All Forum Posts by: Derreck Wells
Derreck Wells has started 12 posts and replied 530 times.
Post: What is YOUR process for rehabbing/remodeling a house

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Originally posted by Alex Baev:
While porn may provide instant gratification, internet research alone does not. Asking Google how much my HVAC installation will be is worse then asking Zillow how much your house is worth. Have you tried it?
Have you also tried test-driving different trucks without promising to buy them all before you settled on your F-250..? But I shouldn't assume what you drive, much like you shouldn't assume I "sound proud".
I've read J Scott's book on estimating repair costs, but it didn't make me an expert. I'm trying another approach.
But I will now go on and assume I know everything about you, what you've gone through or how hard your life is because I've read Oliver Twist.
What was indirect about it? I quoted you right from the start saying that comments like that piss me off.
Whenever I went to check out a truck, it was with the intent to purchase one. I never went to a Ford dealer and took a truck for a ride to just so I could see how much of a better deal I got on my GMC.
If you want an education, pay for it. Ask for a consultation and pay the person for their time. You stated you got multiple bids when you were already planning to do the work yourself. That's what I have a problem with. That's why many contractors had to start charging a fee. I don't have a problem with the bidding process for an actual customer (you know, the people that are actually planning to hire someone), but the problem has become ferreting out the "tire kickers" and devoting our time to the real customers.
If you don't want to pay for the education, come on to a forum like this one and ask "How much would it cost in the LA area to have my HVAC done by a pro?" There are plenty of people on here who would answer "I paid $1500 to have a guy do..." Don't call out contractors for bids when you have absolutely no intention of hiring one. We have lives, families, organizations we volunteer for, paying customers to talk to, and basically better things to do with our time. Don't you?
Post: What is YOUR process for rehabbing/remodeling a house

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Unfortunately Joe, this is where we've been forced to go by people like Alex who admitted above "As a learning process, I still got multiple bids for nearly every major task I did myself,..." and seemed proud of the fact. He had no intention of hiring anyone, he just took contractors away from their paying work or their families so he could learn about the work process. This is called "consulting" and all of those contractors deserved to be paid for their time. This is very common and it has to stop. Ask Google how much you're saving, stop wasting people's time, the internet is useful for more then just porn, it's great for research.
For me personally, I do a quick search of all my clients. If they're investors or real estate people, I tend to waive that fee because there's going to be more work in the future. I can't tell you how many times homeowners have said to me "If you give me a discount on this job, there'll be more work later." to which my reply is "If there's more work later, I'll give you a discount on that job." If the client was referred to me through "word of mouth", I never charge the fee. They are friends of an existing client and they already know the quality of my work and that I'm worth it. Those people aren't getting bids for curiosities sake, they're hiring me because they've seen my work or someone they trust told them to. Since 90% of my work comes through word of mouth, I rarely charge the fee.
Post: What is YOUR process for rehabbing/remodeling a house

