Wtf!

gtmstang

So I spent all day Friday at my desk putting an estimate together. Whole house remodel for a flipper. I gave him a guess months ago at what a budget should be for the project and he bid on the house accordingly. My guesstimate was $28000 to $35000. He closed Thursday and said get to work on scheduling and get him a hard price.

$32000 and some change is what it came to. When I gave him the price he lost his mind. I'm ripping him off and I should be happy he is offering me the work. "So many people out of work these days I can get this done for half that from people on CL" he said. I told him to screw himself and find someone who can pull permits and do work legally for less. Oh and by the way I know the inspector in this area so dont try to sneak around a permit.

Jacka$$ calls today and offers me and my crew $15 hr. and he will handle all material and permits, I just do the work. I asked about my overhead. He said dont worry about insurance or anything we arent doing anything dangerous so it shouldnt be an issue. We are putting on a new roof and painting a 2 story house. Thats got no potential to be dangerous huh. Payment under the table and all is good. I get to save on taxes. Screw yourself was my answer again.

WTF! It wouldnt be so bad, but this is my fourth quote this year thats went like this.

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www.morganconstructionandremodeling.com

A W Smith

rather than blow up at him just tell him that he is not a good fit for the quality of work you are accustomed to performing and just walk away. showing that you are angry tells him you were counting on his work which is why he called you back with the cash offer.


you might want to drop a dime and call your IRS office while your at it. or even the INS

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Al Smith
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deckndave

I say f _ck him and the horse he rode in on. Hang in there man, times are sure tough right now!

naptown CR

Walk away you came in within budget. What else can you do? Flippers are generally bottom feeders and in this market it's even worse. Hope it didn't take food off the table. I, being the vindictive SOB that I am, would do a drive by periodically and check for permits and perhaps make an anonomyous phone call if there are none and are required. I like the INS angle also. Go get him cowboy

gtmstang

Funny thing is I dont need the work I'm setting pretty right now. Just finished a mid size remodel and am getting ready to start another on Thurs., Huge roofing job on Monday and starting a shop next week also. Master bath tile job on Fri. and all here is good.

I got pissed because I did a quote, set my subs schedules and had contract in hand to get signed. He never flinched at my original guess on cost so I thought all was good. I've done a house for him already. He knows what my company is about. Thats why originally he wanted us. We are almost always on time and budget for "dress-up" projects.

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Dustyrose

The guys an idiot. A lot of Flippers think the same way. They all want something for nothing. It's okay for them to make 40k on a flip but we are ripping them off for a couple thousand dollars worth of labor.

I actually had a flipper tell me one time he wanted my quality at crack-head prices. I laughed at him. I honestly believe that some investors enjoy chasing laborers to complete a job as much as they enjoy finding good real estate deals.

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deckman22

The new golden rule for construction, don't deal with house flippers period.

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www.alscustomdecks.com

Hardly Working

Just went through this with a previous customer. I've remodeled his Barber shop and have done multiple projects at his home. He called me one day in a panic, his girl friend had some guy start tearing down his deck. The guy was going to build a new deck. The only tools he had were a hammer and a cats paw.

I had bid the deck last year so I put new pricing together and gave him the bid (just under 8K) He was shocked by the number asked if I could go any lower (lots of people out there looking for work he said). Went to his house with contract in hand suddenly some guy shows up to look at the deck he asked if I could come back in an hour. I came back and he told me he was going with the other guy because he was 2K lower. I told him when things go wrong ( like his bathroom remodel) I made it clear not to call me to try to fix it and don't bother calling me for any other work.

I hate nothing more than people wasting my time taking my designs and running off to some low ball hack so they can f it all up.

Hated to loose a customer but it's better to cut my losses now.

Jordy3738

Estimating can be an incredibly frustrating event in the life of contractors and subs. I'll never forget when I got reamed out by a contractor for being three thousand dollars higher than someone Else's quote for a high-in job.

A wise man once said, "if anyone's going to put me out of business it will be me."

Stick to the guns, that's my motto.

