All Forum Posts by: Roger Doe

Interesting ideas.  Why would going to Lowe's and Home Depot work?  I think some of them are actually contractors who can't get jobs.  So their referrals wouldn't be the best, I'm guessing.  But I might be guessing wrong.  How did they turn out?

I hate referrals because I have found them to be the same as throwing a dart in the yellow pages.  The quality of the referral depends upon how anal the person is but even then, I've gotten referrals that have turned out really badly.

Bump.

Nobody has any ideas?

Where is the best source to find the best contractors and vendors in your area?  Where do you go for referrals?

To start the discussion, I'll say that you can go to Yelp and Angie's List for smaller properties.  For bigger properties, BlueBook is supposed to be a good catalog of companies but you have no idea if they are a good company or not.  For the bigger companies, there is not much info out on them since their clientele list is so much smaller so there naturally will be less info out there on the companies.

I've been doing this for a while, privately growing my real estate portfolio.  And, I've had to open up new offices as I've grown because I've also taken in some property management business as well.  Does anyone have tips that they'd like to share on how to encourage profits in the offices that you don't directly oversee?

Here is a tip that seemed to work with me.  I've actually instituted a system of PROFIT sharing (not revenue sharing) with the managers that's only tied to results of that office.  When i first started, nothing seemed to work.  A higher paycheck for the manager didn't seem to motivate him signficantly more.  Neither did random visits to the office.  Since, then, I've learned a few tricks and tips which I executed that seemed to really work.

But, I'd really love to hear what other property owners/managers have done to make sure that satellite offices are just as motivated as the ones that you personally oversee.

Let's exchange ideas!

How do you tell if a price on a job is too high or not?  When you start out, you bid the work out and get several estimates.  But after a while, you have to stop doing that because the contractors will stop coming around because they feel that you are wasting their time.  So, soon, for example, you settle on an electrician that you think you can trust.  But you can never be sure, right?

How do you tell if the next job that they do for you, they aren't taking advantage of you, especially if you have larger buildings?  I definitely notice that the job price goes up by the size of the building.

For example, I just noticed that on one invoice, they didn't put the model number but it was a unique part.  I checked online and the part was only $15 but he charged me $400 just for the replacement.  This was a company I thought I could trust.

So, how do you see if they are charging you a fair price?  Do you ask for the equipment invoices?

Btw, do you guys really ask for certificate of insurance from every vendor and contractor that you use and have them add you as an additionally insured?  Or does that never really gets done.

Mindy, thanks for your view of things.  I paid them already but I can get them to come back.  I'm experienced enough to know how to make them come back.  I just feel bad that I'm going to make them take apart everything, probably throw away expensive piping and start all over.  I could tell that everyone is having it rough these days and it's not exactly a botched job.  The steam leaked in two places which shouldn't occur with new piping.  Of course I can only have them take it apart and reseal them.  But, it indicates the quality of the work they did and I don't like shoddy workmanship.  It's not what I would have expected even a few years ago.  I think the economy is hitting plumbers like everyone else and they just rush through jobs instead of doing it the "right way".  I could tell they didn't clean out the low water cut offs like they were supposed to, etc.

Two examples this week alone, a generator company tried to pass off a $15 dollar part for $400.  I guess he didn't think that I could just go look up the real cost online.

Elevator company gave me a proposal for about $500 worth of work for $2500.  I guess he thought I would check the proposal and just sign off on them.

The bottom two cases, I have no problem confronting them.  It's clear cut.  But in the first case, he's going to take a loss if I demand he does the entire work all over again.

I know what the owner will say when he comes to inspect.  He'll come over and automatically say that he doesn't see anything majorly wrong even though he knows inside it's bad workmanship.

I just sense all these contractors are just either getting more greedy or they are feeling the pinch.  Not sure which.  Some contractors have always been trying to get away with shortcuts but it just feels like it's a lot more these days.

TLDR: Company did shoddy work that is beneath my standards.  Should I make the contractor come back and do it the right way even though he has to take a loss?

Here is the long version:

I have a problem that I hope people can help brainstorm perspectives.  Here is my eperience.  I've been doing this for a small bit now (10+ years) so I know a small amount of construction but as an investor, I'm not an expert.

Here is the problem:

New contractor.  Steam systems are a dying business so it's hard to find people who know what they are doing.  My usual vendor couldn't schedule so I vetted and picked the best one I thought was the best of the worst.  (Is it me but is it harder to find good plumbers these days?  Plumbers that will do things the right way?)  Scope of work was installing a large section of steam piping.  The final result looks terrible.  I know quite a bit about how complex steam can be.  It's hard.  But the steam part isn't really relevant here.  It's the poor workmanship.  I'm never going to hire this company again (not because of one bad crew but I now notice more red flags now from this small business.

But I'm a terrible businessperson because of my morality, integrity, and kindness  As I get older, these values get stronger.  I hate it.  I don't want to hurt people even though they caused me harm.  I feel the middle class is getting shadier as things get tighter so I don't necessarily blame them.  I feel sympathy even though he tried to screw me.  (I get screwed so many times a week.)  (Btw, dont tell me that integrity in real estate is important.  It's such a shady industry like so many others.)

Simply said, the pipe work is shoddy.  That alone can't violate a contract but there a few things that are clearly wrong so I can get them to come back and fix them.  My options:

1. Should I make them redo the entire work?  Tear apart all the pipes and start fresh.  Make them come back with a different crew and do it the right way?  They will obviously take a loss for the job.  I can't legally force them to produce beautiful work that I love.  (It actually makes me proud and makes me work harder.)  I can only force them to correct the areas so they meet the the manufacturer's specs.  But there is a good chance that I can demand and push the owner to start all over when I send over pictures of the final work.

2. Or, should I let it slide and make them just fix the outright things that will allow the system to function properly.  It'll last a quite a while but not anything close to #1.  It's not in public view but I'll see it a lot as I pass by it.

Which option would you pick and why?  I know I should do #1.  My partner isn't facing the same moral dilemmacorrectly reminds me that I dont want to get into a stressful situation that will last for days while I have so many other projects going on in which makes me totally busy and stressed.  Stop sympathizing, make the quick decision and tell the owner about the idiot crew and force him send his best crew to do it correctly.

When I was younger, I would have picked #1 right away.  It wouldn't be that stressful for me because I saw the world much more simply back then.  Force the owner to come back and do it the right way.  It's not my problem that his crew did a poor job.  Why should I care that they did a bad job and take a loss?

But I think this is the reason why the US is falling faster as the middle class takes a nose dive.  Everyone is trying to scam each other in the middle class because money is so tight.  (Obviously, the .1% has taken it all.  eg. The Walmarts own 40% of the US's wealth.  It makes me sad that the white middle class ala Trump is fighting against the wrong enemy- China outsourcing and Mexican labor.  They are fightint for the table scraps and the two sides really hate each other.  Don't they notice that Alice Walton built herself her own "personal" museum with untaxed foundation income that she didn't contribute a penny to?)

Sorry for the long rant but it demonstrates why I feel for the small plumbing company and how even such seemingly black and white decisions that only involves $5,000 (It's alot but it's not going to put anyone out of business) is hurting my productivity.  (It's important to me to make correct but quick decisions to get things done.)

But I want to do the right thing.  Even though I'm not that wealthy, money as I get older has lost its glamour.

Which course of action would you take?