All Forum Posts by: Stephen Gallagher

I only see one feeder coming out of that meter socket.  Although a load calculation can be required, there are many factors still unkown.

Is this a single family home?

How many square feet?

What are the two 150 amp panels doing and how are they connectes?

What are the loads in the house: electric baseboard heat; heat pumps; AC units; laundry; other motor loads.

I am failing to see why you would need a 400 amp service without a proper load calculation.

There is no code restricting the number of sub panels, they only have to have the correct install and protection.

If I were in your shoes, I would connect with a licensed and insured electrician and ask for electrical audit.  It is worth every penny of that $300-$500 charge.

Stephen Gallagher

I have consulted on several electrical inspections and audits of work performed, followed up by a written report of findings.  In all of these occurrences, there has never been an issue with public utilities, or code enforcement.  

Several of the inspections resulted in non conforming work a d an estimate for correction was included.

The least expensive event was around $500 (inspection for utility), up to 10K (report, repairs, inspection) addressing issues.

Knowing a good electrical contractor can solve some of your issues.

The issues you presented,  in my opinion created a voidable contract.  I would present your estimates for what they are not willing to comply with, and either amend the contract with your reduced offer,  create novation with new offer, or avoid the contract and walk away.

Stephen Gallagher 

 Then you will have to address your cost over runs and your time delays.  

If the company you are doing business with, is requiring a 50% deposit and you are refusing, then I'd say you are not doing business, you are looking for a different contractor.  

When you can't find one, and realize that the project could be delayed for a long time, don't be surprised, if and when you go back to the original contractor, the price has not gone up significantly for their previous efforts, or they may not even talk with you.

YMMV

Stephen Gallagher

I would do my due diligence and vetted them out just as I would for a new tenant walking into my property.  I would seek three references minimum, I would ask for their proof of insurance, I would ask for their license information and I might even ask for their financials.  But I know that if they want to remain in business they need to maintain their registration with the states attorneys general, they need to maintain their licenses and they will need to maintain their professionalism or go out of business.  I think the saving grace in the Electrical and Plumbing is they legitimately need to be licensed and insured to remain in business and if they are not then you don't hire them.  All four states I am licensed to work, you can do a license lookup and check their status.  You can also checkout their online presence with minimal effort, Yelp, Face Book, Better Business Bureau etc.  

So the answer to your question, yes, 50% deposit is normal and I know I have vetted them to the best of my ability.  Depending on the amount of the job, I may also require them to post a Bond.  Work the contract.  If I didn't have time to do all the vetting myself, that is why I would have a vetted GC.

"Not all investors are the same, nor all contractors are the same. But truth is , there is an additional risk for the investors to put that sum up-front without means of enforcing them to comply with the contract."

Risk vs. reward goes both ways.  I have been involved with a couple projects that had over 100K in switch gear and materials.  The bank funding the project rescinded funding after the materials were ordered and contracts were signed.  In addition to having to fight with the investors, the supply houses also had to have further negotiations because of restocking fees.  Thankfully for the contractor I was working for, had all his ducks in a row and a solid contract and the investor was held responsible for all restocking fees.  This job was one of the reasons I started requiring a deposit on all jobs over 3K.  My time is worth money.  My time bidding, my time pulling permits, my time creating contracts, my time on the phone with the investor, my time with the contractors, company meetings and overhead.  All that comes from the deposit.  Phones, Cable, Faxes, Equipment, Utilities Insurance, wages etc.  all need to be paid somehow and that is one place the deposit comes into play.  

Time is money and my time is worth money.  In business to make money not help others reap the rewards from my hard work. 

Well Said.

@Victor S.

You are welcome to that opinion, but it is no different than a first time investor piggy backing on someone else's deal or using someone else's money for their investment.

It is all perspective.

When I first started my electrical business I had nothing. I used every tool in the box and offered them all to my customers. I let them buy materials, I let them shop with me, I even let them help me. My money should not be funding your project.

Starting any business is a leap of faith and if you want to succeed you will do whatever it takes to keep forward progress. Being upfront, honest, and open, have been the keys to my success. Most legitimate negotiations have a give and take.

1/3 deposit, 1/3 at rough inspection , 1/3 at finish inspection is a great model on most bath, kitchen, addition jobs 3-10K. More than that the draw schedule is a good practice.

I often remind myself there are three sides to every story, ours, theirs and the real one.

I am appreciative to those customers that were easy going enough, and trusting enough to help get my electrical business afloat. Knowing my customer base also afforded me the ability to conduct business and reap the rewards of many satisfying referrals.

StephenGallagher

@Laura Williams

I am curious why you don't pay down the principal and pay them off.

Refinancing to 30 year makes no sense as you start over paying interest only.

Take some of your surplus income and pay off the properties and turn all of that into positive cashflow.

You would benefit from searching You Tube for terms like,

Pay off your mortgage early

Stacking pay off

HELOC payoff mortgage

Seems to me you are in a position to be debt free and income rich in just a fee years.

Not sure what your equity is or appreciation, but another option would be to do 1031 exchanges.

Good luck.

StephenGallagher

@Alex Varner

There are too many variables with your question. Are you referencing a general contractor for a large scale project, or specific trade contractors? Perhaps you are referencing a handyman. In any event, a deposit is not out of the norm.

A GC may have to provide a deposit to their subs, buy materials and upfront labor. The difference between the new GC and a seasoned one is their cashflow.

I am an electrical contractor, and if you want to get on my schedule (3 weeks booked out) it will require a deposit, typically 30 to 50%. This is for jobs 3k or more. Jobs not bid and under the 3k threshold are billed at time and materials +25%.

When I first ventured out on my own, I had zero cashflow, zero money saved, and zero reserve funds. I could not pay for your materials and struggled to put food on my table. There are many reasons a contractor may need a deposit.

There is so much work right now and fewer people getting into the trades, you will see more and more, the requirement for a deposit, especially with first time relationships. As you continue to use the same contractor and their is an established repoire you may not need a deposit with future jobs. Their are just as many dead beat real estate investors and just as many slum lords trying to take advantage of fledgling contractors as their are shady contractors. Their is a reason a mechanics lien is a thing and a reason anyone hiring a contractor should ensure they have a contract and expectations are spelled out.

Times are only going to get more difficult hiring contractors in the future. This evidenced by the labor rates. Supply and demand is impacted exponentially because the diminishing number of trades people. The average age of a licensed electrician in the state of New Hampshire is 57, with many retiring in the next few years. In my region, I am seeing other electricians billing out at $125 per person, 2 person minimum and a 2 hour minimum.

If you are not comfortable witha 50% deposit for a trade, I suggest you drop everything and start an apprenticeship. Rates are going to continue to rise as availability decreases. Your projects will have to adjust timelines.

StephenGallagher

@Christopher Bunge. The cost difference from 150 to 200 is negligible.  The availability of 150 is becoming scarcer.  In my region 100/200 are the norm.  

@Tina S.the national electric code requires free and clear access 3 and 1/2 feet in front of the panel, the width of the panel, from floor to ceiling. Having to move the fridge to access or having to reach over a counter, is a clear violation of the code. Upgrading to 200 amp may or may not e necessary, but is an added value. Also note in future code changes, the shift to have a disconnect at the meter for safety of firefighters will be trending. If you can swing it financially, do it. For my business in NH you would be looking at 3-5K depending on what other work is required.

Hope this helps.

Stephen