As an investor/contractor am I wrong for not sharing my subs

As an investor/contractor am I wrong for not sharing my subs

Real Estate Agent · Phoenix, AZ · Member since 2019 · 158 posts · 140 votes

I know how I feel about this but I would like to hear from other contractors and investors.

As a contractor/investor I get asked often to

Share my subs with my fellow investors. This is kinda a grey area for me because my subs are not only for my investments but also for my contracting projects. I’ve spend years with wrong subs and losing money and over paying etc to get the crews that I have and even still today I replace guys at times.

How do you feel about this? Do you think I should willing open up my contacts and share my subs? Or should I hold back since I worked to get them? Do you as an investor share your subs with other investors? Do you as a contractor share you subs with other contractors or investors?

I’ve done both sides to this question I have shared my guys and denied sharing but I am curious to know what everyone else thinks about this. I feel like construction is the hardest part of the investment. Everyone is constantly talking about contractor this and that so if you’re good at this part of have a good team you have a competitive edge.

Disclaimer: I am not looking for advice on how I should go about this in my life or business. I am simply asking around for everyone’s opinions to see what people think. Honestly I have made my choices from years of experience and I stand firm by my decisions. Please don’t try to sway me one way or another or don’t talk about me being good or bad for whatever way I do choose. Let’s keep this about your thoughts and opinions.

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Karen MargraveBusiness Member
Moderator
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
4y

What goes around comes around. Where did you find your subs, did they just appear out of thin air? Probably not. If you pay your subs what they ask, and give them work, they will still give you priority. Relationship building is what this business is about. I've never not shared subs with someone, and I've never been let down by subs I sent business to. 

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  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    4y

    What goes around comes around. Where did you find your subs, did they just appear out of thin air? Probably not. If you pay your subs what they ask, and give them work, they will still give you priority. Relationship building is what this business is about. I've never not shared subs with someone, and I've never been let down by subs I sent business to. 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Karen Margrave:

    What goes around comes around. Where did you find your subs, did they just appear out of thin air? Probably not. If you pay your subs what they ask, and give them work, they will still give you priority. Relationship building is what this business is about. I've never not shared subs with someone, and I've never been let down by subs I sent business to.

    I get this happens.. I usually just get asked for a GC and I dont have any GC's to refer out.

    I find most in our area if you ask for referral to a certain sub they will share.

    And I guess if I was asked i would normally ask the sub if they want me to connect them..

    I also worry if I connect them and the GC or owner stiffs them they will be mad at me.

    If you treat your subs well and pay on time and have work for them..  they tend to stay loyal.. they dont have to take the risk of working for an unknown.

  • Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
    4y

    I keep my sub busy full time.  Even if I have to find work for them on my own house 

    This means I don’t have to be concerned about being asked 

  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    4y

    I’m still in the process of finding subs that I would recommend if I wanted to. I’ve had people do good on two or three jobs and then drop the ball. I’ve had people do good on one job and then drop the ball. Congratulations on having dependable subs. I have a carpet guy that I probably would refer out. My AC guy a lot of times doesn’t answer the phone and then when he does he’s ready to work on my project the same day as in replacing the whole unit. :)

    Also it really depends a lot on who you are referring your subs to. Do you mean referring them to your local competitor?

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Joe S.:

    I’m still in the process of finding subs that I would recommend if I wanted to. I’ve had people do good on two or three jobs and then drop the ball. I’ve had people do good on one job and then drop the ball. Congratulations on having dependable subs. I have a carpet guy that I probably would refer out. My AC guy a lot of times doesn’t answer the phone and then when he does he’s ready to work on my project the same day as in replacing the whole unit. :)

    Also it really depends a lot on who you are referring your subs to. Do you mean referring them to your local competitor?

    here is portland we have the HBA  Home builder association that has hundreds of members and as such there is a booklet that is given out with all of our contact info and what we do.. pretty handy deal.. 

