Using 100% Home Depot sub-contractors for a home rehab

29 Replies

Has anyone ever done a full rehab using The Home Depot or Lowe's sub contractors and materials?

In my newness to house flipping, I find this method to be more reliable than finding a GC on Craigslist.  I don't have an immediate or extensive list of subs in my area whom I know and trust.  I find a bit of comfort knowing that subs working under big box stores like Home Depot can't just skip town with my money and leave the work unfinished.  I assume I'd be paying the subs through the store.  Plus, I'd have a "boss" to report to regarding the work done by each sub contractor and therefore, accountability.

What's your perspective, experience, or words of wisdom in this regard?

PS.  My long-term goal is not to work through Home Depot on every project.  Maybe my first several until I get the hang of it and develop more relationships in my market.

When I was in the military, in boot camp, the company commanders had an answer to questions that we asked them, and it went something like this:

"Not only No, but $%#% No".

You can replace the symbols in your mind. Lowes and HD have *the worst* subs you can imagine. The only, and I mean only, sub that was ever any good was the subs that put in a set of solid-surface countertops for me, and guess what? It turned out that they were an actual local company, because HD had to subcontract with them because the solid surface company required so many hours of training and certification in order to install the material, and only a professional company could maintain that kind of requirement.

Every other job I've ever had done by either has been a joke. My recommendation would be to find a professional building supply source - my local one is Builder's First Source (formerly Paty's) and ask for a few names. I have used this strategy a number of times and have always ended up with good subs. 

Originally posted by @JD Martin :

When I was in the military, in boot camp, the company commanders had an answer to questions that we asked them, and it went something like this:

"Not only No, but $%#% No".

LOL!!!

My recommendation would be to find a professional building supply source - my local one is Builder's First Source (formerly Paty's) and ask for a few names. I have used this strategy a number of times and have always ended up with good subs. 

 That's an awesome idea.  Another one on many BP podcasts is to talk to the people at the big box store Pro Desks early in the morning and make connections from there.  Would you suggest that?

Originally posted by @Ashley Wolfe :
Originally posted by @Jd Martin:

When I was in the military, in boot camp, the company commanders had an answer to questions that we asked them, and it went something like this:

"Not only No, but $%#% No".

LOL!!!

My recommendation would be to find a professional building supply source - my local one is Builder's First Source (formerly Paty's) and ask for a few names. I have used this strategy a number of times and have always ended up with good subs. 

 That's an awesome idea.  Another one on many BP podcasts is to talk to the people at the big box store Pro Desks early in the morning and make connections from there.  Would you suggest that?

 That's not a terrible idea, especially if you live in a very rural area, but that can still be hit or miss. Most serious builders/contractors will have a professional supplier somewhere, even in rural areas, and that supplier is usually not Lowes or HD. That's not a knock on those places - I shop both of them quite frequently - but they just don't offer the kind of material or service that most professionals require. For example, finding quality lumber for professional use at either place is time consuming and often fruitless; the first 3 layers of 2x4s in either are usually warped, split, or full of run-out, and pros don't have time to be sorting through homeowner lumber. 

Hi Ashley,

You are right in your thought that lowes or HD will be the boss, for the most part, if your not happy with the job they will fix it. I've used Lowes for flooring installs 3 times and have been very happy. In fact I build a relationship with the Insraller and really only continue to use lowes because he's the contractor.  The price is usually better than others too. I can't speak for other subs and I'd assume it will depend on the area.  I do think it's a good option if you don't have contractors you can trust. But I'd recommend working on building your own team... It Takes time and some trial and error but you need to start somewhere!

 I did buy Andersen windows on a sale for 30% less than my local lumber yard was selling them for but had my own carpenter install them. 

Good luck!

Adam

It'll PROBABLY be fine but your likely going to overpay. Remember the big box store has to get their cut too. Also ask yourself why are those contractors subbing for them? Why can they not get enough of their own work? Etc.. Dont get me wrong, there is probably plenty of good ones out there but also plenty of bad ones, its guaranteed to be hit or miss. 

If you do use them, and a particular trade does a good job, get their info and then use them directly next time to cut out the middle man costs. 

You can also sit outside the big box stores early in the morning, watch for trucks with the trades you need, get their info. The guys hustling early are the guys ya want.

