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Discussion Starter #1
Hi all,

My question is in regards to a builder's fee to a general contractor. I've been with this company since 2017. I charge them $500 a month to use my builder's license. My fee hasn't gone up at all. The last couple years they grossed 8 million. I was wondering if you guys can give me some advice as to what to charge. I feel like I'm due for a raise but don't know what to ask for. If you guys can help me out I'd appreciate it. Thank you!
 

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Kowboy
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Tell them it's time for a renegotiation. You wouldn't be out of line to triple or quintuple your rates.
 

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Are you an actual employee getting paid to do a job, and collecting $500 on top of that? If yes, i think you should stay quiet and enjoy the bennies of a profitable employer.
 

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Discussion Starter #5
No I'm not a paid employee. That $500 is 1099. So at the end of the year I get a 1099 for $6,000.00. I don't know if this pay is fair. What are your thoughts for that?
 

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Capra Aegagrus
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Since 2017, what has changed regarding your expenses and the service you provide to the company? You might be entitled to a cost of living increase, but not much else.

What they're grossing is pretty much irrelevant, unless the increase in business ups your risk. If that's the case, you might be justified in upping your fee by the same percentage their business has grown.
 

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Carpentry
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There's always the old fashioned way of seeing if you are getting a good price: shop around.
 

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Discussion Starter #8
Right, I thought about that but don't really know how to go about it. I'm in the roofers and waterproofing union, this is like my secondary gig. Obviously I don't want to get taken advantage of. I do appreciate your advice.
 

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Carpentry
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I dont know much about buying and selling licenses as we dont do that in my state, but I do know a large part of the construction industry runs off craigslist. U been on craigslist?
 

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Discussion Starter #10
I was thinking of using that, I was just uncertain on how reliable it is. I'll definitely take a glance at it. I'm in michigan, all thats required is a power of attorney to pull a permit in someone else's name.
 

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GC
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Since 2017, what has changed regarding your expenses and the service you provide to the company? You might be entitled to a cost of living increase, but not much else.

What they're grossing is pretty much irrelevant, unless the increase in business ups your risk. If that's the case, you might be justified in upping your fee by the same percentage their business has grown.
I would say exactly the opposite. His value to the company is they can't operate without him, or another fellow who's willing to lay his license on the line for peanuts. I'd be asking for 1.5% of the gross, and a contract that guarantees my protection.
 

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Carpentry
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I would say exactly the opposite. His value to the company is they can't operate without him, or another fellow who's willing to lay his license on the line for peanuts. I'd be asking for 1.5% of the gross, and a contract that guarantees my protection.
I'd like to ask that also, if the market will allow it. As Kowboy mentioned earlier, the market sets the price. All we do is decide if we are at the top, middle, or bottom of market.
 

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Discussion Starter #13
Thank you Ponder, thats exactly how I feel. If a install goes wrong I'm on the line not him. Unfortunately even with a contract I'm still liable for improper installations or mistakes. I'll take your advice. Thank you so much for it!
 

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Discussion Starter #14
I'd like to ask that also, if the market will allow it. As Kowboy mentioned earlier, the market sets the price. All we do is decide if we are at the top, middle, or bottom of market.
Thats what I'm trying to figure out. I don't really know the market. I'm trying to base it off indeed and you guys lol. I worked hard for the license and I don't want to get taken advantage of.
 

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Carpentry
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You are not going to learn your market on this forum. If I wanted to learn my local real estate market I would be on zillow every day for a month checking out prices, for example.
 

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Carpentry
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The state that I am licensed in ... the state regulations say that the qualifier must be a w-2 employee. Have you looked into that? Is what you are doing legal in your state?
OP - If you are a "1099 employee" then they really taking you for a ride.
 

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Discussion Starter #18
You are not going to learn your market on this forum. If I wanted to learn my local real estate market I would be on zillow every day for a month checking out prices, for example.
I know that but I can get knowledge from you guys. There's not really a good place other than Craigslist.
 

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Discussion Starter #19
The state that I am licensed in ... the state regulations say that the qualifier must be a w-2 employee. Have you looked into that? Is what you are doing legal in your state?
I'll definitely have to take a look at that. Never crossed my mind and I didn't learn anything about that in the builders class.
 

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I'm in michigan, all thats required is a power of attorney to pull a permit in someone else's name.
I'm in Michigan and I'm not a lawyer, but I believe that's not true. Here is the relevant paragraph:
A corporation, partnership, association, limited liability company, or other entity that applies for a license, must designate 1 of its officers, partners, members or its managing agent as a qualifying officer. A qualifying officer is responsible for exercising the supervision or control of the building or construction operations and must maintain a license as an Individual Residential Builder or Maintenance & Alteration Contractor, as applicable.

You will note that the qualifying officer needs to supervise and/or control the operations, which you are not. I would talk to a construction lawyer if I were you.

It is NOT at all common in Michigan to rent out your Builder's License, so there is no market. I don't know of a single builder or sub renting their license from or to another company or individual. I can't imagine a legitimate contractor doing $8M in sales who can't afford one licensed employee. The license is not difficult to get, knowledge-wise, but there are background checks.
 
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