I am a licensed general contractor who does a lot of small remodels, small handyman-type jobs, and a fair amount of finish carpentry. I generally work alone. I recently bid to install doors, trim, and cabinets in a condo-conversion project. I did several units, and all was going well, until I had a disagreement with the general contractor on the project. He owed me about 10k at that point, and just wouldn’t pay it. He took off to Mexico for awhile, then wouldn’t return my calls when he got back.
Fortunately, after several months of this, I collected from the owners (a couple of young investors from out of town). I told them I wouldn’t work for their general contractor any more, but they liked my work and decided to hire me direct. They were friendly, spoke highly of my work, and paid right away. So all the other subs worked for the general, and I worked for the owners direct. Everything was going fine…for awhile.
Then the owners told me that as the project was nearing completion (about 10 more units to complete), they needed to get more organized and more streamlined, or something to that effect, so they were putting everything in the control of the general contractor. I said OK….but I gotta go. No way was I going to work for someone who would mess with my money that way. They said they were sorry to see me go, but felt they had to do what they had to do.
It hurt me pretty bad financially, as I had nothing else lined up, and 10 units of trim doors and cabinets would have taken me through the holiday season. So I went through a dry spell for awhile, not completely broke yet, but getting too close for comfort. Picked up some little handyman jobs here and there.
Then yesterday one of the owners/investors in the condo-conversion project called me. He said they fired the general contractor – seems he took off to Mexico for a month and a half, right as they were in crunch-time on a couple of units that had sold and needed to be completed by a move-in date. Probably more to the story, but thats what he told me. He asked me if I could help them out – not only with the finish work, but also with completing the entire project.
So I went by the sales office, and talked with the sales girl. She said they have nobody there doing any work, and they need subs NOW. She showed me two units supposed to be ready in 3 weeks, and no way – no cabinets, no doors, no trim, no tub, no floor coverings, holes in walls all over the place. I’m not bragging, but other than the work I did, all the work I saw was pretty crappy. The painter made the cabinets I installed look like CRAP – worst stain/varnish job I think I’ve ever seen.
So I would be happy to help them out, and can definitely use the work. They have plans of doing more of these, after this one is completed, and I’d love to do one from the get-go, next time. But I work alone, as I said. I have no crew, and no office staff.
Is there any way I can make this work out to my advantage, as well as theirs? Anyone else been in a similar situation, or have any sage advice?
edited to add: I have a lot of experience and a successful track record running jobs like this, but for other contractors I have worked for. I haven’t done anything like this under my license before.
“Down these mean streets a man must go who is not himself mean, who is neither tarnished nor afraid…He must be, to use a rather weathered phrase, a man of honor, by instinct, by inevitability, without thought of it, and certainly without saying it.“ – Raymond Chandler
Edited 12/19/2006 9:02 pm ET by Gumshoe
Replies
if you can pull this together your business should launch to new levels.
a customer who requests help is a customer who has needs...you can fulfill those needs. if you do not someone else will. this is your chance to be the hero. don't expect it to be easy and make sure they know it will be difficult.
this is an incredible opportunity to pass up.
Assuming you have subs that you can work with available, and your statement that you have organized similar jobs before - go for it.
Probably your biggest concern will be cash flow - or is it possible to run the job for them and have the subs bill direct to the customer?
And don't kid yourself about what parts of the finish work you will be able to do yourself. You'll have your hands full just keeping everything going at this late stage of the progect. Just hang up your pouches for a while and be a GC.
Terry
Terry,Rather than be the GC, put a proposal together to act as a Project Manager. The owner would be responsible to pay all of the trades. Do not try to be a PM at risk.Chuck SEdit: This should have gone to gumshoelive, work, build, ...better with wood
Edited 12/20/2006 8:37 am ET by stevent1
Quote a fair price ... fair to you for all the physical work and managing work involved ... and fair to them ... but more fair to you. Get everything in writing, including payment schedule. Then get to work and don't look back. And don't bad mouth the former gc. Act profressionally.
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
Great advice by all. Don't let them take advantage of you.
Your tag line says it all. Go for it!
"Down these mean streets a man must go who is not himself mean, who is neither tarnished nor afraid...He must be, to use a rather weathered phrase, a man of honor, by instinct, by inevitability, without thought of it, and certainly without saying it." - Raymond Chandler
Seams to me that they liked your work and your reliability. I would take it on more as a PM roll as others have mentioned without the finical risk. It seams as you found out they are willing to pay to have work completed (but this could be different now the project is close to closing and who knows what the other GC situation was with them).
