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Well, when I started up, I didn't have a contract, you know? I don't think anybody really has a contract when they start out. So let me. Let me back up. We the business that we're in is called, you know, whether you're in remodeling or construction, most of us are called contractor right or general contractor right. And everybody starts off at the same place with just like an idea of getting things done.

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But, you know, I when I got started, I didn't think contractor was a bad word or bad human being or, or a disgraced company or industry or any of that. I was like, I'm proud to be a contractor. I know what I want to do. I'm going to live by my rules, and I'm going to, you know, do this.

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And so but I didn't understand why everybody else hated contractors. Welcome to the Builder Hacks podcast, your go to destination for cutting edge strategies, time tested systems, and invaluable insights to revolutionize your construction business and elevate your life. Join your host, Nate Piper and Keith Meals, seasoned contractors who are not just in the trenches but are also pioneering the future of the industry through Concord University.

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In each episode, we dive deep into the minds of the industry's most accomplished building professionals, uncovering their secrets to success, and sharing actionable tips to help you thrive. Whether you're a seasoned veteran or just starting out, our goal is to empower you to build a brighter future for yourself and for America. Tune in. Level up and let's build a better tomorrow together.

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This is the Builder Hacks podcast to build your future. Building America.

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And this week we wanted to get into a topic that for every contractor, every trade professional, so is a huge piece of what you've got going on, whether you realize it or not. And sometimes you don't realize it until you're in the middle of a challenge and you're like, I wish I would have. And that's really what I want to kind of get into today.

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So this is going to be something that's for a new contractor. Or if you're an expert contractor, there's going to be some pieces in this that you're going to take away. You want to add to what you're doing. So you definitely want to make sure you pay attention on this one. So we're going to be talking. The most important thing to setting structure and any kind of project you're doing the contract.

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So Nate so whenever you got started out what did you what did you start out with as a contract. Did you have the same contract you've got now or was it markedly different? Oh, it was extremely different, you know. Well, when I started out I didn't have a contract, you know. I don't think anybody really has a contract when they start out.

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So let me let me back up. We the business that we're in is called, you know, whether you're in remodeling or construction, most of us are called contractor, right? Or general contractor. Right. And everybody starts off at the same place with just like an idea of getting things done. But, you know, I when I got started, I didn't think contractor was a bad word or bad human being or, or a disgraced company or industry or any of that.

00:03:12:17 - 00:03:32:07

I was like, I'm proud to be a contractor. I know what I'm going to do. I'm going to live by my rules and I'm going to, you know, do this. And so but I didn't understand why everybody else hated contractors until a few years in. And that's the other story. We'll get to that. So but when I got started, I didn't I didn't have a contract.

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I had a handshake and I had my word, and I knew that's what I was going to stand by. And everybody else stands by that until your word and their ears say something different. And then in that moment, you got you got a problem because you got to spend too much money or they're going to not be happy with things.

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And that's where problems kind of live, because you're not being clear about it. So it's kind of work. That's one of the biggest keys right there that you're talking about. So is that you know what what you say and what the homeowner hears so often. And you'd be surprised at how different that can be. And it's like, because there's been so many times where I've come back and I'm like, you know, and a lot of times I'll have, you know, either the designer with me, my cabinet person, my project coordinator.

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So one of my other project managers might happen to be around whenever we're doing this. And we they come back, the homeowner comes back later on and says, oh no, this is what we talked about. I'm literally like, it's like a Scooby Doo moment, So because you realized, hey, where did that come from? And it's like, I know that wasn't all that.

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And there's like, there's certain things. I'm sure you're the same way. There's certain conversations that you have with every homeowner and certain certain processes you've got that you only do it one way and you're shot whenever they bring up something else. Sounds like there's no way that it will ever come out of my mouth. So and that's where the challenge comes in.

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When you don't have that contract, because there's nothing to go back to that says this is what's going to happen, and that's what it gets. That's what's gotten so many contractors, I mean, including myself. And I know probably eight. So got us all in trouble at some point because that communication is not clear. So and understood. And I think that's the main thing understood among all parties.

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Well, the hard part is, is vocabulary, right. Because when we're talking, we're speaking in a language that that we understand or thinking everybody else understands the exact same language working construction is. Yes. Yeah, I was speaking construction is from, you know, Taiwan or something. You know, it's like it's like this weird, thing and it's like, you know, we say drywall, somebody says, wall, wallboard.

