an eye spending $250k to $500k on just the glass and windows. For those kinds of projects, they often hire an architect and/or a GC to manage the job. You're not going to get work from them by having a nice website. 

    I think the smallest residential job we did was around $100k to install these nice, but convoluted sliding doors. And even that project was done as a favor for a good customer who was in a tough spot. 

    Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Matthew Paul:

    I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors . 

    this Is why I take the position BRRR as talked about on this site and endorsed.. is just so Risky to a first time investor.

    these can work .. but boy can they go bad if you have no experience dealing with contractors or out of state and you think your first investment is going to be a sub 100k house in a rental area of the US>.  

    the talent that is available to work in those neighborhoods at the price these investors need to get to make the BRRR work or attractive its just generally those as stated that are not really prime contractors.. undercapitalized ERGO cant buy any materials need to be paid weekly etc etc.. were as I get the feeling on BP many just look as a contractors and kind of lump them all together..

    My niece just got a bid on a 500 sq ft master bed addition in Santa Clara CA  ( silicon valley)   250k  500 a foot.  that contractor no doubt will make some big bucks on that.. Materials don't cost anymore in the bay area than they do anywhere else.. a 2X 4 is a 2 X 4  roofing material is roofing material..  wire is wire.. pipes are pipes  etc etc its all labor and profit.

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    6Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Chris K.:

    I think @Jay Hinrichs nailed it. There's really no money working with smaller investors. Most smaller guys I know that are doing well focus on new construction and high-end renovations. 

    I would also say that for non-residential work, it's hard to say whether advertisements really matter. For example, my glazing company does a lot of big projects in the Northeast. For us, there is really no reason for us to market towards the residential market or the small investor market. The kind of residential work that we do are projects where the owners won't blink an eye spending $250k to $500k on just the glass and windows. For those kinds of projects, they often hire an architect and/or a GC to manage the job. You're not going to get work from them by having a nice website. 

    I think the smallest residential job we did was around $100k to install these nice, but convoluted sliding doors. And even that project was done as a favor for a good customer who was in a tough spot. 

    Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

    Good friend of mine in Marin county CA..  just north of SF Golden gate bridge and very affluent.  His company only did kitchen and Bath remodels..  and he made Millions.. bathrooms 30 to 100k  kitchens 100k to who knows what..  

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    2Reply
  • Anthony Rosa
    Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
    7y

    Sure they have a poor presence and its because the good ones are too busy and can't be bothered giving a quote to a house flipper that's negotiating a couple hundred bucks.   

    0Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    @Jay Hinrichs A friend of mine has done very well . He does body work and paint . He only works on Porsches , and Mercedes . I asked him why ?  He says it takes just as much effort to sand and paint a Porsche as it does to paint a Toyota Camry .  But a Camry owner wont pay $5000 for a paint job .   Contracting is no different .  You go where the money is . 

    7Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Matthew Paul:

    @Jay Hinrichs A friend of mine has done very well . He does body work and paint . He only works on Porsches , and Mercedes . I asked him why ?  He says it takes just as much effort to sand and paint a Porsche as it does to paint a Toyota Camry .  But a Camry owner wont pay $5000 for a paint job .   Contracting is no different .  You go where the money is . 

    or in our case here in Oregon our sub base is priced competitively but we give them 30 to 40 homes a year..  

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    2Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    7y
    Originally posted by @Jay Hinrichs:

    I think part of it and based on my personal experience in Indy.. is there are two opposing forces working.

    the investor who wants to buy and rehab a property for as cheap as possible to make the numbers work.

    and contractors who give honest quotes but don't get a lot of work with rehab investors because there is no money in it for them doing 15 to 30k rehabs.. 

    that leaves very much bottom of the barrel hand to mouth contractors running around that will take on those small jobs.. they have no money to buy materials.. and we as consumer take on huge risk paying in advance.

    This is spot on (no surprise considering who posted it), I deal with this the 52 times a year that I talk to someone asking about FHA 203(k) or Fannie Mae Homestyle Renovation loans in Oakland and the San Francisco East Bay... like 1 or 2 a year actually close.

    The investor thinks it's a $125k job based on some book or blog or who knows what. Cheapest GC that can pass underwriting (has done similar jobs in the recent past, has insurance, is licensed, etc) bids it at $275k.... So now you're asking to borrow $700k for a home with a documented ARV (according to the appraiser who has seen the bid) of $620k? Yeah, that's going to have issues.

    All the good GCs in the Bay Area are busy rebuilding homes destroyed in all the Northern California fires, for people with deep pockets thanks to fire insurance payouts. 

    GC-based real estate investing strategies are only good, in the Bay Area at least, if you yourself are that GC, or if that GC is someone you have an established relationship with (ie, you have done multiple deals in the past, using them), or if you have the sales/marketing experience necessary to get that off-market property (hint hint: if 1 or more Realtors are involved, it is by definition not "off market") for well below actual value.

    100% of the renovation purchase mortgages I've closed in the last 3 years have been for homebuyers that are a) themselves GCs, b) full time experienced professional salespersons/marketers, or c) professional full time Realtors (sorry "wholesalers" and "mentors," you aren't on the list). 

