All Forum Posts by: Nick Grewe

The repairs and maintenance business is ripe for disruption.  Sourcing and managing contractors is inefficient, stressful, and highly uncertain for the owner...and also inefficient with serious service quality challenges for the contractors.  I don't what the business model looks like that is going to disrupt it, but it's out there for the taking.

Thank you for asking this- I was just talking to a colleague about how bad (or even just "okay") contractors are the most expensive part of investing. 

To me it's simple- show up when you say you will, charge what you said you would and communicate along the way. That's really all I expect. The problem is most contractors show up late or not at all, keep increasing the price along the way because they didn't take the time to write a thorough bid and then they overshoot on their timeline. 

I look at EVERYTHING I do as a partnership- I don't work for you, you don't work for me. We work together to win together. If you are my GC- I expect you to charge me what you bid and generally adhere to our timeline and communicate along the way. 

Sure- sometimes you'll have surprises along the way during a job and not make as much money as you planned. Me too. But there will be plenty of times that things go as well or better than you expected and you'll make more money than you planned. Me too. It all evens out over time in a true partnership, but the problem is most contractors immediately want to charge their client for every surprise they get during a job- that's a two way street. If you give me a bid and then upcharge along the way, don't I have the right to renegotiate the price down along the way if things are going smoothly? Probably not....We win together and lose together, that's how is should work. 

Side note- I am not talking about learning that a house needs to be rewired along the way or there are foundation problems that we didn't anticipate, but little issues like "there was a sheet of OSB we had to replace, so I'm gonna charge you another $150 above my bid." Please don't do that on a $25k rehab.

Main thing I found in decades of doing that was that few GCs have/use the necessary and appropriate paper work. That leads to misunderstandings and will get you in trouble. 

You need: 1) a solid, foolproof way to estimate so you actually make money, 2) a comprehensive and exhaustive Scope Of Work, 3) a good looking Proposal, 4) a legal Contract for your state that protects both you and the customer, 5) Change orders that document both cost and time increases, 6) professional invoices and receipts, 7) all the appropriate lien releases etc.

Actually knowing to be the perfect carpenter comes a distant second......

Communication skills are the number one differentiator.

One of the biggest challenges contractors face is managing client expectations - investors and homeowners alike can sometimes be impossible to please and often not because they are unreasonable people, just because they don't understand.

And even nice people take a lot of energy to manage - and that is on top of managing the job. You will also spend a lot of time talking with people about different options and then pricing them out detailed and itemized and then they tell you they expected a $5,000 job and not $25,000 - you just wasted two days for $0.

Personally I would do this: Free estimates are a verbal range only and I would strictly limit my time to 30 minutes on site. If they ask you to spend the better part of the day on a detailed written estimate someone has to pay for that.