Expectations (construction) lol

[hallett21]

In typical Monday fashion nothing went as planned lol.

Just curious what the residential and commercial construction guys expect from people who give a 30-50k bid in CA.

My expectation of a sub has always been that they typically show up to work on let’s say Monday and they give me a starting invoice Friday (or hand me the invoice on Monday to be paid Friday). Now I try to forecast that to be 30%ish. Obviously it’s trade and project dependent.

So my expectation would be that I receive another invoice upon 50-60% completion. Not forecasted, meaning invoice in my hand 50-60% done. A lot of subs just give me an invoice at the end for 100% (30-50k project value).

So today I had the pleasure of walking the job with a client that a sub invoiced 50% last Monday. Well we’re at 50% today.

Client’s pissed and IMO rightfully so. Sub sees no issue since we are at 50% today. Im doing my best to keep cool and explain client optics. I need my money today or I’m walking attitude going on.

I’ve always expected subs to be able to float their payroll for 2 weeks. This guy wants it every Friday.

If I’m a dick just say so lol.

 

[FROGMAN524]

In typical Monday fashion nothing went as planned lol.

Just curious what the residential and commercial construction guys expect from people who give a 30-50k bid in CA.

My expectation of a sub has always been that they typically show up to work on let’s say Monday and they give me a starting invoice Friday (or hand me the invoice on Monday to be paid Friday). Now I try to forecast that to be 30%ish. Obviously it’s trade and project dependent.

So my expectation would be that I receive another invoice upon 50-60% completion. Not forecasted, meaning invoice in my hand 50-60% done. A lot of subs just give me an invoice at the end for 100% (30-50k project value).

So today I had the pleasure of walking the job with a client that a sub invoiced 50% last Monday. Well we’re at 50% today.

Client’s pissed and IMO rightfully so. Sub sees no issue since we are at 50% today. Im doing my best to keep cool and explain client optics. I need my money today or I’m walking attitude going on.

I’ve always expected subs to be able to float their payroll for 2 weeks. This guy wants it every Friday.

If I’m a dick just say so lol.

Net 30 and progress billing is a thing of the past. Deal with it everyday. The little guys need their money before they start.

 

[Bpracing1127]

I’d be pissed if I hired a sub who didn’t have operating cash

 

[ltbaney1]

3-4 years ago i had my interior painted, all the cabinets and trim to be sprayed and walls and ceiling rolled. house was empty (just bought it and redid a bunch of stuff) Day one he hands me a invoice for materials only. I asked about when he wanted the balance, he said when im done and you are happy. 11 days later i paid the balance. I thought for sure he would want a progress payment, as it was just him and a helper.

 

[Albert]

My sub use to work for me I helped him get his lic in my exact field. He now is a sub for me does excellent work and has managed to float his money correctly

 

[monkeyswrench]

On residential roofs, really no matter the size, I floated everything until completion. Never had a problem getting paid though...that would have made the next job harder, and the next after that. At any given time, I could handle payroll for a couple weeks, but materials could have beat me up real bad.

 

[paradise]

We have plenty of operating capital but with shady contractors and homeowners I like to get 50% for material at the start when we haven’t worked with them before. Pretty standard in our industry.

 

[Mandelon]

Lots of homeowners and companies drag out payment.

On one hand I think: Please don't finance your project on the small subs backs.

Other hand says: They should be able to wait a couple weeks at least.

 

[Fabhouse]

As a sub contractor (C15)
New customer/contractor- 10% deposit, that is what the state allows. I may ask for material cost up front, most don't know the rules.
Existing customer/contractor- either pay when complete or net 30
National accounts/Big Box stores- most offer to pay net 10 with 2% discount
Public works- 60 days on the good ones, 90-120 with 5% retention on the others
(commercial work)

 

[WTR&PWR]

We have plenty of operating capital but with shady contractors and homeowners I like to get 50% for material at the start when we haven’t worked with them before. Pretty standard in our industry.

What industry?

 

[Joker]

I never ask for a deposit nor do I ever get paid before 30 days. I can’t stand subs who want their money within a week.

 

[hallett21]

We have plenty of operating capital but with shady contractors and homeowners I like to get 50% for material at the start when we haven’t worked with them before. Pretty standard in our industry.

