Understand Why The “Types of Contractor

Operations” Are Important to You!

The way a contractor operates his business will impact the amount he charges for the work, how long the project will take, and how the company handles problems. It’s not that one operation is any better than the other; however, one opera-tion type will probably be a better fit for your project. It’s important that you understand the pros and cons within each operation so that you can factor in this intrinsic value when making your final selection.

For example, if you have a contractor whose bids are lower but will take longer to complete the job, then you have to look at the value of that time.

In this chapter, I explain the different types of operations as well as the pros and cons of each type, along with a summary that includes my recommendations. You should know that 99 percent of all contractors and subcontractors will operate their business in one of the following four ways.

 

 

Always make sure you hire a contractor who has a lot of experience with your type of project. I would not recommend being any contractor’s guinea pig on a type of project that he has not completed before, no matter what! Also, don’t get ahead of your payment schedule. Structure the draw schedule so that there is a substantial amount due at the end. This provides the contractor with a real incentive to complete your project. A good rule of thumb is to leave three times the value of the work due at the end of the project.

 

The first type of operation is what I call the Pick-Up Truck Contractor. This contrac-tor basically operates his business from a truck. He may have a home office where he goes to do paperwork after working in the field all day. As you can guess, a good time to catch this type of contractor is after 5:00 p.m.

The pick-up truck contractor usually has no office employees and only two or three employ-ees in the field. The company’s revenue is usually less than $1 million for a general contractor and less than $400,000 for a subcontractor. These companies typically have no more than three projects going on at the same time (one starting, one under construction, and one that is being punched out, meaning that the contractor is completing the punch list).

The owner of this type of business will be the estimator, salesman, and the technician, and he will actually be working on your project daily. The benefit of this type of contractor is that the overhead is low, which means his pricing should be lower. Additionally, the pick-up truck contrac-tor will often estimate your project for wages, which means more savings for you. Another benefit is that when you speak with the con-tractor, nothing gets lost in translation because he is the guy actually doing the work.

The cons to this type of operation include having to wait for his availability. He needs to substan-tially complete the project he is currently work-ing on, and if that project is delayed or more work is added to it, you will have to wait longer.

Another problem is that he will miss days on your project because he has to go back to complete his last project. When he is about 75 percent complete on your project, he will be looking for his next project, which means he may show up late, leave early, or maybe not show up at all simply because he can’t be two places at once. All of this, plus he may need to take personal days for illness or other time off.

Warranties with the pick-up truck contractor are practically nonexistent outside of the manufac-turer’s warranty. Be sure to read any manufac-turer’s warranty conditions. Your biggest problem with this type of operation will be getting your project completed 100 percent.

Summary: The pick-up truck contractor is usually new in business and or is less sophisticated and will likely have limited resources as well as finances. I like to use this type of operation for smaller projects, typically those that cost less than $50,000 for general contractors and $5,000 for subcontractors.

 

 

 

The next example is what I call a Lead Man Contrac-tor. This type of contractor may operate out of his home or may have a small office and with a full- or part-time secre-tary or office assistant. The lead man contractor will usually not have more than 10 employees (one person in the office, four lead men, one production manager, one laborer, and three tradesman), and the company’s revenue is typically less than $2 million for a general contractor and less than $1 million for a subcontractor. This contractor usually has no more than eight projects going on at the same time (two starting, four under con-struction, and two that are being punched out, meaning that the contractor is completing the punch list).

The owner of this type of business will be the estimator, salesman, and the project manager who schedules manpower, awards subcontracts, orders material, and does quality control by performing site visits. He may also have a pro-duction manager who is used to manage the foremen, perform quality control, change orders, and manage subcontractors. The owner of this type of operation usually does not do any actual construction work unless it’s an emergency.

The benefit of using a lead man contractor is that your project will usually start when agreed because the company can shift manpower around to complete one project while starting another. These contractors are more sophisticated and will typically have a system in place for change orders, selection of materials, and construction schedules. Their overhead can be low if they are operating at haul speed (which means they have enough work for all of their project foremen). Their warranties are usually better and for a longer period of time. Additionally, lead man contractors will have more purchasing power because of their volume, which means more savings for you.

The cons to this type of operation include the contractor not having enough or too much work. If he has too little work, then he will have to make up the overhead costs in future projects by increasing his fees, which will cost you more. On the other hand, if this type of contractor has too much work, then you might get a new foreman who has not been tried and tested, which could lead to an inferior project. Your biggest problem with this contractor will be identifying his workload.