Your going to have trial and error no matter what on the contractor front until you get a good team together just stay with it. GL

@Ashley Wolfe , if you decide to go the route of using HD for work, you may want to build some rapport with the store manager - relationship goes a long way.  Don't be fooled however that HD won't run off with your money.  If you have a dispute, it may be very difficult to seek resolution as you'd be dealing with a behemoth of a company.  Earlier this year, I was consulted on a quartz countertop installation they performed for a retail customer.  The installation was in direct contrast to the manufacturer's instruction (e.g., seams placed over unsupported locations, not using installation clips for the sink mounting, etc.). I provided the client with a letter, the manufacturer's installation instructions, and photographs documenting the situation and they in turn took the matter up with HD.  In a direct conversation with the Kitchen & Bath Manager for HD, he verbally agreed that the work was improper, but he was overruled by someone up the food chain and the client's request to have it corrected was denied.  Apparently the installer was having some serious issues, as I was told by HD they took them off of their approved vendor's list and when I called the installer myself, they were closed indefinitely.  Yet this did nothing to sway HD to step up to the plate and make the customer whole.  Keep in mind, that HD is a retailer, not a contractor.  Their business relies on volume and turns (of inventory).  Be aware if it applies, if your state has any consumer protection laws about contractor sales, keep in mind that protections afforded may not apply to a retailer like HD if you solicit them in their place of business.

I concur with @JD Martin , go meet with the store and sales managers at your local professionally oriented supplier and build relationships with them.

As for going to the big box store ProDesk early in the morning, (or as @Brandon Stevens  mentioned about gathering names from the parking lot), it can't hurt.  But in my opinion, you're far better off going directly to the professionally oriented supplier.  Food for thought... save for the day-job handyman or contractor, which type of contractor would you want working for you... the guy who picks-up stuff on the way to the job, the guy who picked-up the material he needs tomorrow on his way home today, or the guy who has the material delivered to the job site?  Personally, if I'm paying a contractor to do a job, I want his butt on the job, not out shopping (and rest assured that you're paying for that time one way or another).  This mindset is akin to what @Jd Martin stated about sorting through lumber at the box stores - the guy who is willing to spend his time culling a hack of lumber to pick out the good ones doesn't value his time and therefore, is unlikely to value yours.  The price for a few extra studs pales in comparison to the cost of the lost time and progress.

You may very well have success as you define it with a HD installer... I know a few who do it as they are small owner/operator guys who hate the sales and marketing process and so are willing to work for the rates HD pays, or they are the owner of a company utilizing very low cost labor and working on volume.  They're happy to have a funnel of work orders coming to them on a regular basis and so it's worth it to them.

And regardless of how you go about finding your contractors, I encourage you to be sure that they are all properly licensed and insured - HD may have their own license, but unless the installer who arrives on your job is an employee, they are not likely to be covered under HD's license.

I also thought HD/Lowe's/Sears would be a good way to go, not only because of their backing, but because they offer 12-24 months interest free financing, allowing me to pay it off at closing (I rehap/flip).  I was shocked when HD's roofing contractors bid was almost 3X my lowest bid, and 2X the other 2 bids I received on the same roof.  I would have paid a couple thousand more to take advantage of the interest free, but not 10K.  The materials for all 4 bids was the same so he had to mark up his labor to make up for HD's cut, I am guessing.  BTW, on the same roofing project, Lowe's never even responded to the bid request.  I will still have them bid my jobs, in the hopes that they will be competitive, and for comparison though.  You can't beat the financing :)

Originally posted by @Account Closed :

@Ashley Wolfe, if you decide to go the route of using HD for work, you may want to build some rapport with the store manager - relationship goes a long way.  Don't be fooled however that HD won't run off with your money.  If you have a dispute, it may be very difficult to seek resolution as you'd be dealing with a behemoth of a company. 

Good point!

Other than taking their word for it, is it standard operating procedure for contractors to carry proof of insurance with them so I can see it when I ask them about it?

I've had nothing but great luck working with Home Depot.

The first job was a sliding glass door replacement/install.  The contractor was professional, courteous, licensed, insured, etc.  When the screen door came out of the box damaged, the contractor handled all of the returns, credits and rebills directly.  No permit was required for this job.

The second job was a full set of windows for a house I was rehabbing.  These contractors were as professional and great as the first set (the jobs were 7 years apart) and handled the required permits.  The only thing I had to do was call the city inspector after the job was finished and schedule the walk through.  There was an issue that came up with the inspection and Home Depot and the contractor took care of it immediately with no additional cost to me.  (It required paperwork, not a redo of any work).  

I liked having the interest free payment option on both jobs and based on the other quotes I got to do the jobs, Home Depot was right around the same amount as other licensed and insured contractors I talked to.  I tend not to work with unlicensed, uninsured contractors (except for the work I do myself, of course), so I expect to pay a little more than your average Craigslist contractor.  

