# GC's running jobs and not swinging a hammer?



## Sparky Joe (Apr 29, 2006)

Boy, it's a wonder subs make any money at all. I wonder what is sacrificed, quality or money in your pocket, when you get that spread out to do everything your self.

It only makes sense to sub out plumbing, electrical and HVAC, there's way too much to know in those three fields to think you could do it well by yourself.

The generals I've seen, get the jobs, have their subs bid, tack on 10%, make a killing, and do nothing but stand back and watch.


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## dirt diggler (May 14, 2006)

Chicagolawn, or Joe I should say

of the IC's that you created, how did you set them up (to be factually consistent under the IRS? Did you get them a business license?? I've done 1099 work for others before ... but was never treated as a sub (not that I cared really)

reason im asking is b/c I'd love to utilize that model. I think it seperates the workhorses from the clockwatchers. Nothing's perfect, but a) you can save money and b) get more production from someone who is not watching a clock.

Care to share some wisdom??


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## Romex-Racer (Jun 9, 2005)

I've worked for hundreds of GCs and I honestly have no idea what they do. They've somehow insinuated themselves between the customer and the subs who actually do the work. Then they take credit for a job well done!

I have a couple of good GCs I've worked with for a while, but 95% of them add zero value to the job. 20% of the GCs I work with will abandon the job and 85% will be bankrupt in 18 months. 50% have substance abuse problems and 25% are functionally iliterate.

All the GC brings to the table is he knows the phone numbers of the subs. GCs always want free work and are quick to hire unlicensed, bootleg subs to save a buck.

99% of GCs have no idea of construction scheduling, not a clue as to what sequence the trades must appear in. Even homeowners know that the plumber must install the disposal before I can wire it but this is a mystery to most general contractors.

It wasn't always this way. 30 years ago general contractors were professional businessmen. These days they're just high school drop outs with no impulse control. A general contractor handles a lot of money, sometimes they'll take that $40,000 draw and blow it on a Corvette only later to realize that they have $30,000 of bills coming due....

Only 25% of general contractors actually know their cost of doing business. 75% of GCs don't even charge enough to break even, this utter financial stupidity results in their indignation and outrage when I must charge for extra work. I always give the GC a written work order to sign before I do the extra work they've asked me to, but when I give them a break, they still can't reconcile my "high" prices.

I've seen a million cocksure, wiseass GCs come and go. I meet a new GC about every 10 days, I really don't even bother to learn their names anymore. In the residential remodel and new construction market, the attrition rate is high and I seldom do more than 2 jobs for a GC before get tired of his shenanigans and move on to the next GC. It's impossible for GCs to keep good subs like me, they must be constantly moving, like a shark, always looking for new subs.

The other day I and my crew was wiring a kitchen and the plans indicated 2 dishwashers (this was a nice, luxury kitchen), I bid two dishwashers but I needed some info from the GC, for some reason he happened to be on the job, so I asked my question and he was totally surprised that there were two dishwashers! He obviously never looked at the plans before bidding the job.

The idea that GCs have a lot of responsibility is nonsense. That's like saying the little dog on the hood of the Mack truck carries all the responsibilty for the trip. The subs are liable for the work they do and the GC spends all his time trying to shift his responsibilities to other people, always blaming others for his oversights and lack of supervision.

General contractors are responsible for the public's distrust of contractors in general. As a speciality contractor, I have to overcome this distrust when dealing directly with customers.

I've tried to recommend this fine forum to GCs I meet but the vast majority of GCs are just now embracing Fax machines, they think ContractorTalk.com is a file burned onto an AOL CD.

Nope, the construction industry aint what it used to be...


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## Melissa (Feb 23, 2006)

Romex, I don't know what part of L.A. you are in, but it seems really different then the part of L.A. that I am in. No offense, but your posts are always so negative. It can't really be this bad. Can it? 

And come one. Do you really not know what GC's do? You think they have no worth whatsoever? I guess the HO should just find all their own subs, check all their insurances, schedule the job themselves, etc, etc, and so on, and then some.............. ????


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## DaveH (Jun 2, 2006)

I have worked for some really bad GC's over the years, but it is the GC's who brought me to the job in the first place. All subs have the option of working for the owners only if they choose. It makes it a lot tougher in most cases...I will weed out lots of them over time for all the factors you related in your post Romex. Once you find some good one's though it is a pleasure to do work for them:thumbsup:


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## Romex-Racer (Jun 9, 2005)

Yeah Melissa, I realize I've made a lot of negative posts, I'm gonna have to cheer up a little, it's just that this is my pet peeve. I work all over Los Angeles, I'm based in Santa Clarita.

When I do commercial work I seem to work with a higher class of GC. But let's face it, residential remodel is the bottom of the barrel as far as work is concerned. There's too many GCs who don't know what they're doing and they drive down prices as a result.

As you move up the food chain and get into luxury homes and commercial TI work, the quality of GCs really improve.

By the way, only 1 in 50 general contractors has asked for proof of my liability insurance. Most GCs, at least in the residential market are really just glorified framers.


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## Grumpy (Oct 8, 2003)

This year I have done work for a few guys who really knw nothing about construction but knew how to buy a house for cheap and borrow a large sum of money. Infact 2 of them had degrees in finance. How do I know, because one made it a point to tell me at every opportunity, even as I was teaching him how to read a tape measure. Almost all of these jobs turned into a huge cluster F of problems. 

A gc not asking for insurance probably means he's not insured himself or hasn't been in business past his first audit. What an eye opener that's going to be!