Summary: I like this type of operation for mid-sized projects, typically less than $250,000 for general contractors and $50,000 for subcon-tracttors. If you have a smaller project and a lead man contractor can squeeze your project in between larger projects, you may be able to get him to match one of your lower bids.

 

Anytime you can get a larger, more sophisticated contractor to match the price you are targeting on a smaller project, I would more than likely give the project to that company. The “best for less” is what we all want.

 

The next example is what I call the PM[BG1]  Contractor. This type of contractor will have an office and a full-time secretary or office assistant, a bookkeeper, one or two project managers, a marketing person, and possibly an estimator. If the contractor is a design-build company, then it will have some sort of design team or on-staff architect. The PM contractor will usually not have more than 25 employees and revenue will be less than $6 million. The company will typically have no more than 16 projects going on at the same time (four starting, eight under construction, and four that are being punched out, meaning that the contractor is completing the punch list).

The owner of this type of business may be an estimator and/or salesman and will perform some quality control functions. The company’s project managers will manage the production managers and/or foremen as well as most quality control and subcontractor management.

The benefit of this type of contractor is that your project will start when agreed because the company can shift manpower around to complete one project while starting another. PM contrac-tors are more sophisticated and will typically have systems in place for change orders, selec-tion of materials, and construction schedules, as well as safety plans. They will have more pur-chasing power with subcontractors as well as suppliers because of the volume they do, which means more savings for you. Their warranties are usually better and for a longer period of time.

The cons to this type of operation include having higher overhead because it just costs more to operate a larger business that handles larger projects. Your biggest problem with this con-tractor will be getting the price you want.

Summary: I like this type of operation for mid-sized to larger projects, typically $250,000 to $1.5 million. If you have a smaller project and this type of contractor can squeeze your project in between larger projects, you may be able to get one of these companies to match one of your lower bids.  

 

 

 

The final example is what I call a Big Business Contractor. This type of contractor is a major operation with marketing staff, sales staff, an estimating department, a production team, superintendents, foremen, human resources, an accounting department, and a technical support team. Big business contractors usually work on larger projects for an upscale or institutional clientele. If you have a project that demands this type of contractor and you are looking to save money, my recommendation would be to scale the project down in size or calibrate your finish schedule to accommodate your pricing parameters. For those of you who are using this book to save money, you probably won’t really be interested in this type of con-tractor. Most contractors aspire to be this type of operation; however, few ever get here. Typical clients of this type of operation are high-income individuals who want the best and are willing to pay for it. And with that being said, we will just move on.

 

 

 

Now that you have an understanding of the types of contractors and the different types of opera-tions, you should be able to identify them with a series of simple questions. This will also give you perspective on dramatic pricing differences when pricing your next project. As you might have figured out by now, finding the best contractor for your project is a pairing process that encom-passes the type of contractor, the type of opera-tion, the pricing, and the intrinsic value of time and risk. Anybody can purchase a good bottle of wine for $50, but it takes a little effort to get a good bottle of wine for $12.

 

 

 

Understanding The Types of Contractors and Why It’s Important to You!

There exists a multitude of types of contractors—when you are soliciting contractors, you need to understand these different types of contractors and what they specialize in so you can get started in the right direction.  For example, when you are looking for a doctor, you would narrow that search down to a specialty like cardiologist, general practitioner or orthopedist.  The same holds true when you are looking for a contractor. First, you would narrow your choices down to the type of contractor, like General Contractor, and then you would focus on a specialty.  Examples of general contractors specialties[GN1]  include design-build contractors, remodeling contractors, or new home builders.

I’ve broken down the different types of contractors and what they should be qualified to do in order to help you better understand what type of contractor you will need for your project.  Subcontractors (or “subs,” as we’ll refer to them frequently) are a type of contractor that is trade-specific and would be used depending on your project demands. Subcontractors include plumbers, electricians, and painters, among others. I have listed the different trades of subcontractors and briefly explained the type of work they should be capable of doing.