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Somebody else says, you know, oh, the plaster on the wall. Right. They all mean something different. And we're talking in, you know, different languages and it makes it really hard. And then this happens on every project to whoever's getting the word and, and then goes and recruits their family and friends to have an input. And then that input that says, oh well that guy is doing it wrong.

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And this happened over here. This is what you need to do and this and this and this and this. And then everybody's in involved in the conversation. So vocabulary is wrong. And then you have outside input. And so those in the outside and the outside input that you're talking about Nate unfortunately and this is this is like anytime someone tells me that they've got a friend coming over to look at it, I immediately start asking questions about the friend's experience.

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Because if this is someone who's in the industry, they may have enough knowledge to be able to to go ahead and give an opinion that actually carries weight. So the challenge is like you were talking about Nate. They bring the neighbor in, they bring their their family member. So who had a renovation but knows nothing about the industry at all.

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So you've got the person who has no experience going ahead and guiding the person who this may be their first renovation they're going through. So you have two people that don't know enough about it to truly have an informed. And that's not only gets homeowners. You don't know what you don't know. There's I mean, hey, whenever I go to the doctor, I don't know what the doctor knows.

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Whenever you're going ahead and looking at what I'm looking at. So I've got to take them as the expert. So it's the same way whenever you're in construction. Unfortunately, too many homeowners feel that because they live in a house, they know what it's supposed to be and how it's supposed together go together and what the process is and everything about the industry.

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And that happens frequently. Well, it's one of those things. It's like the outside information, you know, when people are making decisions, they, you know, it's a it's important for them to recruit other people to be able to help them in these because, right, doing a project, you're you're making a lot of choices and decisions a lot what I, what I've kind of come back to realize and this is much later on many projects and many, many, many mess up that I had to be correct that whenever I hear that they're getting somebody else's opinion, be like, let's all have a meeting and I'll be there.

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What time is that meeting? I want to have to readjust my schedule because, you know, you get to a point where you're not involved in the conversation and they're saying things that don't line up, and you have a reason or a process that you're going through, but you never get to explain that piece because somebody else has a different opinion about a different project, about a different thing.

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And the one thing I found out is that it doesn't matter if I've done the same bathroom with the same layout, with the same, you know, materials, there's always going to be something that's wrong or different with each one, and I have to make adjustments. There. No projects the same. No, no. And so it took me many years to figure out, oh, hey, number one, I need a contract.

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Be number two, I need one that that's beneficial for both of us. and no longer than one paragraph. And, so that was never. You mean the one page contract doesn't work? Now, whenever you're doing a renovation on a home? I had a buddy of mine who had a one page contract. It's, it's got everything and everything.

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And I was like, yeah, let me let me see it. And the front page was like, nice big print. And it, you know, outline like two items and you flip it over on the back and then you got to get a magnifying glass because it's so fine print. And they said every word. They skipped punctuation. That's like, well that's not fair, you know.

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Yeah. those and those are the types of things. And that's where like whenever I started out, like Nate said, he didn't have a contract. I actually had a contract, but it was only about a page, maybe two, depending on what all was going on on the job now. And it's one of the the pieces that definitely you learn over time.

00:09:26:13 - 00:09:38:12

It's like I always just look at people's stuff and I'm like, you have like a 12 page contract, why is it 12 pages long? That's crazy. So you can go ahead and lay out the project and, you know, and a few paragraphs and a lot of cases, sometimes a little bit more depending on the size of the project.

00:09:38:14 - 00:09:55:06

But I'm like, it's doesn't need to be that long. And then you get into it. And that whole part that we're talking about for communication. One of the feedback that we get now, though, is how detailed we are and what we actually put in our contracts. Like we I line them up every phase and what's going to be done in that phase.

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You know what the expectations are literally it's all in there. And that's one of the reasons why our contracts have gotten the length they are. And that's also one of the reasons why my homeowners are happier overall, because everything's been explained. They know what to expect. They know where there's questions. they know where there's allowances. So in the contract, if they're for finishes like, you know, flooring or for tile in the bathrooms and stuff like that, cabinets, they've got an allowance and it's it's spelled out upfront.