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Originally posted by J Scott:
Now, when I bring in a contractor for a consultation -- for example, when my HVAC guy comes out, tests my furnace and tells me what I need or don't need to fix it or when my foundation guy comes out, takes measurements and tells me what I need to do to make my foundation structurally sound -- I pay them for the time they spend giving me their expert opinions. Just like I pay my attorney for his expert opinion.
But, after the consultation is done, my HVAC and foundation guys go off to investigate the cost of their doing the job and come back with a bid for the work -- I'm not paying them for the time they spend putting together the bid, as that isn't providing any value to me.
By your reasoning, I should be paying my attorney for the time/cost of his going to law school, as that's overhead he's incurring in order to be able to get my work...
Btw, here are two recent counter-examples for you:
1. I asked my CPA if he'd be able to help prepare a prospectus for a private placement. He'd never done it before, and said that he'd investigate and come back with what he could do and how much it would cost. A few days later, he came back with a proposal on how he could help and how much it would cost. I imagine he spent at least as much time on that proposal as you spend on a bid, but he didn't charge me for it, as that proposal wasn't providing me any value -- it was the overhead he incurs to get my business.
I should give an "estimate" over the phone, free, then have a "consultation" for $100 where I go to the job site and take measurements, then go home and make a detailed design and materials list and submit a "bid" free.
That's exactly what I do, I just call it a proposal instead of a "consultation" and "bid".
When I do a proposal, it involves me going to the house, taking measurements, and telling the client exactly what's needed to do the job. That's what I'm getting paid for. Same as your HVAC guy coming and testing the furnace or the foundation guy coming and measuring the foundation. I should get paid for my time just like they should get paid for theirs. It sounds like we're both arguing the same side of this debate, just with different wording. I should call my proposals "consultations" and you'd be okay with it?
And you do pay for your attorney going to law school, that's why they get $300-$500 per hour, to pay off the student loans! Same as doctors.
Your CPA is already your CPA, you're already paying him to do those things. He has made enough profit from you that to give a couple hours isn't a problem. I wouldn't charge an existing client either!
All consumers pay the overhead of businesses. Even if it's at Wal-Mart, the overhead is in the cost of EVERY item they sell. If it wasn't, they wouldn't be in business. I'm simply trying to keep the overhead to a minimum so I can keep my rates lower then anyone else around. If I had to absorb the "consultation fee" then the labor rate would have to go up to compensate for it, then the clients that I work for would basically be paying for the time wasted every time someone just wanted to know how much money their saving by doing the job themselves.
The cost of doing business is paid for by the end consumer, every time. Do you think that delivery companies kept their rates the same for the last 10 years? Hell no! They went up to reflect the gas prices. This in turn has raised the cost of the goods those trucks are delivering. That's why groceries have gone up, that's why the cost of everything has gone up. If the delivery companies had to absorb that gas hike, that "cost of doing business", they would have gone out of business. So they raised their rates. If the grocery store had to absorb that higher cost of deliveries, they would have gone out of business. So they raised the cost of the groceries. It's basic economics.
Post: What is YOUR process for rehabbing/remodeling a house

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Originally posted by J Scott:
... these things are overhead expenses that every service business must deal with. For most service professionals, giving bids/quotes/proposals is also part of the overhead. I couldn't imagine ever paying money for a quote; my attorney doesn't charge me to put together a firm proposal for legal work, my CPA doesn't charge me to put together a firm proposal for accounting work, my mechanic doesn't charge me to put together a firm proposal to fix my car, etc.
I certainly don't think contractors are special and can justify charging for a bid when no few other service professionals do.
That's the problem J., I NEED to keep overhead costs low. We all know that overhead gets passed down to the end consumer, and the big problem I face J., is that I'm competing with Craigslist Hacks that have no continuing education, that have no licenses, that have no insurance, that don't have a trailer full of tools, and are working for $15 per hour. (In my area, contractors average about $65 per man-hour, I charge $40.) I'm competing against the guys Aaron Mazzrillo mentioned above "Most people think they just disappear or go back to prison. I think they all eventually just kind of keel over dead in front of the TV gripping their Budweiser can, never to be heard from again." The truth is that these guys probably realize that they lost money on the job and refuse to continue to work that cheap. No one can work for free.
You're comparing apples to oranges here. It doesn't cost your CPA, your lawyer, or your mechanic anything to answer the phone and say "That's a 4 hour job, that's going to cost you $1200.00. Where it's actually a 4 hour job for the contractor to come up with the proposal for the job. You wouldn't expect your CPA to work 4 hours on your tax returns, just to say "Okay, it's going to cost you $1500 for me to do these returns if you want me to finish them." That's why I charge nothing for an estimate. From past experience, I know roughly what a project will cost. I simply tell the customer, that's going to be in the $1500 range. It's going to take a day, materials will be about $800 and two guys for the day is $640. That's the same as your CPA, attorney, or mechanic telling you what it's going to cost to have the job done. If they want me to work for 4 hours, they will then pay for that work.
Start treating your contractors like you treat your other professionals, your CPAs and your attorneys, and you'll get better contractors. Don't expect something for nothing from us if you wouldn't expect it from your lawyer.
In fact, it might have been you who wrote in another post "It's worth the money to pay a consulting fee to an attorney to sit with you for a couple of hours to make sure your doing it right." or something along those lines. By your reasoning, the attorney shouldn't charge you for that consultation because you might hire him in the future. Is it because we're "just contractors" that it's not worth it to you?
Post: What is YOUR process for rehabbing/remodeling a house