Make sure you have the rolls and responsibilities in writing especially pertaining to work the past GC has done and may be outstanding $$$ that may be owed to subs or suppliers. If you do this and protect your self but are able to step up to the plate and pull this through it could be a great reference and future relationship built.
I have friends and relatives who are real estate investors. From my experience these people are the hardest to work for because they are so CHEAP.The way to be successful with them is to cut the corners like they want, use cheap materials, use the cheapest kitchen faucets, put the cheapest shingles on the roof, etc. etc.Have you had the same experiences?^^^^^^
S N A F U (Situation Normal: All Fouled Up)
"No one on the job working, we need subs"...would get my questioning nature in high gear. I'd ask for names and numbers of the past subs and make some phone calls before putting any time on this one. Find out why no one's working??? To have a good sized job devoid of workers is a shrinking building environment just doesn't pass the smell test.
Acting as a PM may not make you financially responsible but as you stated funds are dwindling... working for free or chasing your money is no fun.
You sound like an upright guy who has been around the block, at least a few times.
What does that little "inner voice" in your head tell you about these investor guys?
I would not be bothered if these guys were trying to the job on the "cheap" -- as long as minimal standards were upheld and the guys were "honorable" (meaning they are willing to pay for the work, and have the funds to do so).
If they pass your personal smell test, I would still keep them on a short leash -- they pay the subs, you get paid weekly. And make sure you have a mutually agreed upon schedule and budget set up to complete the job.
I hope you'll come back and tell us what you decided.
********************************************************
"It is what we learn after we think we know it all, that counts."
John Wooden 1910-
OK, met with one of the owners today. As far as why there is no one there - they fired the general contractor. Hence, no sub's. They are not interested in retaining any of his sub's, because the majority of the work was substandard. The owners are stand-up guys, but looking for the "good" price nonetheless.
They learned a valuable lesson about picking the lowball bidder, but lowball or not, the fact he screwed the job up with substandard work is not helping their financial picture. So I have to keep costs down as much as possible, and just get the mess straightened out. There are really only 4 units that I have to finish that are pretty bad - the rest have been demo'd, but not much else done, so I have more of a clean slate to start with on those.
The 4 I have to finish right away have some pretty substandard work, but we discussed it and they agreed I would not be held responsible for that work. If it generates a change order from the buyer, that will be handled as a separately billed issue. Their basic stance is: This work is not acceptable, but we will live with it, until a buyer tells us otherwise. So let it ride, and just proceed from here. Of course, some of the substandard work HAS to be re-done, like the electrical outlets that don't work, for example.
They said they prefer a similar arrangement to the one they had with the original contractor - they paid the invoices, and he received a 10% mark-up for supervision. That seems OK with me, but I'm going to need some laborers to help out, and I haven't figured out how to handle that. The owner said they'd gladly put a helper on their payroll, but I don't like that - if I'm in charge of the job, I want any laborers to be working for me.
Problem is, my temp agency will charge double what I pay a laborer (for insurance and paperwork), then I have to mark it up some, to be worth it for me. So it will probably be more than they'd like. The ex-contractor charged them 800/wk for a full-time superintendent on site, but the "superintendent" was a kid with no construction experience, and probably getting paid cash under the table, like most of his workforce. I think he was made supervisor because he was the only one who could speak english too.
So they want to get going like now, but I'm gonna try to meet with my accountant first, to see if he thinks this is a good idea. I talked to him on the phone today, and he said he can manage the accounting for the job if needed.
I met with an electrician on the job, and he didn't want to bid it - understandably, as there are too many unknowns, coming in the middle of someone else's job like this.
I'm thinking 10% markup is kinda low, but hate to tell them so - wonder what others think.
------------ edited to add: Sorry, I forgot to say THANK YOU to all of you nice enough to read and respond. Don't know what I'd do without BT, its been a vital resource for me, since reviving my (once dormant) contracting business awhile back!
"Down these mean streets a man must go who is not himself mean, who is neither tarnished nor afraid...He must be, to use a rather weathered phrase, a man of honor, by instinct, by inevitability, without thought of it, and certainly without saying it." - Raymond Chandler
Edited 12/20/2006 10:15 pm ET by Gumshoe
Gumshoe,
I have had experience being a commercial Project Super. I run the site.