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It's not the mystery of, oh, well, let's keep making and we're going to have to get up. Charge on this. Hey, if this is what we spend. So this is what I've got in here. If you go above it you pay extra. If not, I go ahead and refund you the rest of it, you know. But that's that comes with time.

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And the more you convey to your homeowners, so definitely the better the result is going to be in their minds. And that's where the key is. I mean, you may deliver the same exact thing whether you've got that contract written out specifically or whether you just go ahead and whether you go ahead and actually just do a one page contract, you know what you're doing.

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And that's the challenges when we as contractors or as anyone in any industry, does what they do, you know exactly what the process is, or you should or you should be doing it. and that's, that's the key. Even if you know what it is, they don't know what it is and they're operating. Think of those times where you go into something like I always think of for me, when I go to get my car worked on, it's like I've got this much knowledge about cars.

00:11:14:20 - 00:11:30:24

Well, and unfortunately it's enough to make me dangerous, but not enough to go ahead. And typically help me out whenever there's a challenge in the situation and whenever I go in there. There's so many times where I feel like, and if you've ever experienced this before, I feel like I'm getting taken advantage of at times because of the fact that it's like, I don't know what I don't know exactly.

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And that's what homeowners feel with us a lot of times is they don't know what they don't know. Well. And part of this, too, is that we probably didn't do a podcast on this is like, how do you choose the right contract, right or the right, you know, company to come in and do the service or the work that's needed?

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Now I've just got a free download PDF on that for all of the homeowners when they come to my website. Well, you know, it's like this should be that should be a podcast. So we should give out everybody. But I mean, that's kind of where the thing kind of starts, right? It's like most of the time when when someone young is getting started in the business and they're taking on a, on a piece.

00:12:05:28 - 00:12:23:27

Right. few podcasts ago, we talked about, you know, some young men, one of them want to come and do a, a grill cleaning business. you know, and I didn't have this conversation with them. I wish I did, and I probably will call him after this podcast. And set up a meeting with him to kind of walk him through that.

00:12:23:27 - 00:13:00:23

But, what is his contract going to look like? And how does he get it? Because he's cold calling these people. These are people that he knows, right? These are these are people that he doesn't know. And he needs to set some, some parameters around his services that he needs to be able to be clear about how he's going to clean things, and where is he going to do the cleaning, because what his contract should line out, it's like he needs a place where, some place on their property where he can actually clean the grill, because if that's not specified, then he might just be cleaning it on the patio and all the charcoal

00:13:00:23 - 00:13:26:15

and all the grease and all that stuff is going to land on the concrete, and then that's going to cause a bigger or even worse on pavers, if they have pavers or pavers or even on their even on their grass or their shrubs or their plants or windows, I mean, so having that in a contract and being able to be upfront with like, okay, you need to designate a space for me to be able to clean your grill on your property.

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Right. needs to be a part of the contract. But I'm sure him, like most of them, are going to start off with people that they know friends and family, right? And shake deals. We'll do it for $100. and they get in and, you know, for, for the most part, that's an okay place to start because you're getting in and you have to make some money, but then you have to transition over pretty quickly.

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And and starting out, you don't need a 12 or 13 page contract. You need to seek, you need a document that outlines what you're doing, right? Or how much and how long it's going to take. And you write that out. You can go and find a million places to get a downloaded copy of of a generic contract to start there.

00:14:12:23 - 00:14:36:11

But you have to start somewhere. And then as you start to make money and your projects get bigger, you hire an attorney, you don't go to your family or in-laws or unless not unless they are a business attorney. and then you hire them and I tell you, pay your attorneys, even if they're family because they're family, you know?

00:14:36:11 - 00:14:55:24

Exactly. Even if you give them $5, give them $5, but you want to get an attorney to draft up what you're doing, and you want to have it lined out so it makes sense for you. I got to a point where I didn't have one. It was all handshake deals. Then I moved it into a one pager and then a three pager and then an eight pager.

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And now why do I keep getting longer and eight? Well, you keep learning lessons along the way of what's been missed. And the other one, but, you know, I've also got mine set up. So we used three different types of contracts. and it's really based upon my liability. Right. What is what is my exposure? And, and so if we're doing a, a project and it's less than $5,000, we're still using a one pager for that, because my liability in that piece is pretty low, is pretty low and pretty limited.