Additionally, subcontractors are specialized within their trade. For example, plumbers can be broken down into plumbing utility, plumbing for heating, plumbing for new homes, plumbing repair, and so forth. They are all plumbers, but they specialize within their trade.  Subcontractors specialize within their trade because the labor skills and equipment needed for the many types of jobs can be dramatically different.  For example, it wouldn’t be cost effective for a concrete subcontractor who works primarily on patios and walkways to go out and spend $20,000 on steel forms that would be required for forming a foundation. On the other hand, it would be cost effective for a concrete subcontractor who works primarily on foundations to offer patios and walkways because all he would need is a trowel.

In this scenario, if you have a project to build only a patio and a walkway, you should look for a concrete subcontractor who works primarily on that type of project. On the contrary, if your project also included a foundation, then you should be looking for a concrete subcontractor who does foundations but can also do patios and walkways.

I have listed the typical specialized services within each trade. Additionally, I have added money-saving TIPs that most General Contractors would apply.

Another note worth mentioning is that subcontractors typically don’t do cutting and patching. For example, if your new duct work or plumbing has to go through a concrete wall to expand into a new addition, then you would need to get someone else to cut and patch the opening for the subcontractor. General Contractors consider this to be “impact work.” The lesson here is that when a subcontractor performs his work, you need to understand what additional work, if any, they will create so you can calculate the total costs.

The lion’s share of most subcontractors’ work comes from other General Contractors. This may affect you because your project may just be a one-time shot for the subcontractor. If that’s the case, your project may take second fiddle if your sub’s bread-and-butter GC needs him on a big job. This is especially true if he is a small contractor.  Additionally, whenever you can group multiple tasks or trades with one subcontractor, you reduce the blame game as well as make the project easier to manage.  For example, let’s say you’re project is an addition: You would try to group the excavation, concrete footings, foundation, concrete slabs, and walkways with the concrete subcontractor just like you would try to group the demo, framing, exterior trim, and siding with the framing sub.  Another example would be that if you are installing granite countertops, I would have that subcontractor install the sink, too, because, in the unlikely event that a crack appears, then we know who is responsible. Doing it this way can be a little more expensive, so you have to look at the costs versus the benefits.

Other groupings that make sense are:

• Masonry and precast concrete
• Trim carpentry and cabinet installation
• Carpet, vinyl and wood flooring
• Drywall and painting
• Stone tile and stone countertops
• Plumbing, heating and cooling

 

 

Trade: Excavation Subcontractors

Types of Work: Large driveways, spreading gravel, digging foundations, or regrading your yard.

Specialized Services: Highway excavators, site development excavators, foundation and driveway excavators doing both small and large projects.

TIP: Unless your project is clearing a site, grading a long driveway, adding on a huge addition, or building a new home, you really wouldn’t need an excavation sub because most concrete subs and landscape subs have their own smaller excavation equipment like Bobcats that can maneuver around in tight spaces. In the unlikely event that you do hire an excavation contractor, the company typically charges by the hour with an equipment moving charge OR they can offer a fixed price. If you have a larger site development project, you may have a lot of dirt that needs to be moved in or moved out. This can get expensive in a hurry! One way to avoid this is by locating another project that either needs dirt of needs to get rid of dirt, so you can swap dirt!

Trade: Demolition Subcontractor

Types of Work: Demolition subs are typically not used in smaller residential projects—this work is generally done by the framing sub. However, if you have a large project like an existing addition that needs to be removed or if you plan on razing a home, then a demolition contactor may be a good fit.

Specialized Services: Commercial and residential. Some demolition subcontractors will offer remedial services for the removal of hazardous materials like asbestos. However this is usually a specialty service, and I have found that those demo subcontractors are generally much more expensive than one that does not offer remedial services.

TIP: If your project includes removing an addition, try to get the excavation contractor, concrete sub, or the framing contractor to tackle your demolition needs.

 

Trade: Concrete Subcontractors

Types of Work: Footings, foundation walls, patios, walkways, and slabs.                                    

Specialized Services: Foundations, flat work (basement/garage slabs, walkways and patios),  pre-cast concrete, concrete restoration/cleaning, pool decks, concrete countertops and surface concrete applicators for resurfacing (acid finishing, stamping, coloring or polymer toppings). 

TIP: If you have an addition, try to get the concrete subcontractor to handle all your basic concrete needs (excavation, footings, foundation, slab, walkways, and patio) and make sure the estimate breaks down the costs of the different types of work. Note: This type of concrete sub will probably not be able to handle surface applications, countertops or pool decks. Additionally, try to get the concrete subcontractor to include the excavation in his scope of work.