A Project Manager lines up subs, handles the billing, invoicing, bids etc.
What I have done is this.
Become the Owners employee. (You can do this and keep your license)
Get on a salary with the owners, every two weeks I get paid. (My owners have preferred salary because they didn't want to pay me all the overtime I wrack up on an hourly basis, I simply adjust my salary needs to cover that .)
Truck , fuel etc. paid for.
Misc. small tools needed for the project they buy.
Owners pay all bills, they are totally responsible for the financial end.Invoices go directly to them , not you .
Have the owners hire the help , no risk and no paperwork for you . The owners make it clear to the help you are GOD. The help works directly under your supervision, even the owners have to tell you if they are going to be using the help in some other way. Much less risk for you this way .
I am responsible for co-ordination of subs, sometimes locating subs, checking work to see it meets specs. Reviewing billings to see that the subs are not trying to pull a fast one. Working with inspectors and arch./ eng. is my job.
Basically I try to limit my risk to what I know and do best .. build buildings. Might try to find this book:
Superintending for Construction, by Paul J. Cook
It is a good primer. One Other note, if you do contract this work don't foregt to add in a good sized chunk of money to cover the increased cost of your liability insurance. All Insurance companies set rates based on the $ volume of work you do. If you run this job thru your books your going to see a large jump in your premiums after the next audit. Better yet, talk to your agent and tell them what you are doing in advance.Edited 12/20/2006 10:59 pm ET by dovetail97128
Edited 12/20/2006 11:23 pm ET by dovetail97128
You have yourself an interesting situation. You may want to consider seperating the incomplete work from the yet to be started. Manage them as 2 different projects. No need to blur the issue of bad work and your own. I would also highly recommend a involved survey of current state of affairs. It would be of noticable importance to catalogue everything wrong in the partially completed work. Again, keep this seperate from your fresh start units.
I get 2 or 3 of theese rescue missions a year. I have 2 going right now as well as my regular stuff. I charge a non refundable set up fee up front (no less than $1500.00) and $65.00 / hr for time spent on their project. Normally the permit is mine. They pay for ALL the expenses, materials, subs, permits, etc. Billing is weekly ( more or less) If they are not paying me or the other bills I will & have shut them down untill they get things in order. Jobs like this can be very lucrative but you need to watch yourself and document document document. Don't leave an oppertunity for something you missed to come back and bite you.
i have a question about your post, please educate me.
you said normally the permit is yours, again please take into consideration i are a construction worker, (quite the whiz at work if i do sayso meself) not a business pro, when i made a statement in earlier post, it was as i understand it.
1. if the permit is yours is not also the legally binding 10 year construction warranty also yours? (thats how it is in kalifornia, 10 years! other states as well so i've heard)
2. even if your not the "licensed contractor" of record for the whole job how do you absolve yourself of the liabilities of construction that happened before you got there? i understand document document document, and i would photo x 3 as well but still i am nervous about that.
3. how are you going to deal with investors whose only concern is getting the job done as cheaply as possible? with limited knowledge of construction practices, just looking at the numbers, the investors will be aghast at what it actually costs to employ "real" craftsmen in california to complete this job, maybe three times the cost of the illegal's they were previously employing, and at a time when the market is slowing down. i would also be nervous about that if i were to take this job.
now i will admit here that i am assuming a few things based on the previous posts, and i may be wrong but i know the area, and when i hear about hiding out in mexico, and a group of "investors" trying to "develop" a property with several units,
what i hear you saying is,
you have people funding this development that are looking at it as a one time show, even if they "do it" again it will be treated as a seperate business venture. while they may be very sophisticated investors, building is not their particular area of expertise. they are trying to get the work done for the absolute lowest price which means in cali using illegals, and setting up insulating layers of corporations so they won't be left holding the bag. somebody will get quite a bit of money to pay cash to and the taxes for an illegal work force. if that person does not also insulate themselves very well, that person could be liable for shoddy work, you will also pay a lot of taxes and workers comp but it will be worth it cause you will make a fortune. this should be illegal, and they may be something on the books, but it is never enforced, it is just your ethics at this point.
i know labor contractors that are very wealthy in california, their business consists of providing temporary workers to the growers for harvest and maintenance. there is something that bothers me about the fact that these "labor contractors" who are second or third generation immigrants are wealthier than all but the very largest growers (those that own quite a bit of land), not to mention the poor people in the fields that actually do the work (the salt of the earth all of them), all for the ability to pull a trailer loaded with porta potties and speak two languages like a native. i guess its just the american way, rich dad would be proud!