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Originally posted by J Scott:
So, you require your customers to sign a contract prior to your giving a firm bid?
While I completely understand not wanting to waste your time giving bids where you don't get the work, asking your customers to commit to giving you work without a price is much more ridiculous. As someone who hires a LOT of contractors, I can't imagine ever committing to using someone without knowing exactly how much it will cost me.
No J. I don't require it before, I just wrote that quick and out of order. I give an estimate, it's different from a proposal. $3500-$4000 for a deck build for instance. If that's out of the ballpark, then I don't need to waste my time on an actual proposal. I can't afford to waste 4 or 5 hours for nothing. To firm it to a proposal, I charge $100 non-refundable deposit, which will come off the bill if I get the job so it doesn't cost the client extra. Then if they take my materials list and use it to do the job themselves, I still got something for my time. Obviously if I've done work for the client before, then I don't bother.
I completely understand the bidding process and I've fine with the competition, I know the quality of my work and it speaks for itself. What pisses me off is when people who have no intention of hiring anyone have contractors out to bid just so they can use the quote to get insurance money, or they plan to do the job themselves right from the start and they just want to know what they're saving so they can brag to their friends. "That would have cost me $3500 if I hired it out, but I did it for $1500!" They are stealing from the contractors.
Like you said... "Which type of employee would you rather be -- the one earning $12/hour on his time or the one earning $1500+/hour on his time?" Why would you expect contractors to work for free? Writing quotes is part of a job, it's work. We have families to support and bills to pay too.
Post: What is YOUR process for rehabbing/remodeling a house

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Martha's comment about me sounding rough made me re-read my comment.
For the record, I don't sugar-coat things. I call 'em like I see 'em. If I see someone being an ***, I'll call them on it. If that offends someone, well, don't be an *** and I won't call you on it.
Some call it rough, others call it refreshingly honest.
Post: What is YOUR process for rehabbing/remodeling a house

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Martha, I have wasted so much of my time on people like that that I now simply give estimates. Such as "Your deck will cost around $3500-$4000. If that's in your price range, we can sign a contract, get a deposit, and convert the estimate to a proposal." I don't bother to get actual prices or a materials list together until I know they're serious about having the work done. It's cut the wasted time in half, now I'm just wasting my drive time and gas money, not the 2 hours actually putting a quote together.
Post: What is YOUR process for rehabbing/remodeling a house

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Originally posted by Alex Baev:
As a learning process, I still got multiple bids for nearly every major task I did myself, and realized that In my area the cost of construction materials is about 15-25% of the cost of project, the rest being labor. Finishes are more subjective and personal, and costs vary a lot more.
As a contractor this statement just pisses me off. Unless you paid for these quotes, you were just stealing from the people that you called to come give them to you. These people all have better things to do then drive to your property and work for free. If you have no intention of hiring a contractor, don't call one just because you're curious about what something would have cost you if you didn't do it yourself. You are stealing time and money from them. Yes, money. It costs a lot to keep gas in the trucks we have to drive. It takes 3 to 4 hours of time for every quote. The drive to the house, talking to the client, looking up current prices, and writing up the proposal all takes time. Time that that contractor could have been getting paid for by an honest client. Time that could have been spent with their family. (Yes, we have families too.)
Any good contractor is working on a job most days (if they're not, you have to ask yourself why). That means that we have to do quotes at night, when we should be spending time with our kids. Or we're pissing off our current client by taking time away from our work to go meet you and see your property.
You wouldn't expect your lawyer to consult for free. You wouldn't expect your accountant to work for free. You wouldn't expect your real estate agent to work for free. YOU wouldn't work for free. Why do you expect contractors to work for free?
Post: Sister moved into my rental and she is not on the contract. Tenant has a 800 credit score? Should I care?