BONUS TIP: If you want to tackle a small concrete slab project on your own, then you may want to hire a concrete finisher. This will save you money; just remember that there is a four-yard minimum charge for what is called a “short load” of concrete.

Trade: Masonry and Stone Masonry Subcontractors

Types of Work: Some foundations (typically small additions with crawl space because of the costs), brick veneer, stone veneer, retaining walls, decorative columns, entrance ways,  cutting and patching masonry openings, fireplaces and brick paving.

Specialized Services: Commercial, residential, industrial, institutional, brick paving, stone work, brick veneer and fireplaces, brick and block. I have seen some masonry subcontractors who will not consider cinder block, mostly because they don’t like to. Note: Most masonry subcontractors do not do stone work and vice versa unless the project is a stone retaining wall.T hen a stone mason would handle the cinder block structure behind the stone work.

TIP: if you have precast stone in your stone or brick project, then get the masonry sub to include this with the bid. Make sure the sub breaks this out so you can see what he is charging. Some subs are just not sophisticated enough to handle the precast, so you may have to tackle this yourselfbot gate.io .

         

 

Trade:  Metals Subcontractors

Types of Work: Structural steel beams and columns, handrails, or custom metal applications.         

Specialized Services: Structural steel (beams, steel joists, steel columns), miscellaneous metals (hand rails, fire escape ladders, steel grates, iron forging, and some fencing) custom metals (stainless steel railings, custom fabrication with high end finishes).                                                             

TIP:  Most framing subcontractors are capable of setting steel beams and columns. If you purchase your structural steel at a steel supplier, have the framing contractor install it—you will save some money. 

 

 

 

Trade: Framing Subcontractors (Carpentry Subcontractors)

Types of Work: Framing is considered to be “rough carpentry.” Framing subcontractors are typically experienced in the framing of your home, including additions, exterior trim (exterior window trim), Cornish (which is the gable and eave trim), wood or Hardi siding, installation of exterior doors and windows, house wrap, wood decks, and stairs.

Specialized Services: Commercial, residential, new construction, and renovation. Some framing subcontractors will offer trim carpentry and millwork services as well.                                       

TIP: If your project has stairs that are complicated, than get a stair sub to install them. Just make sure the carpentry sub is there if there’s a problem.

 

Trade: Trim Carpentry Subcontractors         

Types of Work: Interior trim, for example, the moldings around doors and windows. Trim carpentry subcontractors are typically experienced and will install door and window casings (that is, moldings), manufactured cabinets, interior doors, simple interior railings, decorative moldings (crown, chair rail, and so on), shelving, and door hardware. Some trim subs can do a pretty good job at simple built-ins and wainscot. 

Specialized Services: Residential, commercial, custom interior, and exterior trim.

TIP: Not all trim subs are created equal, especially when it comes to installing cabinets. If cabinets are included in the scope of your job, make sure that you have seen their work or that the sub has demonstrated capable experience installing cabinets, especially when they are expensive and have taken a long time to order. If the sub is a certified installer for your cabinets, then all the better; however, you should still get some competitive bids.                                                                                        

 

Trade: Architectural Woodwork/Millwork Subcontractors

Types of Work: Custom built-ins, raised panel wainscot, laminate countertops, custom cabinet installation and/or fabrication. Millwork subs typically can do anything a trim carpenter can do at a higher level of quality—and for more money.  Millwork subs can also typically can[GN4]  finish their product.

Specialized Services: Commercial, residential, medical and dental cabinetry, custom paneling, solid surface and laminate.

TIP: Do not get an architectural woodwork or millwork subcontractor to manufacture your kitchen cabinets if you can avoid it. There are too many capable kitchen cabinet manufacturers that offer up to lifetime guarantees/warranties versus a one-year warranty, which is typical for a millwork sub.

 

 

Trade: Wood Stairs and Wood Railing Subcontractors

Types of Work: Stairs and railings. Stair and railing subcontractors typically will either furnish or furnish and install the stairs and railings.

Specialized Services: Fabrication and/or installation of spiral, metal, or wood stairs and railings.        

TIP: Depending on the complexity of the project, you may just want to purchase the stairs and railings and have them delivered. You can let the framing sub install the stairs and the trim carpentry sub install the railings. If your project includes radius stairs, have the stair manufacturer install both. Something else worth mentioning is that when you have stairs manufactured, you can select the material for the treads, risers, and railings. Note: I recently had a project where the owner wanted a reclaimed wood product for the stair treads. We provided the exotic wood to the stair manufacturer, who used the wood for the treads. Then we used a dark stain on the standard wood rails to save money.