I have two concerns, if i were to take the job, and i would communicate it in writing to investors and request written response (document). that i would not be liable for any of the work, since so much of it was done before i got there, and that all remaining work be done by legal residents at above average wages. this and an attentive superintendent ensures the rest of the job completed with quality work. not as much profit, but at least its done right!
1. if the permit is yours is not also the legally binding 10 year construction warranty also yours? (thats how it is in kalifornia, 10 years! other states as well so i've heard
I'm in Ohio. I'm only responsible for the work performed under my watch. think of it as a remodeling project, you aren't responsible for the work already performed (still check with an attorney).
2. even if your not the "licensed contractor" of record for the whole job how do you absolve yourself of the liabilities of construction that happened before you got there? i understand document document document, and i would photo x 3 as well but still i am nervous about that
You might want to have your attorney draw up an agreement stating you bear no responsibility for work performed to X date and document it with written notes & photos
. how are you going to deal with investors whose only concern is getting the job done as cheaply as possible? with limited knowledge of construction practices, just looking at the numbers, the investors will be aghast at what it actually costs to employ "real" craftsmen in california to complete this job, maybe three times the cost of the illegal's they were previously employing, and at a time when the market is slowing down. i would also be nervous about that if i were to take this job.
That's where the setup fee comes in. It is enough to cover attorney costs your time with the attorney & the time you need to establish an estimate of what needs done & what it SHOULD cost to finish. Remeber, this fee is a non refundable & make sure they know that & you have it in writing.
I the investors won't agree to those terms I walk away. One thing I haven't seen posted yet is trust your gut. It's ok to be nervous about taking on a job like this. BUt if you have a bad feeling about who you are about to do business with you need to think twice. I've let a number of what appeared to be lucrative jobs go by becuase it didn't feel right. In almost every case it turned out I was correct in letting it pass ( the ones I didin't pay attention to my instincts on were painful lessons).
I actually have a totally different suggestion (I don't think I saw this in the other replies):
Have you worked with any GC's you really like? If so, talk to them about the project and see if they want you to recommend them. This would keep you in your comfort zone, put an experienced pro in the right position, and nearly guarantee you future work from your referred friend.
http://jhausch.blogspot.comAdventures in Home BuildingAn online journal covering the preparation and construction of our new home.
Good Point,
I have actually done this and ended up with an 18 month contract that was very lucrative for me on the one job followed by yet more work from that contractor as well.
Good Supers are tough to find is what I learned (just ask all the contractors here about that ) and if you are good you will get paid very well for what you do.
i realized i forgot to elaborate on the "me too" issue. about 3 years ago i went to an interview at Ennis Homes office in Porterville Ca, about 60 miles norhteast of Bakersfield (Kern Co) for a position with them as a trim sub contractor.
They were advertising for subs in the paper so i went to see what the deal was, i knew they had tons of work. also at that time several other contractors were pumping out the tracts in that part of cali.
heres the deal: they give you a contract that is a short novel about what you will do, how you will do it, when you will do it, and what the rate is for the WORK, no problem there, actually good because they describe several shortcuts that would not be considered fine homebuilding that are NOT allowed. a detailed description of the work to be done and the schedule, very organized and professional.
there is just as much paper in the contract about liabilities and insurance, in fact Ennis even offers to provide subs with insurance with Ennis's carrier at a discount rate but only for Ennis work, you have to get seperate insurance (liability) for other contracts you may work under.
and then there are the clauses about what happens if materials are stolen or damaged by vandals, the way i understood it i could be liable for repairing a door i had already hung if a neighbor kid threw a rock at it, as well as being liable for a late charge if i didn't fix it yesterday
also big back charges if you are late with their schedule, of course no extra for you if their next job is not quite ready for you yet
then there was the "me too" clause. thats just what i call it, but the way i understand this is that if the door fails to operate properly after a few years (it lasts for 10 years!) because the foundation settled, not because of anything wrong with the way i set the door, my liability insurance would foot the bill along with every other contractor on site. The "me too" part is that all the subs insurance together will pay for any claims on Ennis Homes developments, and that while Ennis is the general or prime contractor, their responsibility is nill since they subcontract out all the work.