  • Member since 2021 · 1 post · 3 votes
    4y

    This is kind of over the top, and if I asked someone who they used for subs/any other work and they actually said they weren't going to tell me out of being insecure that I would steal from them, I'd probably raise my eyebrows and never consider speaking with that person again.

    If someone wants to find out who you use, they can and will.  The secret to your success is not that you called the right sub in the phone book and are now swimming in profits.  Drive by literally any construction project and look to see if there isn't a giant sign outside advertising who's doing the work.  People don't care about this.

  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    As a GC, your team and your subs make up your unique personality as a business. You don't want your competitors to build that same type of team. But sharing an occasional plumber is not gonna hurt anything....

  • Contractor · Placerville, CA · Member since 2019 · 85 posts · 66 votes
    4y

    A sub is a underwater boat or a tasty sandwich. Subcontracting is a contractual agreement between a specialty contractor & the prime contractor, in many cases a g.c. but not always. A specialty contractor is the prime in many instances. Referrals are common networking in most businesses.  All contractors are businesses. The number 1 rule of referrals is for no one to take it personally if a agreement is not made. Number 2 is don't poach other companies clients, if everyone is professional networking benefits all.

  • Mark F.Pro Member
    Rental Property Investor · Elgin, IL · Member since 2016 · 326 posts · 270 votes
    4y

    Funny you should ask this question, as newer but seasoned investor I often try to pay it back from what I learned from those that were my mentors when I first got started and over the last few years have met with a dozen or so brand new investors that had many questions and I was glad to help. Likewise I've always shared my subs with other investors but I recently had a new local investor, who I helped in several ways with questions and guidance, but kept trying to steal my main contractor even AFTER I had a discussion with him of how when he does that he is screwing me over because my projects then are stuck waiting. It's never good to screw over one investor to get a head yourself, I am/was very tempted to call him out by name on here so others would know to be cautious but I will take the high ground. First time EVER I've regretted helping someone in this industry,

    Ok, off my soapbox, didn't mean to steal your threat - subs YES, main contractor NO 

  • Rental Property Investor · SF Bay Area · Member since 2018 · 49 posts · 54 votes
    4y

    As a fellow gc, no way do I share my subs! The more customers they have the less time they have for you and the more the prices rise as a simple supply and demand works out in their favor.

  • Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    4y

    I share referrals among people that I know well and trust.  Making a bad referral is a reflection on me.  And referrals matter...a lot in many cases.

  • Real Estate Agent · Phoenix, AZ · Member since 2019 · 158 posts · 140 votes
    4y

    @John Tyler

    So if you read my post you would have seen that I wasn’t asking you to critique me because I am comfortable with my decisions. I wanted to know how feelings on it. So I am not really sure where you got the feeling of anyone being insecure of thinking someone is stealing feom them because that wasn’t the question.

    Let me word it like this to see if you understand better. Everyone seems to think contractors aren’t valuable so let’s see if you get it worded this way.

    You use a mortgage broker to find a lender for you. They reach out to their network of lenders and close the deal for you with great terms. So next time you need funding you call that broker and Say “hey man I’m closing on another deal could you give me that lenders Info so I can close this without you?” Should he give you his lenders contact info to close the deal?

    Or you go into a restaurant and order the most amazing homemade soup you r ever eaten. So you ask the chef for his recipe so you don’t have to pay him and you can make it yourself.

    The list goes on and on for example I can relate it to. It’s not about worrying that their stealing from you. It’s about them not valuing your time or effort for what you do snd have done to get where you’re at. Granted if I have anyone my subs contact info my subs would charge them more then they charge me anyway so they’re actually probably better off just going through me.

    As a GC and investor I feel as though it’s a gray area as to what I give away for free ans what I charge. And like I’ve already said I am not looking for your opinion about my decisions. I’ve said yes and no to many people for many different reasons. I actually think it’s quiet rude to just expect someone else to so all your work for you instead of getting on the trenches and making the calls snd weeding out the bad ones yourself. If managing a project is what you want to so .