And I’ve always been willing to pay (bill a client ahead) for material in full if you can show me a PO, items and the clients address.

 

[lbhsbz]

In typical Monday fashion nothing went as planned lol.

Just curious what the residential and commercial construction guys expect from people who give a 30-50k bid in CA.

My expectation of a sub has always been that they typically show up to work on let’s say Monday and they give me a starting invoice Friday (or hand me the invoice on Monday to be paid Friday). Now I try to forecast that to be 30%ish. Obviously it’s trade and project dependent.

So my expectation would be that I receive another invoice upon 50-60% completion. Not forecasted, meaning invoice in my hand 50-60% done. A lot of subs just give me an invoice at the end for 100% (30-50k project value).

So today I had the pleasure of walking the job with a client that a sub invoiced 50% last Monday. Well we’re at 50% today.

Client’s pissed and IMO rightfully so. Sub sees no issue since we are at 50% today. Im doing my best to keep cool and explain client optics. I need my money today or I’m walking attitude going on.

I’ve always expected subs to be able to float their payroll for 2 weeks. This guy wants it every Friday.

If I’m a dick just say so lol.

The only time I asked for money up front was when I was living in my truck and needed to buy a finish nailer and a compressor to the do the job....and I only asked for enough to buy those and the GC would provide the materials. All other payment was expected within 2 weeks of completion. This was 20 years ago....If I was in the same situation today, I'd humbly ask for the same terms.

All these premadonas can get fukt. Fire him and hire someone with the capacity to run a business unless you really like the guy or his wife is hot or something

In the auto parts industry...I'm lucky to get paid 60-90 days after I've delivered the product, that I've already paid for before it hit my shelf.

 

[hallett21]

The only time I asked for money up front was when I was living in my truck and needed to buy a finish nailer and a compressor to the do the job....and I only asked for enough to buy those and the GC would provide the materials. All other payment was expected within 2 weeks of completion. This was 20 years ago....If I was in the same situation today, I'd humbly ask for the same terms.

All these premadonas can get fukt. Fire him and hire someone with the capacity to run a business unless you really like the guy or his wife is hot or something

He’s done good work for me and a few other contractors for 7ish years. My guess is that he’s trying to finance something else through my project.

The only reason I’m even putting up with it in the slightest is that the client is one I want taken care of. I just don’t want to delay the project. Even if it’s at the cost of my sanity.

 

[lbhsbz]

He’s done good work for me and a few other contractors for 7ish years. My guess is that he’s trying to finance something else through my project.

The only reason I’m even putting up with it in the slightest is that the client is one I want taken care of. I just don’t want to delay the project. Even if it’s at the cost of my sanity.

Sound like boat builder in the late 70’s or ‘80….slide him an 8 ball and see if that calms him down…maybe wave a tomato can of resin under his nose…

 

[81eliminator]

As a sub contractor (C15)
New customer/contractor- 10% deposit, that is what the state allows. I may ask for material cost up front, most don't know the rules.
Existing customer/contractor- either pay when complete or net 30
National accounts/Big Box stores- most offer to pay net 10 with 2% discount
Public works- 60 days on the good ones, 90-120 with 5% retention on the others
(commercial work)

I thought the law in CA was 10% or $1000.00 whichever is less.?

 

[28Eliminator]

I haven’t been involved in the remodel world for 20 years… But, anything more than a 10% deposit should be avoided. If they don’t have operating capital and accounts to buy materials I would be very Leary.

Draws should never set up based on a percentage of work completed. Percentage is perceived and can be construed multiple ways. Draws should always be based on a specific task or point of work being completed. 10% for a retention should always be held for an agreed upon timeframe.

And always get a signed lien release upon payment.

 

[Fabhouse]

I thought the law in CA was 10% or $1000.00 whichever is less.?

You are correct...forgot that part.

 

[Wedgy]

I thought the law in CA was 10% or $1000.00 whichever is less.?

That is correct

 

[River Runnin]

First mistake!! —— Kommiefornia!!

 

[Happy Smitty]

Residential is different than commercial. I see how payment milestones would work better than percentage complete, when the homeowner doesn't reasonably agree to a percentage complete.

In commercial it's AIA monthly progress complete and stored materials billings, net 30. Sometimes the small subs need money up front so I'll purchase the materials.