and there were at the time i went to this interview lawyers canvassing 9 year old developments in the same area putting lists of owner complaints together for a class action against several contractors, one of whom was going door to door begging homeowners to let him fix every little thing for free so his insurance wouldn't go up and he could stay in business.
all in all a great job by Ennis of insulating themselves from any responsibility by calling their workforce contractors, when really all they are is pieceworkers who pass the license test and pay the insurance, in fact they are not really even decently treated pieceworkers in that the schedule dictates exactly when and where you will be.
I don't know the specific name of this type of insurance and the business practice that employs it, but i did read how it is illegal in several states and that it was being debated in the kalifornia legislature, hopefully it is outlawed there now and someone who knows more about it than i will enlighten us. thanks for listening, chris
As it stands right now, it looks like I'll charge 10% supervision markup on all subs and materials, but they will pay them. Management time will be covered by my 10%, but if I take out my tools and do physical work, it will be billed at my regular rate of $50/hr.
They want a part-time laborer/handyman, which is fine with me. I'm planning on asking them 10% of his gross pay for any time on the job, and he answers to me, but I'll pay them for his time if he works with me on my bid work for them (I will still be doing the finish work, as it affords me opportunity to be on site during much of the day).
My accountant thinks this is completely do-able, and I haven't put anything in writing yet, but they're definitely happy to have me, and happy to be rid of their PITA contractor, so the contract shouldn't be a problem.
The orig. g.c. was an HVAC contractor who somehow talked them into letting him general the job - which is OK if could do a decent job, but he just didn't perform. He was almost never on site, hired questionable sub's with non-professional methods, his superintendent was a kid with no experience in construction, and he was real vindictive if anyone crossed him, which I unintentionally did.
He really shot himself in the foot by alienating me, because I have a lot of construction management experience, and even tho I was the finish carpentry sub, I was also doing a lot of clean-up and fix-it work behind the other sub's, as well as hand-holding the "superintendent" through a lot of his crises. Not stuff I normally include in my scope of work, but I bid this one high because I could see from the get-go that it was going to be problematic, so I didn't mind throwing in some extra freebies.
Definitely a bit of risk involved, and some guaranteed headaches trying to straighten things out and get them on track, but hopefully a good opportunity to grow my business in the right direction. Once this is done they'll break ground on building 23 more units in the dirt lot next door to this one. Maybe I'll be the GC on that one, which would be an exciting opportunity for me.
Thanks again to all who posted, for sharing your experiences, warnings, and insights!
"Down these mean streets a man must go who is not himself mean, who is neither tarnished nor afraid...He must be, to use a rather weathered phrase, a man of honor, by instinct, by inevitability, without thought of it, and certainly without saying it." - Raymond Chandler
Whose going to do your job when your doing the other guy's job. A one man band is no fun when you have to keep changing hats, tool belts, titles, organizeing subs., overseeing work, payroll, taxes. permits, inspections, keeping materials on the job, security, donuts for the crew, hiring, firing, interviewing. parking, trash pick-up. All day long and I only got one door hung. If you don't have an outfit going, at least get somebody to replace yourself since you're no longer going to be available to do your work. And a good Laborer who can keep the job site clean and run errands. You could probably do it with a skeleton crew, if everything else is legit and the money is there and the owners have leared their lessons and are willing to pay good money for quality work. Like my dear old dad used to say,"Don't be affraid to charge em the money. Gas isn't free you know."
In Calif, the Responsible Person of the company is the GC on the job. (Where? Oh, where is a troll when you want them?) Under certain conditions a company can hire an RP (or whatever they're called.)
Anyway. If the company that you will be doing this work for DOES NOT already have an officer or principle who is a licensed GC in Calif, then you could be the GC of record. For the next ten years.
I just researched all this for an argument with a 5150 (crazy person,) and now I CRS.SamT
Now if I could just remember that I am a businessman with a hammer and not a craftsman with a business....."anonymous". . .segundo <!----><!---->
Danger Will Robinson!
as soon as you said the previuous GC was another trade all my red flags went up. Maybe it is just my experience. But these kind of deals have not worked well for me in the past.