- Specialist
- Pelham, NH
- Posts 544
- Votes 269
Ann, that's how I read it, but as we both said, I'm not a lawyer...
http://www.gencourt.state.nh.us/rsa/html/lv/540/540-mrg.htm
540:2 Termination of Tenancy. –
I. The lessor or owner of nonrestricted property may terminate any tenancy by giving to the tenant or occupant a notice in writing to quit the premises in accordance with RSA 540:3 and 5. .... (continues with wording on a restricted and commercial properties)
540:3 Eviction Notice. –
I. (relates to nonresidential tenancies)
II. For all residential tenancies, 30 days' notice shall be sufficient in all cases; provided, however, that 7 days' notice shall be sufficient if the reason for the termination is as set forth in RSA 540:2, II(a), (b), or (d).*
*(a), (b), or (d) is basically (a) nonpayment of rent after demand, (b) damage by tenant, family member, or guest, and (d) behavior that adversely affects the health or safety of the other tenants
540:5 Service of Demand and Eviction Notice. –
I. Any notice of a demand for rent or an eviction notice may be served by any person and may be served upon the tenant personally or left at his or her last and usual place of abode. ....
540:6 Violation of Lease. –
[Repealed 1985, 249:10, I, eff. Aug. 6, 1985.]
540:11 Termination by Lessee. –
A lessee may terminate his lease by notice in writing, in the same manner as the lessor, and the notice shall have the same effect for all purposes as a notice by the lessor to the lessee.
Source. RS 209:6. CS 222:6. GS 231:6. GL 250:6. PS 246:6. PL 357:11. RL 413:11.
Post: Sister moved into my rental and she is not on the contract. Tenant has a 800 credit score? Should I care?

- Specialist
- Pelham, NH
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- Votes 269
First, I want to qualify myself by saying I know absolutely nothing about Georgia RE laws (evictions, leases, rents, etc.).
With that being said, I will say that here in NH, leases are useless if the tenant knows the law. A lease can be broken with a 30 day notice delivered in the same manner the rent is delivered. For instance, if you normally get your rent mailed, then the notice to quit can be mailed. If you normally hand collect, then the notice to quit must be handed to you. No reason needs to be stated. However, most people think that if they break a lease they're responsible for the rent for the remainder of the lease (without a 30 day notice, you might win that in court, but probably not). The same goes for the landlord. S/he can deliver a 30 day notice to quit and the tenant has to leave, that's the eviction process here.
MA, however, is very different. You need to name each individual you want evicted. There's a difference between a squatter that the police can come and chase out and a tenant that needs to be legally evicted. If you or your agent has ever taken money from them, they become a tenant, even if they're not on the lease. In your case, if the tenant takes rent from the sister, she may be considered a legal tenant and need to be named on an eviction notice. That's up to GA law. In MA, it's a huge pain in the *** to evict someone. When you finally do, you have to pay a moving company, chosen by the constable, to move the evicted tenant's belongings to a storage facility that you then have to pay for for 6 months. The movers charge $1500+ to move a 1 bedroom apt. because they can, you have no choice.
Now consider this... Your 800 credit score tenant reconciles with her husband and moves out and leaves you with her sister for a tenant. Will the sister be able to pay the rent or will you be facing a lengthy, expensive legal process? Has the sister been evicted in the past? Is her credit score a 300?
I would say that the decision to add her to your lease would depend on the laws of your state. If your laws are tough like MA and if her credit score and history suck, then you might be better off making sure she's NOT on the lease and have her and your tenant sign a contract stating that she's a long term house guest and not a tenant, that your tenant can not charge her rent. That way she should have to leave when your legal tenant does. I say should because like I started this with, I no nothing about the RE laws in GA. If it's easy to remove a tenant like in NH, then it really doesn't hurt to have her as a legal tenant and paying some of the bills.
I'm also not an attorney and none of this is legal advice. Strictly the rantings of a madman.