Progress complete is typically billed in advance due to the time it takes to process the billing. For instance billings submitted on the 20th for work completed through the end of the month.

At the end of the month the bank monitor or owner inspects the site and certifies the pay app.

 

[Mikes56]

As the homeowner, I got fucked building my garage addition by fronting too much money.

The builder wanted $5000 up front to start. I had no problem with that. Three weeks later he wanted another $7000, I was okay with that also. I was paying for the material out of my pocket and picking it up at Home Depot for the builder.

Then I started seeing forms and rebar that didn’t look right. I don’t know what I’m looking at, but I knew this wasn’t right. A construction buddy came over and said it was all wrong and the rebar was one size too small, #3 instead of #4 like the plans said it should be. I also failed the first inspection. At this point I fired the complete retard and had to hire a new GC.

I’ll never front that kind of money again. I’d be glad to pay weekly when I see the work being done.

 

[JUSTWANNARACE]

First things first..

What does the contract state?

 

[500bbc]

I thought the law in CA was 10% or $1000.00 whichever is less.?

On home improvement, prime contractor to owner only. Contracts with subs are a commercial contract.

 

[paradise]

What industry?

AV (Audio Video), for whatever reason it’s the industry standard.

Haven’t ever had an issue, commercial or residential

 

[traquer]

In my world I float everything and get paid 30-90 days later, but thankfully I only have to pay labor. "Materials" software or hardware wouldn't work out at all.

 

[500bbc]

FYI
If not prime ALWAYS prelim. Doesn't matter how well you know or trust prime you can get fucked.
Had a development group try to guck us for almost $200,000.00 on a project.
They had to pay us to get takeout, prime under the developer was in tears when he handed me a check. Bankrupted him.

 

[endobear]

Been a painting contractor for 25 years.
Never asked for a dime up front. Pretty sure it's one of things that keeps me busy. My contracts do state that payments are to be made every 2 weeks. I never ask for it unless the client is squirrely. Which has only happened a handful of times.
I put in draws every 30 days with one of my big custom home builders. Some bills exceed $60k. Those take another 30-45 days to get paid on.

 

[OCMerrill]

He’s done good work for me and a few other contractors for 7ish years. My guess is that he’s trying to finance something else through my project.

The only reason I’m even putting up with it in the slightest is that the client is one I want taken care of. I just don’t want to delay the project. Even if it’s at the cost of my sanity.

Or....Someone else is holding out on him? He sees you as his path to keep going.

In order to keep my people in the last 6 months I've had to increase my payroll more than I would have liked to. Employees have the same problems as everyone else from rising gas prices to rising rents. I just went to Costco today and my cart was semi full...$600 and the only meet was frozen chicken breasts and salmon.

I'm a GC that does Maintenance repairs for HOA's so I also have to be the dude that cries for money from time to time which I seriously hate. I only offer 15 day terms. However, they pay when the F'n feel like it most the time.

When my kids are done with college we will sell and likely move to Havasu and I'll do Handyman work myself. No Employees.

Allot of my work is yearly contracted hourly rates. See the issue and I NEVER cheat the hours, before and after time stamp pictures, all that stuff.

 

[Shlbyntro]

completely different world.

But my rule is:

-$200 up front before ill schedule a checkout (will credit forward towards repair or will also waive this charge for established customers)
-Followed by a 50% deposit to order parts and schedule work once diagnosed. Most times when jobs grow during the course of the work, I wont ask for addition deposits but will ask the customer to acknowledge/approve the added cost via text or email.
--Final payment due upon completion. I'll allow 2 weeks for payment once notified of completion unless other arrangements have been made prior (like if customer is out of the country or something)

75% of my work is mobile at the marinas and it's not like I can hold the boat for payment.

I've never had a customer complain. Some even pay the entire invoice up front.

thats my world though

 

[Bobby V]

Residential is different than commercial. I see how payment milestones would work better than percentage complete, when the homeowner doesn't reasonably agree to a percentage complete.

In commercial it's AIA monthly progress complete and stored materials billings, net 30. Sometimes the small subs need money up front so I'll purchase the materials.

Progress complete is typically billed in advance due to the time it takes to process the billing. For instance billings submitted on the 20th for work completed through the end of the month.

