I have three single family homes all in Gary Indiana and all of them need work. I only can do so much but I have so much more I need done. The hardest part of all of this is finding good licensed contractors that can do the work. Either they're not licensed and bonded or they're schedule conflicts with mine so they cancel the appointment, show up late or sometimes don't show up at all. Maybe it's because these homes are in Gary which may have a stigma to them.
Another problem is that I'm using credit cards to pay for the work and theses guys want to get paid cash. Am I missing something? It's 2021! Everybody should be accepting credit cards at this point. (at least in my mind) If a job cost $1000, I'm not paying in cash.
I trying not to get frustrated with this but I thought I'd write this post for some insight from investors with more experience.
I've only had one contractor that accepted credit cards as a payment, but I wasn't willing to pay the convenience fee. From my experience, which is somewhat limited, most contractors only accept cash and possibly a check.
Hi @Brent Beard
I feel you, the struggle is real. An idea you might want to consider is helping them get setup with Square or similar easy to use credit card processors. It would help a non-tech savvy business owner and also score you some points for helping them which hopefully would earn you some loyalty. If you can provide them with a basic framework of systems to use they’ll be much appreciated. Last time I checked Square was free to setup and pretty easy to use (admittedly it’s been a couple of years). Apps like Venmo are another option to consider. They allow payments to $2,500 I believe on personal accounts and slightly higher for business. Hope this helps and good luck!
If a job is $300 or less, then yeah, I'll pay cash for it. But anything more than that I prefer to pay by credit card. What really frustrates me is when I go the the yellow pages and see an ad for a contactor and that ad say's they accept credit cards but then, after they give me the estimate, they tell me they don't. I feel like that's false advertisement. I wouldn't have bothered calling them if they didn't have those visa/mc/discover logos on their ad.
@Brandon Schwab I actually had to do that the other day with a plumber. I sent him my square link and helped him get set up. He was very resistant at 1st because he had a bad experience with PayPal and thought all credit card processing companies were gonna be difficult.
I was assuming that the reason why you wanted to use credit cards was that you didn’t have enough liquid cash to use for repairs. I retract my original reply, as most of the contractors I use accept Venmo, PayPal, or CashApp.
You're not necessarily wrong. I just prefer to use my cash in other investments like stocks, options and cryptocurrency trading. Using credit cards helps me get things done and helps my credit score while at the same time collect the perks of the credit card like cash back.
You don’t mind paying high interest or the convenience fees that contractors will most likely charge for using a CC?
I don't mind and here's why: That convenience fee is going be 3.5%. My trading is going to yield me between 5-10 percent. And the job I'm hiring that contractor for, if he does it right, I'll only have to pay one time. While I can compound my trading over and over again making my money grow faster and that's the whole point. Real estate is a more secure investment but the growth is slow. I only get rent once a month. But I trade in the market everyday but it is more risky. Somedays are better than others but I do well in the long run so it's worth it.
@Brent Beard With contractors there are 3 metrics: quality of work, speed of completion, and low cost. Choose what matters to you. 1 of 3 is about half of all contractors, 2 of 3 is about the best you could expect. 3 of 3 is the unicorn and if you find a unicorn they usually don't stay that way long either because they are actually good and very busy so they raise prices. Also did you know you can send money to a phone number or email even if they don't have an account? They will get a notification and have to set up an account to get their money. I dont recommend it though.
@Peter M. You ain't lied yet. I had a great plumber that had all three qualities you mentioned. But he met a woman, got married and moved to Kentucky. I was happy for him but she was the worst thing that happen to me. lol
This has and likely always will be an issue. It is the nature of the beast. If your processes are running tight then you are prepared to handle situations when contractors go belly up on you. There are certainly some good ones out there but most of the time it takes quite a bit of trial and error to find them.
@Brent Beard I'm not sure that I follow. You will have to pay off your CC statement at the end of the month anyway, otherwise you risk paying a high APR, which will negate any of your growth in the market.
Only real benefit that I see is to get the CC points.
I have been a contractor for many years. If I can give you our perspective.
1. Most investors don't want to pay for good contractors, we are not cheap. They want good work for cheap from guys that are reliable. They are rare. If they are good, cheap and reliable they are quickly picked up by someone like me that will keep them busy for years to come without having to give bids and chase work. Or they will become someone like me and grow their own business. Either way the dont last too long in the cheap department.
2. The credit card is on non issue, We take credit cards but you pay the fees. Makes no difference to me. But we are a bigger company, the small guys are intimidated by this even though they should not. They just want to work and get paid and not do office work.
3. I know this is probably not helpful to solve your issue but after being in rehab/construction work for over 25 years I feel its fairly accurate. Even more so when the market is good like it is now. Its a grind when you are smaller, but keep at it and when you find a good guy, try to keep them busy and treat them right.
I’m a contractor for 18 years. When square for phones first came out, I got one, had credit cards added to my ads, never was asked to take one for payment. Fast forward to about 3-4 years ago. Signed up again, put stickers on my van, etc. still have not been asked to accept one.
So, I take cash or check. Or Venmo.
As a contractor cash is king, and if you write a check out to me vs. my company I may just take the check to your bank and turn it into cash.