General Contractors refusing to quote without them buying materials
Rental Property Investor · Member since 2023 · 5 posts · 16 votes
General Contractors refusing to quote without them buying materials
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesAs a long-time Contractor I would never bid on a job where the customer wanted to provide materials themselves. Nothing but headaches....and it's just plain rude. You want to buy the products, but I bet you won't be there to meet the trucks, inspect the materials, unload them or see to their security until they are installed. Right?
You expect the GC to do all that for you for free correct? And then when there is a mistake in the order (because the customer never knows what the H they're doing) then it's a big delay which gets blamed on guess who? Yep, the GC....
@Svetlana Kazantseva if you want to save money (or use your CCs), then it's only fair to pay the GC the money it is costing them to do this your way....I would offer them 20% to start and see what they say. But you will lose any good GCs and end up with the new, inexperienced, unlicensed guys...it just ain't worth it....
132 Replies
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesWas he a State Licensed General Contractor? Doesn't sound like one...and not because it was a small job, that's hardly the point. And of course he could be 'legit' but he's not the guy we're talking about, we're talking about real GCs with crews and subs that really know how and have to run a business correctly....
Quote from @Adam Odom:
Again, context, nothing is black and white. My contractor used my Lowes card for a roughly $2,000 renovation on a currently owned rental. Not a million dollar addition, not a new build. To say a contractor isn't legit because he gets stuff at Lowes is a little exaggerated. - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Quote from @Viorel Verka:
It is my business as well, as an owner, and I am looking for my best deal and to protect my interest. Since I pay, I chose who and how, not the other way arround. My money, my rules.
As this post is about GC's, almost nothing you said here is correct.
Yup, your $, your choice in GC, 100%, and that's where it stops.
The rules, are the IRC of the area as adopted by local ordinance, and the GC's rules. As for as who and how, no, you get very literally 0-say. Again, the who and how is directed by IRC in local ordinance and the GC.
And that's it.
Other than inspector (better know as "the hand of God") comes in and say's "nope, do it this way", and yeah, "hand of God", what-do-ya-do, you do what they say. I mean, you argue, yeah we argue, were GC's, but in the end were almost always doing what "the hand of God" says, but ya gotta argue at least some, lol.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Viorel Verka:
It is my business as well, as an owner, and I am looking for my best deal and to protect my interest. Since I pay, I chose who and how, not the other way arround. My money, my rules.
Nope. Not your rules when you are dealing with a legit GC. Not even close. You can certainly choose who you want to work with, but you cannot choose how they run their business. And the bonafide, good General Contractors will have their own rules, and their own contracts that you will have to sign in order to work with them.
Or you can just continue to use handymen and unlicensed Contrs....
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Quote from @Bruce Woodruff:
Was he a State Licensed General Contractor? Doesn't sound like one...and not because it was a small job, that's hardly the point. And of course he could be 'legit' but he's not the guy we're talking about, we're talking about real GCs with crews and subs that really know how and have to run a business correctly....Quote from @Adam Odom:
Again, context, nothing is black and white. My contractor used my Lowes card for a roughly $2,000 renovation on a currently owned rental. Not a million dollar addition, not a new build. To say a contractor isn't legit because he gets stuff at Lowes is a little exaggerated.I started my remodeling shop with my reputation, tool-belt, hammer and..... a car. yeah, embarrassing, I didn't even have a truck at the time. Point is, I am not poo-poo'ing the Handy-man's, the young-bucks on the come-up, I did that grind myself. What I am saying is to judge and assume GC's, as a whole, should or do operate as such is wildly incorrect.
Yeah, on the come-up I let client's use and abuse the hell out of me, it's the grind. I didn't know better, I learned better, and did better going forward. So when I talk about those with a GC license learning as their experience grows, it's with 1st hand experience of yours truly as well.
In time, efficiency is required. That meant I handled all material orders, deliveries, because it made a huge time difference. In end, that saves everyone, GC and client $-savings.