At the end of the month the bank monitor or owner inspects the site and certifies the pay app.

Yep. When I would get a good size commercial project one of the 1st things they ask for is the AIA and Schedules of Values (SOV) to get the billing approved Before we started work.

 

[rmarion]

our invoices on new commercial construction was always billed by the 20th, with forecasted by end of the month.

GC normally paid 15th of the following month. They could kick it back if we over billed..

communication was KEY..

billings required approval of the field Superintendent. I always had that conversation before billing.

again communication.

 

[DLC]

In typical Monday fashion nothing went as planned lol.

Just curious what the residential and commercial construction guys expect from people who give a 30-50k bid in CA.

My expectation of a sub has always been that they typically show up to work on let’s say Monday and they give me a starting invoice Friday (or hand me the invoice on Monday to be paid Friday). Now I try to forecast that to be 30%ish. Obviously it’s trade and project dependent.

So my expectation would be that I receive another invoice upon 50-60% completion. Not forecasted, meaning invoice in my hand 50-60% done. A lot of subs just give me an invoice at the end for 100% (30-50k project value).

So today I had the pleasure of walking the job with a client that a sub invoiced 50% last Monday. Well we’re at 50% today.

Client’s pissed and IMO rightfully so. Sub sees no issue since we are at 50% today. Im doing my best to keep cool and explain client optics. I need my money today or I’m walking attitude going on.

I’ve always expected subs to be able to float their payroll for 2 weeks. This guy wants it every Friday.

If I’m a dick just say so lol.

Meet your sub for lunch or a coffee / Beer whatever … off Site and talk to him to see what’s Up with his Billing…
He might not be a good sub for your program.

maybe he has leveraged to much or in the process of Getting Screwed by someone else…. Things Happen.

as a little guy GC Commercial Contractor, I know what’s going on before I start a Job, & so do my subs - We are a Team! I don’t want anything unusual hitting my customer or my relationships - communication is key.

after saying That -

If I have a new sub, I tell Them when I will pay them w/ a progress payment prior to accepting their contract - So I can Schedule Things accordingly

 

[n2otoofast4u]

LOL…….

60-90 on multi millions seems to be the norm in my world. Unless it’s a new GC, a known risky project, or something is going on alarming we just keep on keeping on. Lien rights are your friend, and good relationships are better. I’ll pull crews at 90 if their communication is dark or spooky.

 

[Fastdadtsmith]

When my kids are done with college we will sell and likely move to Havasu and I'll do Handyman work myself.

Do you have a timeline on this phase yet?

 

[Melloyellovector]

Unless agreed upon before work started, weekly draws for a sub isn’t a sub that’s an over paid employee. Lol

 

[zhandfull]

Nothing like paying a sub 50% on first week for materials. Then getting a prelim notice from the supplier because they bought on credit.

Not sure as a contractor how you could protect yourself and client paying subs up front. Need to have unconditional material releases or pay for material directly.

 

[CarolynandBob]

When we did a sub-contract job we would ask for a material draw when we bought the material. Submit bill by the 25th and got payment the next month on the 1st, so we floated about 1-1/2 months. Had an agreed to statement of values ( i think that is what we called it. Memory not fuzzy on it). When we would submit our billing we would include the SOV show what was completed.

When we were the general we received billing for the sub on the 26th and paid next month on the 15th. I or my super would always went to jobs site to compare their billing to actual work.

On edit. Sorry I didn't proof read this. Terrible

 

[Boat 405]

In typical Monday fashion nothing went as planned lol.

Just curious what the residential and commercial construction guys expect from people who give a 30-50k bid in CA.

My expectation of a sub has always been that they typically show up to work on let’s say Monday and they give me a starting invoice Friday (or hand me the invoice on Monday to be paid Friday). Now I try to forecast that to be 30%ish. Obviously it’s trade and project dependent.

So my expectation would be that I receive another invoice upon 50-60% completion. Not forecasted, meaning invoice in my hand 50-60% done. A lot of subs just give me an invoice at the end for 100% (30-50k project value).

So today I had the pleasure of walking the job with a client that a sub invoiced 50% last Monday. Well we’re at 50% today.

Client’s pissed and IMO rightfully so. Sub sees no issue since we are at 50% today. Im doing my best to keep cool and explain client optics. I need my money today or I’m walking attitude going on.