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BirmanBuilders

It's got a bit crazy out there. Spoke to a GC I've done a lot of work for the other day and he told me about the last project he lost. Big commercial space remodel. He's preety tight with his pricing and it came out to 800K. He spent 100hrs of his own time dealing with the client and pricing and finding problems. $500 on prints to hand out to all the subs, then when the bid was put forward along with the other 10 GC's he was bidding against, the owners turned around and said that " All you guys are too expensive we're going to tackle this one ourselves." At what point do you start charging for estimates? I know around here if you even think about charging for your time they won't even look at you. Back to the original post though, I think you rates are way too high I watched a flipping show on TV and apparently you can do a whole house remodel for about 4K! I'm off now to put in a new kitchen for the grand sum of two buttons a paper clip and some pocket lint! Hope you have better luck in the future, but remember guys, put a penny on your head and that's all your worth.

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Darwin

omg !

A W Smith

I completely missed the fact that he was a flipper. should have said, Yeah I'm a flipper too and flip him the bird.

If this economy has one bright spot. Its the banks foreclosing on all those flippers stuck with houses they cant carry or sell. they deserve financial ruin.

__________________
Al Smith
http://www.awsmith.com

J F

It's too bad it's not normal business practice in this industry to charge an estimating/design fee for the time involved. We've screwed ourselves so much with this "free estimate" crap that our time is deemed to be worth exactly what most charge for an estimate...NOTHING.

"Free" estimates is so deeply ingrained in EVERYONE'S mind that most contractors go off on a rant "I can't charge anything for an estimate, that just wouldn't fly around these parts, no one does it, how can I?" whenever charging for the time involved for estimating is mentioned.

How can any of our time be valued by a prospect when it starts off as "free" to begin with? It's hard to charge very much for something (our time...be it estimating, labor or whatever), when we give it away for "free" to begin with.

Just sad, that the general population, as well as most in this industry think our time/experience/expertise is worth nothing...and then we're surprised when any prospective client wants our work for peanuts...just sad, but we do it to ourselves for the most part, I believe (and yes, I deal with the same shiite...)

gtmstang

Well here is a new one for me. He called again today and asked if I had the materials quote and if I would give it to him to save time.

I told him how long I had on the quote and if I were going to give him the materials list I needed to be compensated for my time. How much? I told him my time is very valuable, I dont want to feel ripped off so $5000.00 should be enough. He said I was being unreasonable. I told him go on CL and find one cheaper, you could probably find someone to do it for half.

The silence on the other end of the phone was priceless. I dont think I'll get the 5 grand. Oh well, back to concentrating on my other projects.

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J F

naptown CR

In regard to "free estimates" we have all missed the point on what an estimate is.

Websters dictionary defines estomate as follows

1archaic a: esteem b: appraise2 a: to judge tentatively or approximately the value, worth, or significance of b: to determine roughly the size, extent, or nature of c: to produce a statement of the approximate cost of

Now when the OP originally walked the job and gave him the ballpark range that qualifies as an estimate. He estimated to job to be between x and y dollars. At this time the estimate was given and the free part is over.

Creating a proposal or contract or whatever you want to call it is not an estimate. It is a legal document that will be used to determine the cost extent and payments of the particular project. You are now creating construction documents and should be paid for your time.

I have been on many sales calls where I give an owner the ball park range and explain that I will not be producing a proposal. At best I would write the range on the back of a card. If they wanted to proceed from there with product selection sub bids etc they would be required to pay a retainer for this Typically $1000.00. This would be applied toward the project and I stipulated that if the final price was more than the estimated range I would refund their retainer should they not proceed. The danger and had to be carefully watched is the budget from this point on. You have to document every change to the scope of work as HO's have no idea what things cost and can drive up the price on a project very quickly.

J F

But, why are we expected to 1) Drive to the clients' home 2) discuss their project 3) Give a "ballpark" .... all for "free" ?

Even on a "simple" project, you're going to have 1 1/2 - 3 hours of your time, with drive time, sit-down, not to mention vehicle expenses involved...but it's all "free".

I know it's fairly common for some trades to have a service fee for just showing up...how did that happen? (seems to be the way to go, no?)

J F

not missed at all...I'm talking about our time/expertise...why is it "free"?

naptown CR

I see your point but the initial call is not about giving a price as much as an opportunity to sell yourself and your company's particular skills expertise etc. Chalk it up to marketing if you will as at this point that is still what you are doing.

J F

I agree with you, this thread just had me pondering (yet again) why we, as contractors, are expected to give away "free" estimates/ball-parks/milk and cookies...

...while a smart business charges a service fee for coming to to estimate/ball-park how much it's going to cost me to fix my garbage disposal/washing machine/refrigerator/add an outlet to my garage...regardless of whether or not they're there for 5 minutes and end up doing the work or not...hmmmm

They definitely have the right idea I do believe.