- 3yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
are we helping you? =)
in my experience, the bigger the job, the more likely the contractor is going to want to supply the materials, and so if you want to price compare, just get multiple all-in quotes.
if you want a handyman to install a new vanity for you, you can probably buy a vanity and have them install it. if you want a bigger job, good GCs just want to take care of it.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Nicholas L.:
are we helping you? =)
I know, I was just thinking about the poor OP and what she got started... :-o
But a good conversation and one worth having IMO. Thank you, @Svetlana Kazantseva!
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes3y
@Bruce Woodruff And then we will here from the OP a title " My contractor took money and wont finish the job "
- Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes3y
@Svetlana Kazantseva thanks 1) ask them for their quotes 2) keep looking for GCs that will allow you to do what you want 3) this way you can go either direction assuming you can get quotes with using / paying for your own materials
- Member since 2023 · 327 posts · 63 votes3y
Quote from @Svetlana Kazantseva:
Hi all! We have a really hard time finding a general contractor for our repair project in a buy & hold SFH in Kansas City, MO. We hired a property manager after purchasing the house and both contractors they sent in are "skeptical about providing a quote if they cannot use their own materials". In their experience "it has lead to a lot of headaches and delays with the project". We are out of state investors and were going to stick to David Green's advise of getting quotes without the materials for fair comparison + being able to select the material we want, put it on our credit cards. Do you think it's reasonable for contractors to refuse a quote without materials? Should we keep looking?
If you are confident about your strategy continue to follow it.
- Investor · Millburn, NJ · Member since 2016 · 1 post · 4 votes3y
If your strategy is to supply the material and obtain a “labor only” quote, you must find a contractor who will work on a labor only basis. This can be difficult to find. You must remember, if contractor loses time waiting for material to be delivered, exchanged or otherwise, he/she loses money. I have always been of the belief that a contractor deserves a markup on material for going through the trouble of ensuring timely ordering, delivery, transport and exchanges/returns which is inevitable. To your point, there is no reason he/she should not let you put the cost of materials on your own card to earn points. Just know, that he/she deserves a reasonable markup. He/she carries builders risk insurance, you do not. This covers materials in transit and on site. As for picking the material you guys want, that’s a no brainer. You must be allowed to do that. So, look for someone who will work on that basis.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Jonathan Usdin:
As for picking the material you guys want, that’s a no brainer. You must be allowed to do that.
Of course...no one has said that the customer should be limited in choices, it's just that them actually acquiring the products is the problem...
Although I have known builders that allowed no choices in anything. If you wanted one of their houses you took it exactly as they built it...
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Svetlana Kazantseva:
Hi all! We have a really hard time finding a general contractor for our repair project in a buy & hold SFH in Kansas City, MO. We hired a property manager after purchasing the house and both contractors they sent in are "skeptical about providing a quote if they cannot use their own materials". In their experience "it has lead to a lot of headaches and delays with the project". We are out of state investors and were going to stick to David Green's advise of getting quotes without the materials for fair comparison + being able to select the material we want, put it on our credit cards. Do you think it's reasonable for contractors to refuse a quote without materials? Should we keep looking?
Then ask Mr. Green to do your project LOL
Frankly it's best for them to buy their own material, and then you reimburse them after you see the receipt. It is just impractical sometimes. - 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesYeah, Mr Green should be real busy, because he'll be the only good GC doing this...
Quote from @Carlos Ptriawan:
Frankly it's best for them to buy their own material, and then you reimburse them after you see the receipt. It is just impractical sometimes.
And reimbursing after the GC buys is just as bad. Unless the customer adds whatever % markup the GC requires to break even and make some $. (It's called Profit and Overhead...it costs time and $$ to manage materials and products :-) - Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes3y
@Svetlana Kazantseva unfortunately you can’t force them to quote it. Also if they do quote it, as soon as there is an issue they are going to hold it over your head and play the “I told you so” game. Keep looking until you find a contractor that is willing to play ball.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Bruce Woodruff:
Yeah, Mr Green should be real busy, because he'll be the only good GC doing this...Quote from @Carlos Ptriawan:
Frankly it's best for them to buy their own material, and then you reimburse them after you see the receipt. It is just impractical sometimes.