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And, you know, I'm just getting to a point where it's like, okay, let's cover the basics. Let's make sure that everybody knows what's going on for this piece. A $5,000 contract. We're in and out probably 2 to 3 days at max. And we're moving on down the road now. Our remodel projects are big ones. we've got a 13 page contract, kind of like how Keith does.

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And it goes through everything, like, where bathrooms are going to be set up. Are we going to bring in porta potties? are we going to have power? Are we going to, like you go through all the things that you're not thinking of in the beginning? You start learning these lessons as you go on and like you and like you were talking about things like, for me, one of the big things I look at when you're doing remodels and stuff like that, where are we storing our materials at exactly what we have to have a designated area.

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Because and here's one of the challenges if you don't do that. And this had hit me before. So it's like, oh, well, they cleaned out their house and put everything in their garage. All right. Where am I putting everything out now whenever I bring it into the house. So I specifically state and not just in the contract. We go over it before they start moving everything around to make sure that already.

00:16:40:03 - 00:16:53:09

Is this going to be is this spot going to work for you, or are you planning on putting things in here? And if that's the case, where is our spot that we're able to bring in? I typically tell them, I need a room. I need something that's typically going to be at, you know, I'd say ten by 12, 12 by 12 or bigger.

00:16:53:12 - 00:17:18:19

So to be able to houses because we're gonna have different phases of material coming in. And sometimes those phases overlap and you need to have space to be able to handle it all. Yeah. I mean that's what that's what the contract is supposed to do. It's supposed to outline everything. And I always find it funny, though, how many guys just want to just have something and throw it in front of them, and they never read them and they don't.

00:17:18:21 - 00:17:31:17

They don't know what's in it. They don't know. You know, it's one of the things that when we start onboarding people the first, one of the first things we do in the first week is we bring out our contracts, and then we let them read them, and we don't tell them what's in them. We just say, okay, what are your questions?

00:17:31:17 - 00:17:53:11

What what did you miss? What is it? Because what we want is that we want them to be able to fully digest the information and the severity so that when they're getting questions on these contracts, they know exactly what's in them. But it's just to say it's just the standard operating of like, how do we do business? And for us, I mean, like a lot of things that we go ahead and include in there too.

00:17:53:13 - 00:18:09:00

So we've got a percentage that we do for our standard, but everything we do is cost plus. So for my company and there's a standard percentage that we go ahead and put in on the plus side of it. So and there's another clause in our contracts that if they make a change during the process, there's two things that are in there for us.

00:18:09:00 - 00:18:29:27

And we put them in overtime for reasons of course, anything else that we put in there is a change order fee, which means if they want us to price something out, so they pay us $250 just for pricing it out. If they accept the change order, then that 250 gets applied to the price of the change order. So I mean, a what it's made up for is we had homeowners that used to run us ragged.

00:18:29:27 - 00:18:47:04

Hey, can you prices up? Hey can you prices are. Hey, can you all of a sudden you've priced out 14 different changes in their home and they didn't accept any of them either. Does is burn my time. It burns my my subcontractors. Time for getting the pricing out of them. It burns my office on people's time, my project coordinator's time to go ahead and put all this stuff together and get it back out the door.

00:18:47:10 - 00:19:02:01

So you've got to go ahead and put the brakes on. Now, there are times and I'll tell people this, you can have it in your contract with that fee. I don't necessarily charge it. If they ask every once in a while for that, I don't worry about it. It's the ones who start rapid firing me with changes. That's whenever that piece gets brought up.

00:19:02:01 - 00:19:20:24

So and I usually bring it up on the first one and I'll do it on the first one, just so they've seen it happen or so. But if they don't do it frequently then I don't worry about it. Well, it's kind of one of those things. It's like this is setting the stage or the rules or the parameters or the field in which you guys are going to operate in, and it makes it.

00:19:20:24 - 00:19:48:27

So, the communications on the front end, you can give leniency. You don't have to pull out the flag on every foul. But if things start tipping in one direction or the other, there's some guide rules there. And, I think that's part of the, the important part of having a contract is that without the guidelines, without the guide rails, you're really left up to the he say she say they say world.

00:19:48:29 - 00:20:11:03

And then you know, I've been I've been in numerous legal situations based around this stuff. And I think this because I have been in those legal situations that I kind of to understand more. So what happens in the legal situation when you're referring to that night? Well, you know, I've been in on both sides. I've been on, on the planning side, I've been on the defendant's side.