 

 

 Trade: Waterproofing Subcontractors and Foundation Coating Applicators

 Types of Work: Waterproofing subs typically waterproof an existing basement that has water penetration issues. They fix this problem by removing a two-foot wide concrete swath at the perimeter of the foundation inside the home. Then they install drain tile and connect it to what is called a “crock,” along with drilling holes through the foundation wall about every 12 inches. The sub inserts a pipe into the hole and connects the pipe to the drain tile (this releases the static water pressure and gives the water a place to go). Then he patches the concrete, installs a sump pump into the crock, and runs the discharge pipe to the exterior.  There are waterproofing subcontractors that waterproof the exterior of foundations. This process is typically performed with a hot tar application that is sprayed on the exterior of the foundation when it is exposed during new construction.  If this is what you’re looking for, then you should also search for a contractor who does foundation coatings.

Specialized Services: Commercial, residential, waterproofing, foundation coating, caulking and restoration.                              

TIP: The waterproofing contractors will send a salesman who will do everything he can to get you to sign a contract before he leaves (this is his goal). Note: These guys are very persuasive and relentless so be strong and DO NOT SIGN before you have at least three estimates. Only then can you make a knowledge-based decision on your terms. With regards to the foundation coating applicators, most concrete subcontractors will include this in their estimate, and you should get them to take care of this if you can. Either way, make sure you get them to apply a coating to the top of the footings before the foundation wall is formed or constructed, if a basement is created; otherwise, it’s not an issue. This prevents water wicking up into the foundation wall, which can cause mold. 

 

Trade: Insulation Subcontractors                  

Types of Work: Insulation subs typically furnish and install what is called “batt insulation” in the exterior walls, in between the floor joist, the band board, the crawl space, and the attic (a lot of them remove existing attic insulation as well). Some insulation contractors offer a blow-in type of insulation in the attic area, while others offer spray foam insulation in lieu of batt insulation.                             

 

Specialized Services: Spray foam, commercial, residential, repair, batt insulation, blow-in, mechanical pipe insulation.

TIP: If spray foam is the product you are looking for, then make sure you get estimates from insulation subs that just do spray foam. Additionally, insulation subs typically offer a caulk-and-seal option. You want to include this because the benefits outweigh the cost.

 

Trade: Window and Siding Contractors

Types of Work: When remodeling the exterior of existing homes, window and siding contractors typically replace exterior siding (most types), replacement windows, vinyl or aluminum and wrap exterior trim, including fascia and soffit (aka Cornish). Some window and siding contractors will offer roofing (usually shingles only) as well as aluminum gutters and down spouts.

 Specialized Services: Commercial, multifamily, new construction, historic replacement, and residential.                                           

 TIP: General contractors typically would not hire a window and siding contractor for a residential project because their framing sub or in-house carpenter could install any windows. Furthermore, they would hire a roofing contractor for the roofing and a siding contractor for the siding in order to save money. I would encourage you to do the same.  Window and siding contractors will usually send a salesman who will do everything he can to get you to sign a contract before he leaves (this is his goal). Note: These guys are very persuasive and relentless so be strong and DO NOT SIGN before you have at least three estimates then you can make a knowledge based decision on your terms.

 

Trade: Roofing Subcontractors

Types of Work: Roofing new or existing structures including asphalt shingles, wood shingles, membrane roofing, metal roofing, slate shingles, simulated shingles and concrete shingles. Many of these contractors offer gutters and down spouts as well.

Specialized Services: Commercial, residential, industrial, metal, membrane, wood, or asphalt shingles.

TIP: Roofing subcontractors often times sub out the labor to what are known as piece workers. These piece workers are not employees and get paid by the “square,” which is 100 square feet. The type of roofing project you have will dictate the type of roofing subcontractor you should select. If you have a roofing project, I recommend that you go to www.eagleview.com and purchase a roof report!  This report will give you a comprehensive estimate of all the roofing materials you will need for an existing home. You can then send this report to roofing suppliers and roofing subcontractors. This small step will cost you about $75.00 but could save you thousands.

 

Trade: Garage Door Subcontractors

Types of Work: Furnish and install new garage doors or replace existing garage doors.