The thing I really love most about the interest free payments is that I make only 1 or 2 payments out of my own pocket.  By the time the 3rd payment is due, I've got tenants in who are essentially making the payments for me.

Originally posted by @Ashley Wolfe :
Other than taking their word for it, is it standard operating procedure for contractors to carry proof of insurance with them so I can see it when I ask them about it?

 Usually, no (at least around here - unless they have all their paperwork with them for another job).  Technically their insurance does you little good unless they get a declaration (or whatever the agents call it) from their agent specifying your property address and you/your company.  Most agents can do this in less than an hour and email to you.  Some (all?) contractor's insurance is in effect only if they have pulled permits, *if* the job requires a permit in your area.

Originally posted by @Ashley Wolfe :

Other than taking their word for it, is it standard operating procedure for contractors to carry proof of insurance with them so I can see it when I ask them about it?

Don't ever take their word for it.  Ask them, sure, but have them back it up in writing.

Even if they have proof of coverage with them, there's no telling if it's still valid and in good standing.  Have their insurance company/agent send you a copy of their coverage directly and ask, at a minimum, that you be named a certificate holder on it, and if you want to go a step further, be named as an additional insured.

Check with your agent to find out what coverage you should have too... you may very well find that carrying builder's risk is a wise choice along with vacancy insurance, etc.

Originally posted by @Account Closed :
Originally posted by @Ashley Wolfe:

Even if they have proof of coverage with them, there's no telling if it's still valid and in good standing.  Have their insurance company/agent send you a copy of their coverage directly and ask, at a minimum, that you be named a certificate holder on it, and if you want to go a step further, be named as an additional insured.

Check with your agent to find out what coverage you should have too... you may very well find that carrying builder's risk is a wise choice along with vacancy insurance, etc.

 Awesome!  Thanks!

Overpaying for Home Depot staff might equals less stress and headaches.

From personal experience: I would suggest not placing all your eggs in one basket.

Maybe have a small sprinkle of Lowes/Menards contractors.

Regardless, try scheduling your contractors at least 1 to 2 hours apart.

Example: Plumber 7 am to 11:00 and electricians 1:00 – 3:30 pm

I totally dislike Sears organization. ( my personal feelings )

Heck you possibly could defer some of the repair work via in-house 

credit cards. ( 6 or 12 months promotion )

I am a contractor , I know lots of other contractors and plenty of subs . Not one I know would work for the rates the box stores pay .  As far as finding guys on Craigslist , thats like looking for a Dentist on craigs list , you may find one . But what did you find ?   HD prices are the same or a bit more than a local professional contractor . But with a Local , licenced and insured company you may be talking to the owner when a problem arises . Not press 1 for english .

@Ashley Wolfe I think you'd do much better to find your own contractors. After all, the subs you get through HD are not employees of HD.  You're paying a premium to HD as middle-man for very little in return. 

I encountered a woman recently who had hired Lowe's to install a new deck and she found the whole experience very frustrating. She was assigned an out-of-state 'project manager' who was to be the point-person on the project but the poor communication between that person and the person actually doing the work made for a real mess...and that was for just a simple deck.

Originally posted by @Account Closed :

@Ashley Wolfe I think you'd do much better to find your own contractors. After all, the subs you get through HD are not employees of HD. 

That makes sense, thanks so much for your input.

@Ashley Wolfe I'm not wholly familiar with Angie's List, because I am not signed up with them; however, I've known quite a few people who swear by the service and have found great contractors through Angie's List.

I'd recommend if there is a "trial membership" that you join through that and take a look around the website to see if there are any contractors that you'd need in your area that can be found on that list.

Also, I'd join your local REIA (Real Estate Investors Association), because oftentimes, there will a. be contractors who are a part of that organization, or b. you can network and get names of good contractors via the members within the organization.

Finally, this is a stretch and takes more time, but when you are driving through areas, and you see those signs in the yard that say that the: roof, driveway, lawn, etc, were done by "X" company, and it looks good; take down that number and give them a call for pricing. In my opinion, if someone allows that sign to be placed in their yard then they (should be) are happy with the service they received. Just my minimal .02 cents. Good luck, as I hope to be starting my possible RE adventures next year!

Contact the specific material suppliers(tile company, roofing and siding company, window company, kitchen show room, carpet show room, etc) in town and ask them who they recommend as contractors. They have a business to run and they will know the serious big players that are good in their field. They are not inclined to give bad contractors because it would come back to them.