And reimbursing after the GC buys is just as bad. Unless the customer adds whatever % markup the GC requires to break even and make some $. (It's called Profit and Overhead...it costs time and $$ to manage materials and products :-)hahaha maybe I'm lucky, so I just reimburse my contractor material receipt at the end , I only pay for labour (w/ financing).
Frankly, it is technically impossible to buy our own material especially for those small small stuff for drywall, bathroom to the roof. It's wayyyy much more easier for the contractor to buy their own material, it's so time consuming as well when we have not much expertise like him. - Investor · Pueblo West, CO · Member since 2014 · 310 posts · 213 votes3y
I have an unlicensed handyman that did a 27K basement remodel. He is a great finished carpenter and can do minor plumbing and electrical. If the plumbing or electrical gets too complicated, he subs it out. When he subs stuff out, it will take at least one week for those guys to show up because they are coming to my house on their "day off"
He buys everything at Home Depot and then when he checks out they call me to put it on my credit card. If he doesn't use any material, I return it and it goes back on my card. I pay him an hourly rate. On weekends, I served as his assistant to save money. It was a great partnership.
Since the basement remodel we did two additional projects in the 5K range each.
- 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bruce Woodruff:
Quote from @Michael Smythe:
Sounds like they want to hide their markup on the materials!
Quote from @Eliott Elias
Red Flag. They are up charging on the material.
Really guys? Seriously? OMG, a business is adding a markup to their product? Stop the presses because that's never happened before, right...? 🤣
Lol, after many years in business a good GC will build up so many valuable relationships with Vendors, Supply Houses and Subs that they can't even be counted. I ordered so much lumber (For framing) from one local lumber house that not only did I get large discounts but I got free pencils (OMG) and free tickets to local NFL/MLB games, which I rarely used, I would pass these on to my Subs to further cement our relationships. This is how the Construction business works, people....!
What shocks me the most is how Realtors and Investors can be so f'ing clueless about this. It's different for a small investor or first time homeowner, but c'mon guys.....
Yes, I got discounts on almost everything from almost every Supplier or Vendor. Did I always mark up the price to the customer? No I didn't. Sometimes it was the right thing to do, sometimes it wasn't. And it depended on the customer a lot too.... :-)
Often times there was enough profit in the mark-up on the Sub's pricing that I could show the customer that they were getting materials at my price, a big discount. Everybody is happy!
Let me bottom-line this for you newbies out there - you should be happy that your Contractor is marking up materials and you should even encourage it. You want a good company to make a good profit on your job and be around in the future for more work or if there is a defect on your job that needs correcting in the future. Right?
another one line brilliant quote LOL.
From my POV and experience and I have a ton of it in KC usually have 10 or more projects going at once in that market.
if were are talking turnover contractors or light rehab that has to be done to rental standards and to make OOS investors numbers work they are going to go with low end contractors who normally simply do not have the money or Credit to front materials and its mandatory to give a deposit or pay for materials. Although on the flip side pre paying for materials gives huge risk of getting ripped off by these lower end contractors.
If we are talking new construction or Major remodel with multiple subs .. then most of the time the subs have CREDIT and dont need deposits and provide the materials in a lump sum bid they give to the GC who then gives you a lump sum bid. You either like or you don.t
On my new build project in Oregon 90 homes 700k to 1 mil finished product our buyers expect perfection. and as such our subs are the best I can buy.. the ONLY thing I pay direct for is the lumber package and Truss package and the framer does all the take offs for us and that is included in his framing labor billing.. Everyone else pays for the components progress bills on the 25th and gets paid on the 10th.. Given 1 mil or more a month in draws and using bank financing thats the only way it works. - 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Adam Christopher Zaleski:
I have an unlicensed handyman that did a 27K basement remodel. He is a great finished carpenter and can do minor plumbing and electrical. If the plumbing or electrical gets too complicated, he subs it out. When he subs stuff out, it will take at least one week for those guys to show up because they are coming to my house on their "day off"
He buys everything at Home Depot and then when he checks out they call me to put it on my credit card. If he doesn't use any material, I return it and it goes back on my card. I pay him an hourly rate. On weekends, I served as his assistant to save money. It was a great partnership.