Specialized Services: Residential, commercial, overhead doors and operators, and rolling steel doors.                                                     

TIP: Look for a small contractor with few employees. You may have to wait for availability; however, the savings can be substantial. Expensive doors usually have a knock-off at half the cost. If you need a motor, be sure to get the kind with belt drive (quieter and fewer problems). 

 

Trade: Glass and Glazing Subcontractors

Types of Work: Shower enclosures, mirrors, decorative glass products, and toilet partitions.

Specialized Services: Residential and commercial (many do both).

Tip: There are many different types of products available in this trade, so you should understand that these contractors limit the number of products that they carry. If you want a product that they don’t carry, they will try to spin into buying what they do carry. Most of the time, the products they do offer will suffice. In the unlikely event that you are specific about a product selection that the subcontractor does not carry, the sub will often offer to get that product for you. Be prepared to pay a premium—more often than not the products they carry are less expensive, and if they know you are willing to pay for a special order, then they will charge extra plus installation. My advice here is to be flexible with product selection if you want to save money.  If you want a specific product, then contact the manufacturer and ask the company for a list of dealers that serve your area. If you just need mirrors, then purchase the mirror product directly from the glass and glazing subcontractor and install it yourself. It’s really simple and you will save almost 50 percent on material alone over making the purchase at a big box retailer like Home Depot or Lowes. If that’s not an option, then get a carpenter to install it.

 

 

Trade: Drywall Subcontractors

Types of Work: Hanging, finishing and patching drywall, acoustical ceilings, and metal framing.                                   

Specialized Services:  Commercial, residential

TIP: The drywall trade is really broken down into four categories (material suppliers, drywall hangers, drywall finishers and drywall sanders).  The hangers, finishers, and sanders are typically piece workers and get paid by the board; therefore, always buy 12’ board when you can. A bad drywall job equals a bad paint job, so hold onto your money until the first coat of paint is completedbecause blemishes will then stand out and the drywall sub will be able to point up their work.

 

Trade: Ceramic Tile Subcontractors

Types of Work: Ceramic tile and or stone tiles (not to be confused with patio or walkway stone that would typically be performed by a stone mason).                                            

Specialized Services:  Residential and commercial.                                 

TIP: There are many different types of tiles and stones, so I would recommend taking into account the contractor’s experience with the selected material as a part of your final decision before awarding the contract. Always use a KERDI or DITRA membrane product at areas that are exposed to water (shower and tub surrounds). Ceramic and stone tiles have main distribution channels; let’s say you were to go to Home Depot and find a tile you like—that tile will have a Home Depot number. That number only means something to Home Depot; however, if you were to take a sample tile to other tile distributers such as Daltile, Best Tile, Mosaic Tile, or another company, you could locate the dealer who sells the tile to Home Depot and save big. What you are looking for is the main distributor for any given tile product: If you can find the distributor, you will save big by eliminating the middleman.  Another way to save on tile material is to get the sub to allow you to purchase the material on their account with their discount and then just right a check to him on the spot.  He should be willing because he gets to use the money until the invoice comes in which is around 30 days.

 

Trade: Countertop Subcontractors

 Types of Work: Granite countertops, quartz product countertops, plastic laminate countertops, solid surface countertops, and concrete countertops.

 Specialized Services:  Residential, commercial, granite, quartz surface, plastic laminate, solid surface (Corion), and concrete.

TIP:  Countertop fabricators and installers are product-specific. For example, a granite countertop sub will typically offer quartz and other stone products because the machinery used is specific to the product. A granite countertop sub typically does not have the equipment for laminate, solid surface, or concrete countertops. The same holds true for laminate and solid surface countertop subs because the equipment needed to fabricate those countertops is different than what is needed for stone products. Concrete countertops are a specialty product/service that are poured in place by a technician with specific skills. The more details (edge detail, sink cut outs, holes for faucets and soap dispensers, and so on) you add to your countertops, the more they will cost. Granite is priced in one of four categories, type I being the most expensive and type IV being the least expensive. Fabricators of stone countertops are not suppliers, so if you are able to locate a remnant slab, you should be able to negotiate a great price. Someone else has already paid for that slab, and it’s just lying around; always check out the remnants that fabricators have. These are usually great for vanities.

 

Trade: Wood Flooring, Carpet, and VCT or Vinyl Subcontractors

Types of Work: Installing wood flooring, re-finishing wood flooring, installing carpet, vinyl composition tiles (VCT) and sheet goods, which are 12’- to 13’-wide products that come in any length. Flooring also comes in cork and linoleum.                          