  • Real Estate Agent · Phoenix, AZ · Member since 2019 · 158 posts · 140 votes
    4y

    @Mark Faustrum

    No theft at all I enjoy the commentary and love a great debate with different opinions. So I feel as though it’s like a response I just made about a mortgage broker and asking them for their lenders instead of going through them.

    But as for this guy trying to screw you over is completely messed up. I’ve had guys whom I’ve welcomed into my business to work towards a partnership then I hear from my client a week later that he’s kicking my back in. I told him to take care of a few items for me when he first started and he walked my client around her house saying don’t worry I’m going to take care of all this stuff Justin missed. I’m here now. Little did he know she respected me and told me. Some people are cut throat snd only care about themselves. So at what level should you do the same? Does anyone ask the gurus or multi millionaire investors for their subs or contacts? No and if you did they would probably laugh at

    You. This business is a constant work and always moving parts around. So why should you give this new giy your people? He should get in the trenches and make the phone calls that you made to get them. I just had to get funding for a property and I spend 3 straight days focusing on only that nothing else. Along with a few other half days just to get this funding. Total of about just over a weeks worth of work. Then I had to get all the docs over to 5-6 different people. But this is what it takes to be successful in this business.

  • Real Estate Agent · Phoenix, AZ · Member since 2019 · 158 posts · 140 votes
    4y
    Originally posted by @Karen Margrave:

    What goes around comes around. Where did you find your subs, did they just appear out of thin air? Probably not. If you pay your subs what they ask, and give them work, they will still give you priority. Relationship building is what this business is about. I've never not shared subs with someone, and I've never been let down by subs I sent business to. 

    So I totally agree that this business is built around relationships. I too, also am a believer in Karma. But at what point is it hindering yourself to continue to help others? So if I came into your town and wanted your contacts you would open your list up and give them to me? I made the example about a mortgage broker a few responses back which relates to this question I posted. I just think this is a business so it needs to be ran like a business. Anything you have that helps to run your business is yours no matter how little or hard you've worked to get it. ( in most cases extremely hard) so why should you me or anyone else who has spent years building out our teams just freely give this information over to someone else just starting out who doesn't want to put the work in to building it their self?

    I have had people call me to offer a referral, then turn around and say by the way if you take it I need $5,000. I've also had people charge me to get there architect's contact info. Your getting the referral to save time of weeding out the bad apples so I gladly paid for the architects contact info. It cost a lot of time and money to run through bad people so why should you just freely give all that away. Now don't get me wrong I have people in my phone whom I will give them anything they want and likewise on my side. We call each other regularly and discuss things. But to just freely give your subs info to just anyone I don't agree with. This is a business and things need to be monetized. Same reason so many people charge for mentorships. Its the same thing, they've learned the easy way to do things from years of experience and they will offer it at a cost. In this case the cost to use my subs is my GC mark-up. I feel like people should be more focused on creating value with others and building an organic relationship so that whatever you need will come to you freely since you've already proven yourself worthy.

  • Real Estate Agent · Phoenix, AZ · Member since 2019 · 158 posts · 140 votes
    4y
    Originally posted by @Joe S.:

    I’m still in the process of finding subs that I would recommend if I wanted to. I’ve had people do good on two or three jobs and then drop the ball. I’ve had people do good on one job and then drop the ball. Congratulations on having dependable subs. I have a carpet guy that I probably would refer out. My AC guy a lot of times doesn’t answer the phone and then when he does he’s ready to work on my project the same day as in replacing the whole unit. :)

    Also it really depends a lot on who you are referring your subs to. Do you mean referring them to your local competitor?