00:20:11:10 - 00:20:41:15

I've actually been witnesses and expert witnesses for a bunch of times. And it's the clarity that you have to have inside the contract, because if you end up in a courtroom situation, the only person that wins. Well, there's two the lawyers or the expert witness. That's it? Yeah. The lawyer always wins. That's again. But he is the biggest thing I would say as an expert witness, I was some pretty big, so it was myself for my time to sit there and wait for them to argue, but they wouldn't be arguing as much.

00:20:41:16 - 00:20:58:27

If you've already written out and thought about your process all the way through. And I think that's the big takeaway. It's like you really don't know what you don't know in the beginning. So as you know, you know, I had one more thing that I didn't ask for that change order piece before we get past that. And I totally forgot about it because I know how my mind is.

00:20:59:00 - 00:21:13:07

So for that change order piece outside having a change order fee on the front end. So our, our percentage that we charge on change orders is higher. So it's actually about double what our normal percentages. So if you did it in the front end of the piece because and this is and people are like well that's crazy.

00:21:13:07 - 00:21:30:10

And I used to think the same thing. I used to refer people and their change order percentages or change order amounts were a lot higher. And I'm like, why is it so much higher? The thing that you don't think about in this, especially if you're starting out. So, and some of you have been in the industry, this may be a big, big light bulb that goes off for you whenever you go ahead and do this.

00:21:30:10 - 00:21:49:17

When you do a change order in the process, number one, it's going to slow down because typically they're asking right as you're getting ready to do a phase, which means either you've got to pause the phase so long enough to get them pricing and then them to sign off on it, which, as all of us know, once you've got a flow going on a project, the train keeps moving really well until you slam the brakes on.

00:21:49:23 - 00:22:04:14

And then it takes just like any train, it takes a lot of energy to go ahead and get that train moving forward. Again, what you're going to lose is a boatload of time, energy and momentum towards what I actually look at it as. And that's part of what's in there too. And then there's times where they may take too long to decide.

00:22:04:14 - 00:22:21:21

And I wasn't able to hold off what I was doing. And now we're going to have to backtrack and do some additional work that's going to cost a little bit more. So I can either go ahead and absorb that little bit of extra figuring that's going to happen. So or so we go ahead and add on to that change order, which is what you should do if you know it's going to take them a long time.

00:22:21:27 - 00:22:38:24

So but having that extra in there, the other part of catches is mistakes. Because anytime you change the process like we've got a color I, I'm a color sheets that go out to our job sites. So whenever we start our project, well, every time there's a change order, we've got to make changes to the color sheets, which means somebody in the process may not get the information correctly.

00:22:39:01 - 00:22:54:27

It's out there for them to refer to on the job site, but if they miss it and they do something wrong, and then someone the homeowner already signed off on a change order about it, then I've got to go ahead and pay to have it done right again. So was what it comes down to, and that's part of the reason why you go and put that extra in there, because there are times where we've had to go ahead and paid.

00:22:54:27 - 00:23:17:07

Ever done essentially a second time because it wasn't done right the first time because of a change order. So you just risk more mistakes is what happens. Yeah. You know, I think your change order process is an extremely good one. You know, but this comes with like refining your, your contract, your way of doing things so that you're being more efficient and you're not losing more profit.

00:23:17:10 - 00:23:43:29

I think that's the whole goal too, is like it. It works as a protection, works as, like a guideline. It works as you know, guard well, guard rails, I mean, there's a lot of things that are that are good about contracts. I think a lot of people are scared of contracts, too. just because either a there's too many words or or they don't understand the words because it's written, it's like if you've got the attorney right and it's written in legalese, that's what it comes down to.

00:23:44:03 - 00:23:58:20

And if you do that, have your like if you don't understand it and they give you the contract back, make them explain what it means. I've literally had my guys go back and rewrite stuff. I said, make it so that an average eight year old can understand what the hell you wrote. I don't I know why you write this stuff.

00:23:58:23 - 00:24:12:03

Yeah, because then we have to come back to you and we've got to go ahead and do anything because no one understands what the hell it actually meant. The challenges. If my homeowners understand it, I don't understand, and I'm unable to explain it to them. Well, how is that helping me out in any way, shape or form or my home, or out in any way shape?