Specialized Services:  Commercial and residential.

TIP: Most retail flooring subcontractors sub out the labor to piece workers who will install the carpet and sheet goods by the square yard, while VCT and wood flooring is priced by the square foot. Wood flooring may have two types of installers, one who installs and the other who sands and finishes. If you have the courage, shop for your carpet online and find a piece worker to install it. You can save really big here. For example, I received three bids for new carpet and sheet vinyl flooring for a project I was recently working on. One of the bids was $17,000, the second was $14,000, and the third was $16,000. I felt like I could do better, so I purchased the carpet and sheet vinyl online and found a carpet installer (piece worker). I spent a total of $10,000 which saved me 40 percent over the lowest bid. You can do this too.

 

Trade: Painting Subcontractors

Types of Work: Interior and exterior painting.

Specialized Services: Commercial, residential, industrial, fence painters, barn painters, faux finishers, and specialty applicators such as Polymix.

TIP: Painting is the signature of the project. A good painter can make a marginal project look great. That being said, painting is the easiest to correct. Always use good paint, and if you can afford it, use primer blocker on everything before applying two coats of the base color. Doing this flattens the overall finish and hides imperfections and stains as well. Latinos have dominated the painting and drywall market. If you don’t speak Spanish, and you are trying to communicate, be sure they understand what you are saying. I have achieved positive communication results when I get the subs to repeat what I just explained to them. It’s just too easy for them to say, “Si,” and then later come back and say, “That’s not what I thought you meant.” Therefore, be very specific about the quality of the paint, the coats of paint, and how many colors, and then explain that the walls, ceiling, and trim will transition with straight lines. Many times, I have hired the low-bid painting contractor and given him the opportunity to correct any issues on my terms. If the contractor was unable to make the corrections in a timely manner, then I would hire my “top gun” painting contractor to crispin up the paint job and backcharge the original painting subcontractor for those costs as well as my time. 

 

Trade: Plumbing Subcontractors [GN6] 

Types of Work: New Plumbing, plumbing repair, boiler plumbing, septic tank plumbing, utility connections, sewer line inspections, hot water heaters, and gas piping.                                       

Specialized Services: Residential, commercial, utility, new construction, repair/service, remodeling, radiant heating, boiler, gas piping, and specialty product plumbing.                         

TIP: Typically plumbing contractors have their own employees; however, make sure you pair the project with the right sub. For example, you would not want to call a new construction plumbing sub to fix your leaky waste line. This contractor typically does not work in homes that are occupied nor does he or she deal with waste in the line, so this sub is more than likely going to decline the opportunity. If the project is small enough, you may be able to find a plumber technician who will moonlight on nights or weekends. You can also purchase the plumbing fixtures yourself and save on the markup fee.

 

Trade: HVAC Subcontractors

Types of Work: Heating and cooling equipment and duct work, geothermal (ground source heat-pump), and service work.

 Specialized Services:  Residential, commercial and PHVAC (which includes a plumber for hydronic heating systems who will typically do boiler work as well).

TIP: Residential Heating and cooling systems are typically not designed by an engineer because the cost to design the system usually exceeds the benefits. In residential construction, it’s customary for the mechanical contractor to design the system. Evaluating bids and/or estimates can be tricky because HVAC subs represent a specific manufacturer and there are many options. For example, Trane, York, Carrier, and similar companies are manufacturers, and they all will offer different efficiencies (10 SEER, 20 SEER, and so on) as well as different filters, humidifiers, thermostats, zoning, and other options. It’s important that you understand the scope of work, know who the manufacturer is, and get a complete list of the equipment proposed.  Note: Typically we would solicite multiple bids, let the subs tell us what is needed, evaluate and come up with the best system and equipment, then re-bid the project with the system we were convinced was the best solution. 

 

Trade: Electrical Subcontractors

Types of Work: Electrical wiring, switches, outlets and fixtures, service work, upgrading electrical service and generators.

Specialized Services:   Commercial, residential, and industrial.              

TIP: Electricians are tradesman and are not to be confused with electrical subcontractors. Electricians may work for an electrical subcontractor, or directly for individuals. When you purchase light fixtures, for example, you save on the markup fee from the sub, but you will not receive the same discount at some lighting suppliers. 

