Use Credit Cards for Deposits on Building Materials!
From: Brendan
Carl, in your book you say “never pay for work or materials in advance”. But this seems like quite an extreme absolute.
I'm sure there are numerous sub-contracting jobs who do work with no money down and 100% upon completion. But I work at a cabinet shop and there's no way we'd do a $10K-$50K+ job for a kitchen or full house with no money down.
The money is used to buy the materials (even if we do have credit with our suppliers) and pay for the planning, designing, and beginning labor. There probably are cabinet shops out there that don't take money down, but I don't know any.
And I also I don't understand what you say about the GC buying materials. Does that mean that as a GC you'd buy a bunch of concrete and whatever other materials are needed and have them on site and hire a concrete guy and say "Hey, here's your stuff, go to work."?
I don't mean to sound too combative, I haven't been a GC before, but I do not quite understand this.
Hi Brendan
Making a deposit on custom made cabinets is not quite the same as paying a subcontractor to come and do your job. Still, cabinet shops have gone out of business and left the builder (GC) holding the “bag” for the deposit. Even large chain stores go out of business.
If you remember Color Tile, Inc of not too long ago, they went out of business with hundreds of stores and all the customer deposits went bye-bye, except mine & all those who had made their deposits with a credit card.
Visa & MC both will protect your deposit. That's the only way I will do a deposit for a special order, anywhere!
And yes, I do pay for every drop of concrete that goes to my jobs. My subs call my supplier (from their cell phones) when they want delivery. This is not rocket science, but these are things that were learned the hard way.
Carl
Carl, in your book you say “never pay for work or materials in advance”. But this seems like quite an extreme absolute.
I'm sure there are numerous sub-contracting jobs who do work with no money down and 100% upon completion. But I work at a cabinet shop and there's no way we'd do a $10K-$50K+ job for a kitchen or full house with no money down.
The money is used to buy the materials (even if we do have credit with our suppliers) and pay for the planning, designing, and beginning labor. There probably are cabinet shops out there that don't take money down, but I don't know any.
And I also I don't understand what you say about the GC buying materials. Does that mean that as a GC you'd buy a bunch of concrete and whatever other materials are needed and have them on site and hire a concrete guy and say "Hey, here's your stuff, go to work."?
I don't mean to sound too combative, I haven't been a GC before, but I do not quite understand this.
Hi Brendan
Making a deposit on custom made cabinets is not quite the same as paying a subcontractor to come and do your job. Still, cabinet shops have gone out of business and left the builder (GC) holding the “bag” for the deposit. Even large chain stores go out of business.
If you remember Color Tile, Inc of not too long ago, they went out of business with hundreds of stores and all the customer deposits went bye-bye, except mine & all those who had made their deposits with a credit card.
Visa & MC both will protect your deposit. That's the only way I will do a deposit for a special order, anywhere!
And yes, I do pay for every drop of concrete that goes to my jobs. My subs call my supplier (from their cell phones) when they want delivery. This is not rocket science, but these are things that were learned the hard way.
Carl