We had a fairly good size builder in the area go this route. He would see a tradesman with a little moxie and offer him a bit extra. Do your trade work AND a little supurvising. How hard can supervising be? After all the real work is done in the field. Right?
well it takes both supervision and field work to have a good worksite. The reeally good supers hardly look like they are working. But make no mistake. They have thier eyes wide open. Looking for FUBARS. And putting out fires before they take hold.
I strongly advise you to make enough on the supervising to make it full time. Hire an employee if needed to do your work. But give the supervision your full attention. And charge enough so that you don't have to trim at the same time.
You got it!!
I have held a GC's license in CA since 1982. I would not enter into any contracts with them. If they are stupid enough to hire an unlicensed contractor initially then they have not shown much business sense. That way they hold the liability bag. I would be on the job every minute and work as much as you can while making sure the job is done right. That way your license, name and liability is not involved. Have them pay you every week. Do not buy anything on any of your accounts. Buy the materials on their accounts. If you are not under a contract then you are not obligated to stay if they turn out to be crooks.
Brief update: Been on the job about 7 weeks - worked out a pay arrangement that works for all of us. The job is slowly getting organized, and a lot of the re-work is getting caught up, from the previous contractor. It was a lot of work to get it this way, however, and I should have asked for a chunk up front, as suggested. At one point I had to explain I needed 2k to stay solvent and keep the project moving, until completion of some of the units, and my percentage. They wrote a check that day, no questions asked. I have stopped using my tools, as was also suggested, and am full-time managing the project.
Owners are very pleased, and comment almost daily on what a difference they notice on the jobsite - quality of workmanship is much better, attitude of people on the jobsite much better, jobsite cleaner, neater, more organized. They don't have a model home for the 2-bdrm. model, but said they don't need one. They just take people through one of the partially completed units, and based on what people see, they're selling steadily. They recently asked me if I would consider traveling, to build-out similar projects around the country. I said if the price is right. We'll see.
Thanks to all for your input and advice!"Down these mean streets a man must go who is not himself mean, who is neither tarnished nor afraid...He must be, to use a rather weathered phrase, a man of honor, by instinct, by inevitability, without thought of it, and certainly without saying it." - Raymond Chandler
Gumshoe-This project is a dog. Get out and don't touch.First of all whenever you come in after a previous contractor on an abandoned project, be very weary of the client. If their story is all about "bad" contractor, think to yourself, what would the contractor's story be? "Bad" client maybe? Yes, there are some bad contractors, but most times it's a case of both bad clients and contractors. Here's another angle on that, when it's only a case of bad contractor; how does a professional person (in this case your investors) explain how they wound up choosing this bad contractor? Unless the case is airtight fraud, it's generally again a signal that they were looking to cut corners and this was the only contractor willing.What does that tell you about the client? "They definately learned their lesson." That's a joke. To you it means that they learned they get what they pay for. To them it really means that they need to withold more money until they are satisfied."They are going to build 23 more units right next door if this goes well." That will never happen. Ask anyone here."They want to pay 10%." I want to pay 0%. But that will never happen either. The going rate is probably closer to 30% and that's a for planned project, not a bail out.You said you were afraid to tell them about something costing more (original post not in front of me). That's a sign of a bad relationship.You're only hearing what you want to hear from them. You are ignoring what you already know in your heart of hearts. You're in way over your head and you don't know it, but they do.A bail out is NOT an opportunity to really make something of your company. A bail out is for really seasoned indivisuals who know how to present the bad news, take care of business and in the end profit.Anyone who has ever done a bail out will tell you the same thing: They don't care about the clients sob story. That will not be reflected in their price. The only thing they care about it what it will take to get it done and make a profit.In a bail out, time lines are not relevant, "Three weeks to complete." You NEED the client to understand that basically they are not going to make a profit on this project and that they need to do this just to unload the property and stop bleeding cash. That's all.Good luck, you'll find something else.-Allon
Lots of good advice here.
10% is definately too low. Usual is 10%mark-up and 10% overheat & profit on that for a total of 21%. Though that's usually if you pay the subs and bill the owner. The CalIfornia GC rules sound scary. I'm in NY and know nothing about them.You are not the previous "GC" but they want to pay you the same. Look out.
