Tuesday, August 31, 2010

Terminology Tuesday - How to Hire a Contractor

(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a way to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

Video Link

This is a short video on how to hire a contractor.

Learning how to hire good people is a skill I've learned over the years through experience. In the early days, I relied mostly on referrals and for the most part - they weren't that great. I ended up spending a lot of money and a lot of time for people who were not the best and who ended up overcharging me.

Sure, there are big companies out there that do good work. But, what I've learned is that I prefer to work with the little guys. These are the folks who are on the streets, just like me, day in and day out - just working to make a living. And, I find that I prefer to deal with small, family type businesses when it comes to working with contractors.

For the most part, I only deal with contractors who specifically work on mobile homes and in parks. Since this is really a niche business, I want to know the folks I'm dealing with are familiar with mobile homes and the parks I work in.

Lately, I've been receiving many calls from contractors who have dealt with mostly single family homes. When they call, a lot of these folks tell me they know how to fix pretty much everything and mobile homes are just like single family homes. So not true. They are built differently, they are not the same.

So, how do I screen and hire contractors? Well, it's really a matter of preference. Usually, I will work with the park to see who they use for their jobs. But, I'm also sure to check around with the homeowners in the parks I work in - I have found many good and reliable contractors just by talking with the homeowners in the parks.

I always have a few contractors for each type of job lined up. And, I'm constantly interviewing and looking for contractors. I have learned not to rely on one person for everything. Things change, situations change. People change.

For example, recently I had to do a job on a furnace unit that needed to be fixed. Apparently, it had been leaking water when the a/c was turned on.

Well, I had my heating and a/c guy take a look at it. He told me in order to stop the water from leaking the coils would need to be replaced in order to stop the leaking water. He told me it just was no good anymore and that was the only way to stop the water from leaking from the unit.

So, I asked him what this was going to cost me. He quoted me $975. My jaw almost dropped to the floor, I was in shock! Just for that, I asked him if he was serious. He said "yes." I asked him again if there was any other way we could repair the problem, he told me "no."

In any case, I told him to go ahead and fax me the estimate (I always get estimates in writing) and I'd have to look it over again. After hearing this news, I just didn't feel good - I felt this was really a high price for a job like this.

Though a part of me kept saying, "You've used this guy for awhile now, he knows what he's talking about." On the other hand, another part of me was saying "You know what, you better do your research on this before you make a decision. Maybe you should check around and get a second opinion."

So, I did a bit of research on the issue. Turns out, what I researched and found was sometimes the issue could be minor - the coils may not need replacing. But, if they do the $975 figure was just average. The price ranges for this type of job ranged from $700 on the low end to $1500 on the high end. I was advised to get a second opinion. So, I did. And, I'm glad.

I talked to another heating and a/c guy who's been in the business for 10 years, fully licensed and everything. What I liked about this guy was that he was familiar with mobile homes and had done business in the park.

Moreover, he knew exactly the problem - he told me he was familiar with this problem and have seen it in many mobile homes. Thing is, he was familiar with the type of furnace unit since he's had experience in mobile homes.

Turns out, the problem was the coils. But, they didn't have to be replaced. He told me all they need is a cleaning and the pipes just need to be cleaned and unclogged. He explained to me that when the a/c is turned on if the coils are dirty and dirt is blocking the exit then water cannot escape - it gets stuck. And, when it gets stuck then it just sits there and does not go anywhere - that is the cause of the leak.

Furthermore, he told me once the coils are cleaned as well as the pipes of all the dirt and debris - then the water can evaporate and escape from the home. He told me this is just like a car, all it needs is a good maintenance and tune up.

So, I ended up using this guy and guess what? It cost me less money. Instead of $975 with the first guy, I received an estimate of $200 with the second. This is a $775 price difference just by getting a second opinion!

But, here's the kicker about the story. Turns out my original a/c and heating guy, he was no longer licensed. I checked him out in the licensing database and he was no longer listed. I remember awhile back, I had a hard time reaching him as his phone number was disconnected. I checked his license and it said "Expired." Now it turns out, he is no longer licensed.

The lesson I've learned is that I cannot always depend on one person for the job, I have to always be out there looking for folks to add to my team. Situations change, people change - things don't always remain the same.

I hope this "Terminology Tuesday" post has been helpful and has given you some useful information to use both in your business as well as your personal life - it definitely has for me.

Happy investing!

p.s. Feel free to leave comments on any post either here and/or my Facebook Page. Comments are always welcome, thanks for reading!


Julie Broad said...

Hey Rachel -
I think you made so many great points in this post!! Two I want to highlight are definitely the need to always be on the lookout to add new people to your team (you never know when you'll meet a tile guy and then suddenly need some tile work done!!) and you also should find people who specialize in what you're doing. In your case - mobile homes. Someone who is used to commercial building work may not be well suited for a small home work and vice versa. My brother is a carpenter and does a lot of things exceptionally well - but he doesn't lay carpet or linoleum. If you're looking for someone to be good at everything that might be tough - so find someone that is excellent at a couple of things and then find someone else for the other things.

Mobile Home Gurl said...

Thanks Julie, glad you liked it!

I agree about always being on the lookout for new team members. This whole working with contractors area is an area I used to really be lacking in.

Though, I found that as I talked and interviewed with more contractors I found myself learning more and more. What I've learned is that there can be several different opinions and approaches to different types of jobs and situation. But, it's up to me to see what is the best and most cost effective approach to handle each situation. The contractors will tell me what is wrong and their recommendation but it's up to me to make the decision.

In the past, I've been hasty about making decisions and going with the first contractor only finding afterwards there was a better and more cost effective approach. It definitely has been a learning experience!

And, yes - I prefer contractors who specialize in mobile homes. Through experience, I've found the ones that specialize in a specific property type are more knowledgeable about their area of specialization. They've seen the same things happen over and over again.

I guess it's just like me going out and specializing in mobile homes. After awhile, I kind of know what issues mostly come up in these types of homes being familiar with this property type and all. If I were to start looking at apt buildings, it could be a whole different story!!

And you're right, I do like to work with folks who are good at one thing or a couple of of things. Those who say they are good at everything, I don't really pursue as it's hard to be good at everything.

Thanks for the note and for stopping by! :)

Hillary Blundell said...

I echo Julie's comment, that there are lots of great points to ponder as far as choosing the right contractor is concerned. These also go for any home project that requires hiring of contractors. My recent was with one of Indianapolis' heating and cooling companies.

Well just a few weeks ago here at our home in Indianapolis, duct cleaning and HVAC maintenance were in full swing. After careful consideration and enough research, we were able to get the work done, thanks to the contractor that we got.