I get deposits from all my HOs, but have not when I sub for builders (as a trim carp)…
I am submitting a bid tomorrow for a much larger trim project than I usually do. So, if something is going to eat a month of your schedule–do you get a deposit (even from a builder)? Or progess payments (every week or two or after certain phases)?
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Unless you know the guy, have worked for him, and absolutely trust him, then I would go for progress payments, at the very least. A deposit is appropriate because if you commit to a month's work, turn down other jobs, and then he bails on you, you're screwed.
Now, none of this means that builders typically give deposits. It sounds like a lot of them don't. I would, if we were signing a contract that I felt warranted it, and I know that when I was a cabinetmaker I routinely got 5-figure deposits to get work started.
I think it's appropriat to get progress payments on larger jobs. I try to collect from my regular builders only when I'm done the whole trim out as a rule. However, if it's a new builder or a huge job I put in some draws. Trim is too close to the end of the house so you can't count on a lein if there are payment issues when you're finished. Just don't try to get too much too fast and most builders will be fair and understanding.
As long as you coordinate it ahead of time, yes. I mean by that, give them time to get it set up, but understand that theres a draw schedule and the bank will probably not approve draws for work that isnt done. Thats the banks rules, not the GC.
What I have been able to do, lets say its "in by the 1st and paid on the 15th", and you start on the 28th. I'll show up with an invoice which bills an amount I reasonably expect to have completed by the 15th, and they submit it for the draw. By the time it gets paid, that much work is done. If its a large job and you're on site for months, you have to do something like that or you have no cash flow for 90 days. Not a winner.
"Sometimes when I consider what tremendous consequences come from little things, I am tempted to think -- there are no little things" - Bruce Barton
Never a deposit, but progress payments are fairly common on big(longer than 2 week) jobs.
Don't call me daughter.
On frames for builders that run longer than a week I do progress payments. I'm never in a position to get smoked for more than a week's work or so (anymore) and the builder can't really complain because the payments are for work completed. Keeps cash flow where it's supposed to be for payroll too.... a cash crunch can be a killer even when you're "making" good money.
Thanks Diesel, and ALL,This one will involve scaffolding in the great room (tall palladian windows to trim), unique stair railing, built-in units flanking a 2-story stone fireplace, 20' columns etc.It will be a much larger job than usual for me...and I'd prefer to not wait too long for a check.All y'all are pushin' the progress payment thing. Sounds Good. So Maybe...Hang doors & trim doors & windows & base...get a check.Install railing & cabinets...get a check.Install columns, built-ins, closet shelving...get a check.
Your way of thinking, progress payments, as just stated in your last post is the way it works here in new construction. That's assuming you are not supplying the material, which, in new construction doesn't happen with trim or most other stuff.
Are you supplying the material?
Turnkey services can be contracted for at a premium; sometimes it is worth it, but deposits still don't happen, I guess part of the reason being that, generally a turn key contractor is going to be a bit more established, and knows who he is dealing with, although on such a job the first progress payment might be billed for the day the materials are delivered, and a full day's work is performed.
As an aside, one of the benefits to a builder who contracts for turn-key services is that the sub is responsible for the materials until they are installed. Also, material waste is the sub's responsibility.
The difference when you work for a HO is that YOU are supplying the material, and at best you might know his last 2 or 3 checks cleared. HO's don't care as much about liens, as they are most often not planning on moving anytime soon - unless it's a presale fix-up. Builder's care about liens because they are 99% of the time planning on selling the property ASAP.
I guess the other part of the deal - maybe even the bottom line - is when working for a builder there is almost a guarantee of repeat business. Also, when dealing with a builder - and I'm gonna possibly take some flack for this one - there is much less chance that your job will be held up with some crazy stuff like odd differences in customer perceptions about the way things should be done, "you can't work today because I'm having the ladies for bridge", or because the family dog chewed up your air hoses :-) Most all the subs I use won't work for HOs - it's just not their 'niche".
Edited 8/31/2006 7:48 am ET by Matt
If you're planning the work, put some kind of milestone payments in your bid. If the GC is planning the work, lay out your progress (or milestone) payment schedule based on his work plan.