What's the $ amount of the 10%? It's propably way too low. Also, think hard about the other 23 units. What will they cost to build right? Don't lock in at the low rate. And you may never see that work anyway, even if they do build them.
First off, I'm Gumshoe the O.P. on this thread, but Prospero locked me out for some reason, so I had to re-register under a new name. Thanks again to all for the replies.
I worked as a sub installing cabinets, doors, and trim on this project before taking it over, so I know firsthand the problems with the GC. He was a dog, and I watched a lot of the problems unfold. The owners were always stand-up guys in all the business dealings that I observed. When the GC burned me for several grand, they pony'ed up the dough without a comment, other than to apologize for the GC. Their biggest fault was giving the GC too much trust and too many second chances.
The only reason I hestitate to charge more than the original GC is that he put them in a bind, by charging for sub-standard work, and not managing their money wisely. I could cite numerous examples of waste due to bad management. Having reviewed some of the costs I will be incurring, I feel comfortable with staying with the 10% markup. But if it does not work out, I have no qualms about telling them I would have to increase the percentage.
Even as a sub, this job was profitable for me. I will continue to do much of the same work I was subbing before, in addition to my markup on all other sub's and supplies. There's always a measure of risk involved, but I feel pretty comfortable going into this. The management part of the job is something I have a lot of experience and a successful track record with, and the job will not be run through my accounts, they will pay all subs and supplies. I have reviewed the money aspect of it with my accountant, and he feels comfortable with the arrangement also.
Whether the other 23 units happens or not is not a factor in my taking this one on - but all the underground utilities are in, and I'm guessing it will probably be a go. I realize nothing is for sure but death and taxes, so I'm not holding my breath on it.
Sounds like a great opportunity. They're in a tough spot and they're looking for someone like you to be their miracle worker. Just be honest with them and realistic. Keep the lines of comunication open, and don't sign off on any time deadlines. It may take a certain amount of awareness not to get yourself setup as being the next person to blame, when something goes wrong with their expectations. Its no picnic dodgeing phone calls and hiding out in mexico. Maybe it is, I haven't been down there in awhile but I could sure use some warm weather about now. Stay cool, have fun, and smile alot.
i would jump on it following the advice given and if you need workers use a skilled temp workers service exampel tradesman internationel
i am very familiar with the area, and i had a similar opportunity presented to me before i moved. not to take over a project gone bad, but to start one. I could not do the job with a clear conscience, i said no.
The problem i had with it was that most of the work would be done by people who were not legally in this country.
Aside from the financial responsibilities that go with that position, there are ethical responsibilities as well.
you already said that the "superintendent" was given the job because he was the only one who spoke english. the subcontractors are gone because they were the fired contractors guys, and they did crummy work.
the laws in california are clear, lawyer's will survey homeowners whose 10 year liability of new construction is about to expire and see if they can get a class action going, if there is already questionable work on this project you don't want your license anywhere near it, in fact if they (investors) had a me too clause on the original contract signed by subcontractors (like Ennis Homes and others do) you are in big trouble.
i would not in any way be involved with this project as anything other than an employee, i would also stress to the investors what the legal financial responsibilities are for an undertaking like this, by trying to get work done for the cheapest rate in central cali (kern co) they are employing illegal immigrants, it sounds like they got just what they paid for, and you should get a premium in trying to fix it for them.
I have bailed out jobs before, I thing i have noticed is every one that wanted a deal by scamming in the beginning did not change there colours, I may be wrong here but I remembered what my first carpenter told me, dont give your trade and skills to people that dont deserve it, The trade has value, Most all flippers and a lot of investers your a number to as in a bottom line, That being said do not put your lic out there, they will be more then happy to blame you later.
I watched too many bucks NOT go into my pocket as the GC. These guys are dealing in real estate so the term escrow should be familiar to them. I got to using the lawyer method (which they also should be familiar with) and that is retainer, retainer, retainer. Either way the nice guy troubled owners (and how long before the troubles go financial?) are in a bind. Bucks first, work second. You are not a bank bailing these guys out. Limit yourself to what you know NOW. In CO anybody or anything (corp, LLC, etc) cab be a GC. But, and it's a big but, there has to be a licenced supervisor directing the job. Don't get stuck being held responsible for what you don't have experience doing. Your wallet is already thin and you could end up losing YOUR residence--(assuming you own one). Not worth it. Tyr