 

 

Same-day-service subcontractors: These subcontractors have emerged out of demand to fill a gap in the market place. That demand is for a contractor to show up the same day you call or within a given time frame, typically within 24 hours. When this contractor arrives, he will estimate the work and begin the repairs right then if you accept the estimate.

These subcontractors typically offer plumbing, HVAC, or electrical services, as well handyman work.

Now let’s look at how they work. Let’s say you have a bathroom above your kitchen and the waste line is leaking water through the drywall ceiling into the kitchen. So you call one of these same-day-service subcontractors like “Michael & Son.” The company will guarantee that someone will be there within, say, 24 hours. There will be a minimal charge for him to show up and give you an estimate. If you accept the estimate, he will begin the work immediately. If you refuse, all you pay is the fee for showing up.

The good news is that this type of sub  will fix the plumbing; however, you may still need to schedule a handyman to patch and paint the disturbed areas. The bad news is that the pricing is generated by a pre-determined database that is similar to the way car dealerships calculate estimates for auto repairs. This usually means that the repair is more expensive. If you’re in a pinch, however, this might be the perfect solution.

TIP: Use this type of contractor if you are in a bind. This type of contractor typically does not negotiate, but you should still give it a try.

 

Specialty subcontractors are used for what is considered to be a “specialty trade,” because not everyone needs or wants specialties in their home. For example, alarm system, whole-house sound systems, bowling alleys, athletic courts, window blinds, or pest control. I think you get the point. Outside of window blinds and pest control, getting competitive estimates that are scoped in[BG7]  can[GN8]  be tricky because the specialty trade may be manufacturer-specific and therefore knowledge of the products will be needed.

TIP: Research and identify the product you are interested in, and then contact the manufacturer for a list of authorized/certified contractors. At this point, you can bid your project out.  If your project is window blinds, order your window blinds online. Have just about any carpenter install them and save BIG.

Handyman contractors have been around since the beginning of time and they operate similarly to the same-day-service subcontractors, although some will work on an hourly basis. Most handyman technicians can do rough carpentry, trim carpentry, drywall patching, light painting, ceramic tile patching and/or grouting, siding repair, window and door installation, roof repair, could possibly relocation of a small piece of duct, installation of a faucet, or changing a light fixture or switch.

TIP:  If you find a good handyman that is reasonable, keep the contact information of the company and more importantly the technician.

General contractors/remodeling contractors are used for remodeling areas throughout the home. Typical projects for a remodeling contractor would be basements, bathrooms, kitchens, additions, and whole-house renovations.

TIP: I cannot express this enough—detailed drawings with fixtures and finishes selected prior to pricing takes the guess work out, drives the price down, and gives you the opportunity to really save money.

General contractors/Design-build contractors are remodeling contractors who either have an architect or designer on staff or they sub the architectural portion out. Using these contractors is a great way to save on larger remodeling projects because they generally offer discounts on design.

TIP: Only pay as you go. What I mean by this is, if you use a design-build contractor, don’t get locked into using them exclusively. Pay them for the design first, in a separate agreement from the construction agreement. In this way, the plans become yours so you can hire another contractor if you don’t like the pricing of the design-build contractor. You can still use the design-build contractor if you like. This process simply keeps everyone honest and enables you to get the best price. If the design-build contractor will not give you the drawings to bid the project out, then look for another design-build firm.

 

General contractors/home builders build new homes. There are builders who refer to themselves as “custom builders” and those who are “speculative builders.” Custom builders will build just about any home on your lot or will build one of their models on a lot in one of their subdivisions. If they have a random lot, they will build to your heart’s content or as covenants and restrictions allow. I would never hire a speculative or custom builder for a renovation project for a multitude of reasons. For example, their subcontractor base is different. They may have a crew that is very talented, but this crew is not accustomed to working around homeowners. Let’s just say they are not as polished as the employees of a remodeling contractor. However, there is a  benefit: cost. Unsophisticated labor is cheaper than sophisticated labor. Remodelers are more accustomed to working in occupied areas. By the same token, I would not hire a remodeling contractor to build a custom home or a speculative home because I would not care what the subcontractors looked like as long as the work was good.

 

 

 

This is my new site “Remodel Your Home For Less” where I will be sharing insider secretes to homeowners who want to save money when repairing or improving their home.  Look for trending styles, unique features for the home as well as dealing with contractor tips.