    Joe thank you. So yes it is very difficult to build up a good group of sub-contractors and a ton of work to weed out all the bad apples. If I've learned anything is to hire slow and fire fast. I have a new crew right now who went to all my job sites trying to work hitting me up daily, its a new guy, and I finally give him a shot on a difficult framing job. Its an opening for a 90 turn stairwell. So he jumps right into it and its wrong, third go round its still wrong but he's there everyday working through it and fixing his mistakes on his dime. He's not getting paid by the day and I already purchased the needed lumber so everything else is on him. This is a guy that I think will work with me for a very long time. Skills and knowledge can be taught but respect loyalty and hard work can't. So now I just told him to let me know his strengths and I'll focus on keeping him doing that stuff over anything else. And now I know to have someone who can read blueprints and has more experience to go over the job on site next time. He's a good framer just doesn't know how to read plans very well. But I got off on that tangent to say that's its a constant battle. All the time and effort that goes into sourcing training and working with subs is very time consuming. I basically just stating other people in general not necessarily a competitor. I am just looking for others thoughts as investors and or contractors. I am also not for or against either side. I feel as though it depends on the relationship I already have with the person as to what is shared. 

  • Rental Property Investor · New Braunfels, TX · Member since 2018 · 141 posts · 103 votes
    4y

    @Justin Sullivan I am a retired guy from New Braunfels Texas that has built up quite a team of subs for everything a person needs to build/rehab/maintain a house from the ground up. I freely share my list of guys and gals with anyone. I don’t have competitors, I only have future friends that can use good solid people to help them on their own projects.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    One thing I see happening is developer or GC will drive through your project and if they are looking for a framer simply walk up to the framing crew ask who is in charge and get a number

    lot of that going on with labor so tight..  I know i have done it.. I found my landscaper that way.. driving home one day I see a crew working on a small project  stopped the owner was there got his card.. and he ended up landscaping about 60 houses for me.  

    the big companies were doing this quite a bit out here.  I guess at that point its fair game they are public streets its just like driving for dollars etc. And if the sub wants to work for you its up to them.

    GC is tougher I think especially for the fix and flip rental rehab investor..  He/she really has a very narrow niche to work in to make their numbers come out in a way that works when you back into the cash flow they will want to make.  Normally what I see in that end of it is they cant afford true specially subs ..
  • Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    4y

    As a contractorwould I give out my subs number to an investor ?   No Never . I would bid what ever job it is and give the work to my sub and take my profit . Thats how you make money as a contractor 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Originally posted by @Matthew Paul:

    As a contractorwould I give out my subs number to an investor ?   No Never . I would bid what ever job it is and give the work to my sub and take my profit . Thats how you make money as a contractor 

    I think there is the idea of sharing subs between GC  and sharing subs with a non GC investor.. 

  • Member since 2018 · 13 posts · 10 votes
    4y

    @Justin Sullivan

    I give referrals for the people I work with constantly, I can’t hand out enough business cards from subs, vendors, realtors, friends, etc.

    In business, you should want the people you work with to thrive and grow. If they can grow, especially because of your referrals, then you’re doing your part.

    I always give a referral and say “tell such and such that I sent you.” If your subs know that you’re contributing to their growth, they will be appreciative, and they will also know that their work is good enough to make you happy.

  • Investor · Miami, FL · Member since 2017 · 229 posts · 271 votes
    4y

    My main fear with sharing my GC and subs is that the owners or investors who ask me for their information will be a waste of their time and look bad on me. We all know that newbie investors want subs and GCs to take a couple hours out of their work day to drive over to a house they don't even have under contract, to walk the whole property, and provide them a super detailed quote with labor broken out all for free to ultimately not hire them for the job. Or when they actually get that quote to balk at the price of labor because they have no true understanding of a good tradesmans compensation especially in today's market. Everyone is afraid of referring a bad contractor to a friend but I'm much more concerned with referring a bad friend to my contractor.

  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    This is really two different questions.....if it's an investor/owner-builder, that's one thing. Real General Contractors rarely share subs for the reasons mentioned: you want your own 'brand', you want your subs at your beck and call, not everyone else's.....

    That's how you build your reputation as a GC.

  • Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes
    4y

    @Justin Sullivan

    First off, you are asking the internet not to give their opinions of your stance when you are asking for their opinions on your stance..... haha that aint going to happen. If you arent wanting to have a discussion on and are open to other opinions and that you are set in yours...then why ask in the first place? I'm not sayin gyou have to change your stance...but just posting something to try and figure out if its ok to pat yourself on the back is pointless. Just pat yourself on your back and keep going on. 