Since the basement remodel we did two additional projects in the 5K range each.
I looked up Colorado and they do not require a GC license. They do require a License for electrical and plumbing though so your buddy is operating illegally in case you didn't know (?). And the fact that he can get in over his head might be a warning sign for you as well.
You may be saving money by using unlicensed guys and having guys show up on their days off....you may be losing money....
But you are skating on the edge IMHO, good luck!
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Well of course @Jay Hinrichs is doing things the right way, we would expect no less. And yes, when you're working at the level that he is (and other of us are) then you almost have to do things 'the right way'...when you are doing a basic $5k flip or cheap bathroom remodel, you can sometimes cheat and do things on the cheap...but it is still better to just do it right. It won't really cost you much more when you figure out T/M the right way and you have the comfort of knowing it was done right. And you have prevented future owners or the city from coming back at you, and on and on.
It's really up to the individual - as all things are. Really kinda like a metaphor for life itself.. Do it right or do it wrong...see how far you can just skate by and live on the edge...up to you...
Did I just get all philosophical or what? 😂
- Investor · Canoga Park, CA · Member since 2016 · 113 posts · 50 votes3y
@Svetlana Kazantseva the contractors often have better pricing and know the materials they are getting. I have rentals I'm the same area and have lwr the contractors buy materials. If it's your personal home and you buy the materials then have someone bid the labor that's a little different
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes3y
Even if you could find a contractor to work with your materials , you wont save any money . The contractor will still make the same if not more .
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Matthew Paul:
Even if you could find a contractor to work with your materials , you wont save any money . The contractor will still make the same if not more .
And that's what the newbies don't get.....The Homeowner will save no money, the Contr will actually get more but now resent the HO for messing up the project and causing more delays, It's just a bad idea with a lot of minuses and zero pluses for anyone...
- Contractor · 14423 · Member since 2022 · 3 posts · 3 votes3y
My two cents. I am a builder I do jobs from 5000-300,000. I do not let clients purchase materials on a bid job (or a do not exceed price). I warranty my work for up to one year. If I can’t use the materials and suppliers I know and trust, I can’t warranty it. The call backs stink for me and the client.
If you are getting a do not exceed number from your contractor. Who is doing the material take off? Are you pushing that on to your contractor, if so are you going to compensate him or her for that time to give you the materials list? What if items that are sent come in broken or damaged? Who is responsible for sending it back to the supplier?
If your short one piece of drywall or one bundle of shingles . The crew is going to pack up and leave. Then you’re going to be stuck paying from at least a half a day for someone to come back. Most contractors I work with charge half day(1-4hr) or full day (4-8hrs),If they are a reputable contractor, I would let them purchase the materials. I think it’s well worth the 8-10% mark up for the warranty they must provide.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
@Gary Wurzer +1
I hope people are learning from this great topic...!
- Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes3y
Great discussion! I purchased part of the materials for my first renovation, which was local - kitchen cabinets, countertops, bathroom vanities, faucet fixtures, shower rough in valves, tile for bathrooms. The place (local not a Home Depot or Lowe's) I ordered the cabinets and countertops from wouldn't deliver unless I used their contractor to install them. I tried to find a Task Rabbit with a big enough truck to deliver, which I couldn't find. The GC didn't want to go pick them up (too far away from the project site) so he was fine with someone else installing the kitchen cabinets and countertops and his crew saw them doing the installation. The GC had to give me exact measurements so I could order the right amount of tile (I had to go pick those up). Everything worked out but it took some scheduling and constant communication on my part so the GC know when those materials would arrive. All the other stuff, drywall, insulation, shower enclosures, paint supplies I would have no clue as to what to order. I was on site at least once a week.
If you're doing this from out-of-state it seems like it's just much easier to have the contractor buy the materials. I wouldn't even attempt to try to order any materials or coordinate delivery times if doing an OOS renovation, which is my probably next project. Good luck!
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