I’ve always expected subs to be able to float their payroll for 2 weeks. This guy wants it every Friday.

If I’m a dick just say so lol.

Most of my jobs are 45-60 days from when i send in a bill until i get paid. Seems normal unfortunately. I usually send in a bill and plan to do the work accordingly so i get paid about the time that work is complete. Never will i bill a 45-60 day out job after the work is done. Im not a bank for 2 months.

 

[COCA COLA COWBOY]

I'm seeing things tightening with a lot of people. That sub is probably just stretched a bit thin. We are almost at a stagnant part of the economy as the flood of money has stopped which has slowed spending and the prices of goods and services is at highs. I think we are teetering on the part of the recession where consumers start to really feel it.

Contractors had tough times in 2009-2013. I don't think this one will be nearly as bad or last half as long, but I would tighten the belt if I was you.

 

[hman442]

My buddy is in the middle of a complete bathroom redo on a very small bathroom. The "good ol boy" contractor that he chose wanted 50% up front to order materials. The "slickster" outfit that had the shiny sales guy (his words), wanted 90% up front.

 

[Bpracing1127]

I have 4 vendors I moved to net 180 or 2% net 30 lol.

 

[Done-it-again]

I have 4 vendors I moved to net 180 or 2% net 30 lol.

looks like your price just went up 2%. Lol

 

[JL95]

You'd be surprised. We can get material draws for entire neighborhoods in some cases. Helps both parties reach the finish line.

 

[Havasu blue label]

It’s called floating money it makes us guys look bad

 

[J DUNN]

I'm seeing things tightening with a lot of people. That sub is probably just stretched a bit thin. We are almost at a stagnant part of the economy as the flood of money has stopped which has slowed spending and the prices of goods and services is at highs. I think we are teetering on the part of the recession where consumers start to really feel it.

Contractors had tough times in 2009-2013. I don't think this one will be nearly as bad or last half as long, but I would tighten the belt if I was you.

I'm no analyst but this is exactly what I've been thinking. We are a millwork sub in commercial office and everyday I get asked how work is going and if we're busy. I tell the truth that we have been slammed for the past year and set company records for gross revenue but right now we're slowing down quickly. That always leads to them asking why, like I have some finger on the pulse of the american economy. My best guess aligns with what you're saying, companies have spent all the PPP money, they've spent all the ERC money so they can avoid the huge tax hits that come from those and now every company is out of money (or holding on to it) and everything costs way more than it did 2 years ago. All of that causes the stagnant state, I agree.

 

[rrrr]

My buddy is in the middle of a complete bathroom redo on a very small bathroom. The "good ol boy" contractor that he chose wanted 50% up front to order materials. The "slickster" outfit that had the shiny sales guy (his words), wanted 90% up front. View attachment 1251301

Did anyone else notice the 9X9 floor tile? There's a 99.9% probability the tile and adhesive contain asbestos.

 

[DC-88]

Nothing like paying a sub 50% on first week for materials. Then getting a prelim notice from the supplier because they bought on credit.

Not sure as a contractor how you could protect yourself and client paying subs up front. Need to have unconditional material releases or pay for material directly.

I issue joint checks with supplier for draw #1 in some cases with certain subs like the main drywall contractor we use the most. It is a balancing act for sure, but my sub list is recurring for so many years I just deal with each one as needed. Some will perform better because I will leave them a check under my door mat the day they need it with the understanding they lose the zeroes and get with the hero type of performance on my stuff. Others will forget to bill until 60 days after a spec house closes escrow or notice of completion was filed on a custom . 99% of the time I catch this, but have definitely gotten an 8500 bill for a nice garage roll up door, or final 50% on a full set of copper rain gutters months after the books are closed on a job.

 

[NicPaus]

My buddy is in the middle of a complete bathroom redo on a very small bathroom. The "good ol boy" contractor that he chose wanted 50% up front to order materials. The "slickster" outfit that had the shiny sales guy (his words), wanted 90% up front. View attachment 1251301

In CA we can only get $1000 up front or 10% if job is under 10k.

How much is he paying for the bathroom? And where at?

 

[HBCraig]

I dint deal with projects very often so I can't speak to the processes
But, do you all think the problems stem from everyone being so damn busy because there's so much work out there?