    Second, I'm in a similar building profession, architecture. My office has built up reputations and track records with different other professions over 40+ years. Consultants like MEP and structural and fire systems are typical consultants we have that are like a GCs subs. And you better believe we have GCs on our list and even some subs too. 

    Third, in this crazy market I can kind of understand your hesitation. Both labor and materials are extremely hard to come by and get on time. This is just something you have to consider now a days. Because at that point its not really about you not sharing with the competition (investor or not) its about getting your job done in a reasonable manor for your client. But go back to a "normal" market and then that argument falls apart for me. If a consultant is in mutually good relationship with us we give each other work all the time. Its a give take...it has to be. If a consultant found out that we werent referring them, how do you think they would react? Thats actively taking potential revenue from them just so we can make sure they have room for us when we need them? Sounds pretty damn selfish to me. At what point are they going to stop referring jobs to you? Its a two way street. A good sub or consultant will do their best to squeeze you into their schedule and give you a fair price. They value your relationship just as much as you value theirs. 

    Fourth, Lets face it, if you have someone coming to ask you for suggestions for subs it means only one of two things. They have a job that doesnt need a GC or they aren't going to hire you to begin with. And in this market, if you arent booking jobs/subs out 6 - 12 months in advance now...you arent going to have them on your job anyways. I can guarantee that they are not holding a spot in their schedule for you, just incase you bring them a job. So giving out info on your subs isnt going to be effecting your schedule anyways. Your subs arent going to try and squeeze in some random nobody but they will try to squeeze you in. 

    Lastly, anyone that knows how to use Google is going to find your subs. If they have half a brain they will be calling a heck of a lot more people than you to find names. If they are smart they are going to job sites, getting names of the subs AND the owner. They will get to your subs eventually and probably sooner than you realize. So this isnt really about trying to save the best subs (and their schedules) for yourself but maintaining a good relationship so when you need a favor, you know who you can count on.

  • Rental Property Investor · Los Angeles · Member since 2019 · 157 posts · 175 votes
    4y
    Originally posted by @Jason Brown:

    My main fear with sharing my GC and subs is that the owners or investors who ask me for their information will be a waste of their time and look bad on me. We all know that newbie investors want subs and GCs to take a couple hours out of their work day to drive over to a house they don't even have under contract, to walk the whole property, and provide them a super detailed quote with labor broken out all for free to ultimately not hire them for the job. Or when they actually get that quote to balk at the price of labor because they have no true understanding of a good tradesmans compensation especially in today's market. Everyone is afraid of referring a bad contractor to a friend but I'm much more concerned with referring a bad friend to my contractor.

    Exactly this! I have a “referral code of conduct” before I share my GC’s contact info with close friends and I would never refer him out to a stranger I’ve never worked with personally in some capacity. The code of conduct includes the following:

    - This isn’t a price negotiation or a bid to bring to the first guy to match. 
    - You are ready to go with your project, that means you are on title not just under contract and have the funds ready to go.

    - You will pay the same day the work is completed, by cash, Zelle or wire. 

  • Real Estate Agent · Phoenix, AZ · Member since 2019 · 158 posts · 140 votes
    4y
    Originally posted by @Nik Moushon:

    @Justin Sullivan

    First off, you are asking the internet not to give their opinions of your stance when you are asking for their opinions on your stance..... haha that aint going to happen. If you arent wanting to have a discussion on and are open to other opinions and that you are set in yours...then why ask in the first place? I'm not sayin gyou have to change your stance...but just posting something to try and figure out if its ok to pat yourself on the back is pointless. Just pat yourself on your back and keep going on. 

    Second, I'm in a similar building profession, architecture. My office has built up reputations and track records with different other professions over 40+ years. Consultants like MEP and structural and fire systems are typical consultants we have that are like a GCs subs. And you better believe we have GCs on our list and even some subs too. 