    4Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    7y

    If you think it's bad now, just wait five to ten years.

    4Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    Most contractors in my area *are so busy they don’t have time to be online drumming up business ! Either that or they are at the bar getting drunk . Not all .. but many

    2Reply
  • Joshua Howaniec
    OP
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    7y

    @Jay Hinrichs good insight I hadn’t considered the investors being part and parcel of the problem.

    0Reply
  • Trey BurnsPro Member
    Upstate SC · Member since 2019 · 32 posts · 38 votes
    7y

    I've experienced the same @Joshua Howaniec. I've learned to follow those that follow-through and do what they say they're going to do when they say they're going to do it, even in the smallest things. It takes a lot of work calling for bids and trying to coordinate when they can get to your project, but the ones with character stand out, and they'll be the ones still in business when the economy levels out. I'm currently doing two flips and a new build and the philosophy has panned out so far. 

    Real also recognizes real, so to speak. An example from two weeks ago is me calling a builder who only does jobs $500,000+. I called him to ask his advice on building a home at $70,000. We have a short relationship from another job he's doing for charity, but we showed up on time and paid him on time every time. Once I shared the vision of what I'm trying to do, he said "ok" to designing me three homes in that $70,000 range, which is completely outside of his wheelhouse and typical profit margin.

    Basically what I'm saying is stick to your vision and don't accept this "too busy" bullcrap being accepted in the current economy. Be tenacious about building your character, don't accept anything less than excellent, and be patient. 

    3Reply
  • Joshua Howaniec
    OP
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    7y

    @Dutch Langley glad you are guys are busy.

    So then what I’m hearing from an application standpoint is I need to be finding the investors and contractors working for the higher margins, higher projects and such.

    Thanks for the input

    0Reply
  • Joshua Howaniec
    OP
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    7y

    @Matthew Paul awesome man. Websites are for companies who need more biz for sure and if you don’t why bother.

    One thing is for sure, I can’t charge the highest margins when working with investors. There are other challenges including time, and lots of scheduling, but what I like about them once I get the price I want is that they are repeat business. So im trying to stand out in the niche.

    But based off of what you said I can see why the best pros aren’t bothering keeping a presence here. Which is to bad but the silver lining is I think it will give my company an opportunity to stand out.

    Thanks

    1Reply
  • Joshua Howaniec
    OP
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    7y

    @Chris K. Thanks. You are helping me clarify my target.

    0Reply
  • Joshua Howaniec
    OP
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    7y

    @Anthony Rosa yeah flippers like to do that. I’ve found an easy way for me to get around negotiating to begin with is taking as much of a professional approach as I can. From the first conversation we have I want them to know that we are not the kind of biz that negotiated price based off of whims and dumb mirroring tactics (btw knock that off) . If they want a lower price I turn them to less expensive products or drop some labor.

    1Reply
  • Joshua Howaniec
    OP
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    7y

    @Matthew Paul I think you are right bro. Most profound way I’ve heard it

    0Reply
  • Joshua Howaniec
    OP
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    7y

    @Trey Burns that’s a very Stephen Covy approach. It’s to bad, but it sounds like from the feedback getting most good contractors are priced out of working with investors who are mostly looking to pinch pennies.

    And I like you, believe there is a character problem at play

    1Reply
  • Trey BurnsPro Member
    Upstate SC · Member since 2019 · 32 posts · 38 votes
    7y

    @Joshua Howaniec I’ve found that to be a bit of a myth. I think when people say that they mean the ones they find on Google, HomeAdvisor, etc. Again, it takes work, but there are great contractors out there willing to do smaller jobs. 

    Had a “professional” sheetrock guy in one of my remodels on Monday who quoted me $1,600. Had another guy come in yesterday who quoted me at $550 and will be onsite tomorrow. This guy does great work, but approaches jobs one by one instead of booking himself out far in advance. Found him through my roofing guy. They’re out there. 

    1Reply
  • Matt M.
    Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    7y

    I’ve done pretty well working with/for investors. Sure I can’t charge as much, but once we agree on a price, they leave me alone and I do my thing. I have a few clients that consistently buy properties and have tons of rentals that I take care of. At this stage in the game for me, I just want to be left alone to do my thing. I’m tired of moving people’s furniture, vacuuming their dogs hair before I can paint, and the scheduling of when they will be home or not. I’ve also never gotten the run around of getting paid with investors. I’m not getting rich, but my bills are paid and I’m working all year long. Good enough for me.

    7Reply
  • Joshua Howaniec
    OP
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    7y

    @Trey Burns I’m glad to hear that as targeting investors for repeat business and building my own network for future investments has been my strategy. I’ll stick to it.

    2Reply
  • Joel S.
    Rental Property Investor · Brooklyn, NY & Jersey City NJ · Member since 2016 · 39 posts · 7 votes
    7y

    @Jay Hinrichs

    Good Morning: I can attest Having a construction company servicing Jersey City.

    Its almost impossible to make money on these small jobs.

    Joel

    0Reply
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