# Dealing with Property Management Companies



## SPCarpentry (Feb 12, 2007)

For the past year I have been doing small jobs off and on for a 2 person Property Management Co. Most of the jobs are small, under 2K. On average the material is running around 40% of the total job cost. They demand that I pay for all materials up front and then bill them for the complete job when done. From time to time I try to get some $$$ up front to cover the material but all I get is " you need to save your money for future jobs!" I respond with that would be nice to do BUT the money made from job A goes for the material for job B etc. I like working for them, and we work well together. I just can't keep working this way.

To those who do similar work how do you go about it? I don't want to start charging the materials because then I'm just financing the job for them. I'm not getting my regular rate as it is.


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## mdshunk (Mar 13, 2005)

Property management companies, like real estate agents, can keep you plenty busy. They're pretty much bottem feeders, however, so it's not exactly the type of work most people actively seek out. If I was you, I'd cultivate other business relationships.


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## KillerToiletSpider (May 27, 2007)

SPCarpentry said:


> For the past year I have been doing small jobs off and on for a 2 person Property Management Co. Most of the jobs are small, under 2K. On average the material is running around 40% of the total job cost. They demand that I pay for all materials up front and then bill them for the complete job when done. From time to time I try to get some $$$ up front to cover the material but all I get is " you need to save your money for future jobs!" I respond with that would be nice to do BUT the money made from job A goes for the material for job B etc. I like working for them, and we work well together. I just can't keep working this way.
> 
> To those who do similar work how do you go about it? I don't want to start charging the materials because then I'm just financing the job for them. I'm not getting my regular rate as it is.


How quickly is their pay out turnaround?

If they are paying in a timely fashion charging material at an open account at a lumberyard should balance itself out, as you get thirty day terms from most.


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## ron schenker (Dec 11, 2005)

KillerToiletSpi said:


> How quickly is their pay out turnaround?
> 
> If they are paying in a timely fashion charging material at an open account at a lumberyard should balance itself out, as you get thirty day terms from most.


And/or use a credit card for some creative financing


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## Celtic (May 23, 2007)

mdshunk said:


> If I was you, I'd cultivate other business relationships.


If I was the OP, I'd bump my material prices up to cover the finance fees  ...not on the OP's credit accounts, but rather the client's credit account:shifty:


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## crb555 (Jun 14, 2007)

There is a cost associated with money. The way I see it, you have two choices...either you quit the relationship, or raise your prices to the point where you don't mind financing them.

We do a lot of work for a relatively large contractor that routinely pays 90 - 120 days late. On the first job.. yeah, we were ticked about it... after the second job, we decided to just let them know upfront.... " we would love to do your jobs, but we are going to raise our rates unless you can pay in a timely manner." They chose to continue paying late, and we jack the profit margin on their jobs. We are both OK with this relationship, no big deal, once we know what the rules are...and these are 300k to 500k plumbing jobs.

Now, you need to remember that we have enough capital to do this, and it would not put us out of business even if they defaulted on a job. If your not liquid enough to absorb the cost, you might want to seriously consider severing that particular relationship.

Determine your comfort level of risk. And also remember at the negotiating table that they need you as much as you need them, probably more so, because not many contractors are willing to finance jobs.

Crb5


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## KillerToiletSpider (May 27, 2007)

mdshunk said:


> Property management companies, like real estate agents, can keep you plenty busy. They're pretty much bottem feeders, however, so it's not exactly the type of work most people actively seek out. If I was you, I'd cultivate other business relationships.


I can disagree with that, when I did service work, we dealt with a few property management companies that oversaw large condo complexes, we did their water main break work, and all their common plumbing work, they paid on time, and also acted as a broker when one of the condo owners needed a contractor for a remodel, they would always highly recommend the company they used. It led to some very lucrative work above and beyond doing the service work for the complex.


