All Forum Posts by: Eric Klein

Does anyone know of an institution who will go to 80% LTV on a commercial investment property? We purchased the property with a private loan but need to refinance before ballon payment hits. The property has appreciated significantly and we would like to utilize that to roll into another property. Property is in the San Francisco Bay Area.

Thank you

@Mindy Jensen - I’m a GC from California, specifically the SF Bay Area. California law in regards to deposits on residential projects is 10% of the total proposed project value or $1,000.00, whichever is less. On commercial projects it’s all over the map depending on the client and/or project specifics but typically we carry all of those costs until we’re 30 days into the project and invoice for work completed to date.

As many have said the status of the relationship between GC and owner will carry a lot of weight in terms payment terms. However, we do ask for the 10% deposit for new clients on residential projects or people we have don’t have a long term relationship with. The reason is we want the client to have “skin in the game” even with a contract in place. Many people on BP have talked about getting burned by GC’s, it goes the other way too. Many contractors get burned by property owners and getting paid through the lien process is no fun at all.

Another thing to think about with GC’s asking for a large deposit is their ability to be in it for the long haul and to potentially handle multiple projects simultaneously. Unfortunately, a lot GC’s out there are running their business week to week and month to month. Those guys may give you great pricing but they might be out of business in a few months because their pricing was too good.

My advice is to get proposals from several GC’s, compare their pricing, compare the detail of the proposals (make sure everyone is bidding the same scope of work) and ask around about how they have performed on other projects in the area. GC’s who have been around a long time are guys you can count on to build long term relationships with, they’re generally not the cheapest but they’ll get your projects done with the least amount of surprises/headaches.