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## Romex-Racer (Jun 9, 2005)

I sometimes for for homeowners who work direct with the subs and have not hired a GC. They ask the subs for advice and the subs are very helpful. These jobs progress very smoothly and are a pleasure to work on.

But the original topic was about "paper contractors". This term used to be a perjorative, an insult. But in reality a "paper contractor" is more of a construction manager or consultant.

The only problem with subbing out every trade is that there is less room for profit. On the other hand, lower overhead and infrastructure investment means it's easier to handle more jobs at once, you can expand and contract your business dynamically to adjust to current workload.

The opposite end of the spectrum is the GC that does little or no subbing at all. Some GCs have electricians and plumbers and other tradesmen in their employ, these GCs also are licensed in various trades and have more control over their projects. I know of a builder of tract homes that does not sub out anything. From the foundation to the roof, everything is done in house.

There is no shortage of valid business models, it's just a matter of finding a business model that suits your unique needs and goals.


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## ChicagoLawn (Mar 22, 2006)

Dirt diggler,

The independant contractors that have been established with my assistance are incorporated (s-corp's), fully insured (Workers comp, Gen. liability, auto, etc.), own their own equipment, hire their own labor(if needed) and of course are free to work for whoever they please.

The people that "stepped up" to take the opportunity of being in business for themselves were never forced. Many people that I had talked to over the years did not want the additional responsibility or "risk" of being in business for themselves. But today, those same employed people remain in a hourly job and constantly complain about how bad their future and money situation is. 

Again, my mindset is that I wish to do a few services to the best of my ability. Other likeminded specialists(independant business owners) have teamed up with me to build their business by dedicating themselves to their own niche work(different than mine) that becomes available within my systems.
I realize that several people on this forum have lost faith in the "general contracting idea". If you really think about it, we can all be considered a sub-contractor and our customer is the general contractor. We have a choice to work for any customer(contractor)we wish..... right? 

What do you think?

Joe


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## Teetorbilt (Feb 12, 2004)

My bro-in-law is a GC. He builds medical facilities all over the southern end of FL and has many going simultainiously, does he need a tool belt?

Not according to my sister (a fair hand with tools in her own right).


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## keg (Jul 7, 2006)

*reply to what gc's do...*

I tell my subcontractor clients all day long that they willl make the most money when they are able to swing the 9 iron with the gc's looking to negotiate the work with them, instead of swinging the hammer ! Am I wrong, you don't want to wake up like Danny Glover in Lethal Weapon one of there days saying " I'm gettin' too old for this ****... " do you ?


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## keg (Jul 7, 2006)

romex, I agree w/ Melissa, you are quite negative, there must be an issue there... no offense you.


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## keg (Jul 7, 2006)

qualify your gc's better is my only advice, there are far too many projects for anything less in my humble opinion.


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## keg (Jul 7, 2006)

I have read your posts for a while now grumpy, and I like your style and appreciate most of what you have to say, particularly as the layman that I am !


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## Melissa (Feb 23, 2006)

Romex-Racer said:


> Yeah Melissa, I realize I've made a lot of negative posts, I'm gonna have to cheer up a little


:laughing: Glad you can admit it! Give me a few more years in the biz down here and I might be the same way, but I hope not! BTW Santa Clarita is beautiful from what I hear. I've never been, but we have a friend that does a lot of work in Agua Dulce, and he rants and raves about how great it is that we even looked into moving up there last year.


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## Grumpy (Oct 8, 2003)

Somewhere along the line General Contractor is a term that has been reserved for Builders only. I think a builder is only one type of GC, and there are many types.


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## dirt diggler (May 14, 2006)

ChicagoLawn said:


> If you really think about it, we can all be considered a sub-contractor and our customer is the general contractor. We have a choice to work for any customer(contractor)we wish..... right?
> 
> What do you think?
> 
> Joe



I think that is entirely accurate. 

I like that model too That's about as legitimate as it gets and pretty much eliminates any "grey areas." You can sleep at night workin like that!!

I don't even think the monetary savings is what makes it golden either --- it's the fact that the people you have are go-getters (as opposed to clockwatchers). Awesome!!


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## kid creole (Jul 11, 2006)

great forum!
great thread too! i'm currently in bus.to build custom homes in Charlotte N.C.. currently studying for the residential G.C. exam here(any advice or insight on this subject would be appreciated ).

i come from an industrial construction background(boilerdog,high priced laborer) and just recently left a failed (Katrina remodeling)construction business back home in n.o.la..

any way i NEVER repeat never want to be viewed as the fat ass TEETORBUILT described. and would like any input from ROMEX what not be as G.C.? not a drugy, a moron or FEMA rich (in regards to corvette purchase). i am a very physical person with very little ego and would not mind clean-up detail or anything else to make the job run smoothly.
is this naive?
looking forward to interacting with all of you.


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## Sparky Joe (Apr 29, 2006)

Grumpy said:


> Somewhere along the line General Contractor is a term that has been reserved for Builders only. I think a builder is only one type of GC, and there are many types.


I was thinking about the word 'contractor' a little too. 'con' of course is mexican for 'with'(mexican also being latin based) then you have tractor, so I guess any of you who don't have a tractor are all just 'cons' :jester:


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## Zatol (Dec 4, 2005)

I am a general contractor currently on vacation...I do not swing a hammer... I have made as much money while on vacation as I would have if I'd stayed working... 

Those of you who want to swing hammers...go for it :thumbsup: 

I think I'll just keep pushing pencils..


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