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## scottstef (Dec 15, 2005)

i do a lot of work for property management companies. you ar eright, most of them do require you to pay upfront and then bill them. that is also the way most of my service work customers behave. i simply factor that into the price and charge accordingly.


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## Driftwood (Feb 15, 2004)

*Been there dumped them*

Use to do repairs for Barns and noble. Great $$$$ Repairing private homes in the RIGHT hood $$. Move on ,They Don't deserve YOU. good luck


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## pyroracing85 (Aug 3, 2007)

crb555 said:


> There is a cost associated with money. The way I see it, you have two choices...either you quit the relationship, or raise your prices to the point where you don't mind financing them.
> 
> We do a lot of work for a relatively large contractor that routinely pays 90 - 120 days late. On the first job.. yeah, we were ticked about it... after the second job, we decided to just let them know upfront.... " we would love to do your jobs, but we are going to raise our rates unless you can pay in a timely manner." They chose to continue paying late, and we jack the profit margin on their jobs. We are both OK with this relationship, no big deal, once we know what the rules are...and these are 300k to 500k plumbing jobs.
> 
> ...


 
Wow what kind of plumbing jobs go for 300k-500k?


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## MechanicalDVR (Jun 23, 2007)

pyroracing85 said:


> Wow what kind of plumbing jobs go for 300k-500k?


The ones that you need to be a licensed contractor to even think about bidding.


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## mahlere (Aug 6, 2006)

MechanicalDVR said:


> The ones that you need to be a licensed contractor to even think about bidding.


I think I could do those projects as side jobs...nights and weekends...no problem:whistling


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## MechanicalDVR (Jun 23, 2007)

mahlere said:


> I think I could do those projects as side jobs...nights and weekends...no problem:whistling


I used to do them at night to support my coke habit, them I started buying pepsi on sale.


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## Celtic (May 23, 2007)

MechanicalDVR said:


> I used to do them at night to support my coke habit, them I started buying pepsi on sale.


Which in turn killed my side act of being a coke dealer...


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## MechanicalDVR (Jun 23, 2007)

Celtic said:


> Which in turn killed my side act of being a coke dealer...


 
Yeah that new diet pepsi max is the fix.


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## crb555 (Jun 14, 2007)

Actually, we just landed a new jail... 1.3 million on the plumbing... Also have a central energy plant in the works (negotiated) that looks like it going to be around 2 to 2.3 mil...

300k is our average "small" job.

Don't let the big number fool you though... if you break it down to net profit per day, the number all of a sudden gets much smaller.

Crb5


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## mahlere (Aug 6, 2006)

crb555 said:


> Actually, we just landed a new jail... 1.3 million on the plumbing... Also have a central energy plant in the works (negotiated) that looks like it going to be around 2 to 2.3 mil...
> 
> 300k is our average "small" job.
> 
> ...


amen to that....

the top line is like the pretty girl in school who flirts, but never puts out...

the bottom line is the girl who may or may not actually screw you..focus on her


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## MarkNoV (Apr 29, 2006)

One of the first thing they teach you in business school is how to calculate the cost of capital of the firm. The operative word is COST, and like other costs it has to be accounted for and marked up.

Eg: $2000 total cost of job, 40% ($800) of which is material which you are financing.

Your cost of capital is, if using trade credit or credit card is (assume) 20%.

$800 X 20% = $160 X markup of 40% = $224.

The $2000 job should be priced at $2,224.

If they don't want to pay it don't work for them, if you continue to then you are not a businessman, only a laborer.

Mark
,


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## WarriorWithWood (Jun 30, 2007)

mahlere said:


> the top line is like the pretty girl in school who flirts, but never puts out...
> 
> the bottom line is the girl who may or may not actually screw you..focus on her


That's a great analogy, I love it! :notworthy

You should use that as you signature.


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## mahlere (Aug 6, 2006)

WarriorWithWood said:


> That's a great analogy, I love it! :notworthy
> 
> You should use that as you signature.


it's all yours...the way i normally phrase it would get censored here...:laughing:


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