    Third, in this crazy market I can kind of understand your hesitation. Both labor and materials are extremely hard to come by and get on time. This is just something you have to consider now a days. Because at that point its not really about you not sharing with the competition (investor or not) its about getting your job done in a reasonable manor for your client. But go back to a "normal" market and then that argument falls apart for me. If a consultant is in mutually good relationship with us we give each other work all the time. Its a give take...it has to be. If a consultant found out that we werent referring them, how do you think they would react? Thats actively taking potential revenue from them just so we can make sure they have room for us when we need them? Sounds pretty damn selfish to me. At what point are they going to stop referring jobs to you? Its a two way street. A good sub or consultant will do their best to squeeze you into their schedule and give you a fair price. They value your relationship just as much as you value theirs. 

    Fourth, Lets face it, if you have someone coming to ask you for suggestions for subs it means only one of two things. They have a job that doesnt need a GC or they aren't going to hire you to begin with. And in this market, if you arent booking jobs/subs out 6 - 12 months in advance now...you arent going to have them on your job anyways. I can guarantee that they are not holding a spot in their schedule for you, just incase you bring them a job. So giving out info on your subs isnt going to be effecting your schedule anyways. Your subs arent going to try and squeeze in some random nobody but they will try to squeeze you in. 

    Lastly, anyone that knows how to use Google is going to find your subs. If they have half a brain they will be calling a heck of a lot more people than you to find names. If they are smart they are going to job sites, getting names of the subs AND the owner. They will get to your subs eventually and probably sooner than you realize. So this isnt really about trying to save the best subs (and their schedules) for yourself but maintaining a good relationship so when you need a favor, you know who you can count on.

    So you did exactly what I asked not to do. Instead of answering this in the form of you and your opinions you answered it towards me and guessed what I do. Ive already stated that I've been on both sides of this and I don't care for your opinions of how I do things. I simply want to put this out there to see what everyone else thinks. I've heard people on both sides of this so just collecting more information. No need for validation from you to pat myself on the back. I stand by my decisions and don't care how it makes people feel because I care about my family and myself first, then everyone else. My main reason for posting the disclaimer was so that people didn't bash this post with nonsense guessing what stance I hold. I want this to be a mature debate about a question that I know everyone has different views on which by the responses its clear this is true. Ok now that I've gotten that out of the way...

    I am not worried about my subs not squeezing me into their schedule or losing them to someone else, I am also not worried about the competition. My main thing is I kind of find it rude for people to just expect the work done for them that easily. As a GC the competitive edge one holds is having great affordable subs. This will allow them to charge a reasonable price for the job and also have a good mark up for themselves without being to crazy high in price. I've had people come to me as a sub-contractor and give me retail pricing like I am a homeowner before. That isn't going to work. All of the marketing and bookkeeping and sourcing materials and estimation goes into jobs with homeowners but doesn't with a GC. I give my subs a scope and either tell them to give me their labor price or ask them if they can do it for "X" I do understand that the grey area is if I deny I am actively taking money out of their pockets but if I have worked to get them why doesn't said investor just go through me? Knowing that I am a GC why don't they just ask me to give them a quote for said item instead of trying to get my subs information slowly racking up a list of contacts. It starts with a property manager, then a painter, then a plumber and before you know it this one person is completing their jobs with your crew that you spent years to get and its only there 3rd project. 

    So you are an architect or in that business. Lets say you have a draftsman whom you pay 1099 who types all your plans up and all you do is give them the details of sizes and stamp it off. Imagine someone came to you and said can I have your draftsman information so I can make my own plans? what would you do? Do you share it with them and cut yourself out of the deal? Or do you respectfully decline. Think of this in terms of some random person or a past client asking you for your contacts, not people of your network with whom you regularly share with. Honestly I wanted to have everyone in our meetup group get together and order bulk materials toilets everything and keep a storage unit so we all worked together and saved money. I am actually cool with sharing I am not cool with giving away. There is a difference.

    If someone is going to job sites and googling names and regularly sourcing contacts then I will gladly share some subs because I believe that they will return the favor with me if I ever need it in the future.

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