00:24:12:05 - 00:24:30:17

It does. It just makes it more confusing and gives a bigger, bigger step. But that's why I like to pay attorneys regardless. I don't want to take somebody's free, contract. You know, I I've given away contracts. I'm good with my contract. Yeah. And, that's fine. But everybody needs to understand and read their own and and line it up.

00:24:30:19 - 00:24:50:21

I didn't like reading. I wasn't a big reader. And in high school and through college, that wasn't my forte. But I got into business and I started reading, contracts and contract negotiations and, you know, bids and things of that nature. And, I fell in love with reading that kind of stuff because then it started to make sense.

00:24:50:21 - 00:25:09:03

And put it in the right and a perspective. There's a purpose behind it. Well, especially after you get you come up negative on a few jobs and and you wonder why. And then you're like, oh yeah, I should have done this. Oh yeah, I should put this. And oh yeah, this is what needs go there. you know, but I think everybody has to go through that process.

00:25:09:03 - 00:25:30:27

Right. And that's what helps you kind of refine and kind of get better at doing the job. you know, we've had it in quite a few things. One of them is, no slandering, you know, so, we've had we've had some people that we did a great job for them. They loved it. But for whatever reason, they didn't like one of our project managers.

00:25:30:27 - 00:25:47:06

So they went on social media and just ripped our project manager for no reason. Even though they loved the project, they just didn't connect with this one guy. I was like, okay, well, that's a lesson learned. Let's put that in the contract. You know? And that's that's the reason why contracts get as long as they are, because you have that.

00:25:47:06 - 00:26:02:24

And like I've added in recently on mine, I typically I'm, I do big stuff on social media. I have all kinds of stuff going on social media. I do videos, pictures, everything that goes up all the time. I record stuff for my website, for fitness results and things like that. So and you always want to have that ability to be able to do that.

00:26:02:24 - 00:26:19:23

And I had a homeowner the one time who came back at me and she's like, oh, I can't have you go ahead and record any of this stuff. You didn't ask me about doing that. You didn't have permission to go ahead and do any of that. Well, now there's a photo release in the middle of my contract so that they get to go ahead and sign off on also allowing us to go ahead and take pictures, shoot videos.

00:26:19:28 - 00:26:40:08

So acknowledge the fact that we are going to have it out there. We are allowed. These are for marketing purposes though. This is their express written consent. Yeah another a good one. Yeah we got that one. And yeah this is all kinds of things that you can put into it. I know like for us because we do so many kitchens and bathrooms and things like that.

00:26:40:08 - 00:26:57:29

And I know you, you guys, you guys just 20, 20 don't you, for your cabinet stuff. So that's one of the things I like. We actually when we have son send the contract over, we have attachments to the contract when we send it over that are referenced in the contract. So because they are part of the building documents essentially for us, and we'll send over the 2020 documents.

00:26:58:02 - 00:27:17:18

And for anyone who's wondering 2022 software so that a lot of the cabinet designers go ahead and use and even regular designers go ahead and use for other things. So, it's a CAD type of software is what it is essentially. but anyways, with that piece, we send those extra drawings over even when we have blueprints, because that goes ahead and specs out exactly what it's going to be in those spaces.

00:27:17:18 - 00:27:35:27

Specifically, and I want them. I added, there's nothing on 2020 stuff that actually adds initials, but I have them initial off on every page of those. And like with my contract, that's that's actually a key piece. A lot of people will do a contract. The only place they have a signature is on the last page. So and there's nothing on any of the other pages acknowledging.

00:27:36:00 - 00:27:50:23

So the fact this is this is what I got from whenever I got my first mortgage. It's like, why do I have to initial off on every frickin one of these pages? And it's because, well, if you initialed off on it, we know you at least saw it, whether you read it or not, that's on you, but you had the chance to read it is what it comes down to.

00:27:50:23 - 00:28:05:14

And it's the same thing on my contracts. you have to my homeowners have to initial off on every page of the contract, and so do we. We actually initial off to on on the main contract on the attachments and stuff like that. It's just them initial or signing off one way or the other. But we do that with cabinet designs.

00:28:05:21 - 00:28:23:08

We do that with our color sheets. So we do that. We have what I call my main contract is all the legalese stuff. So the stuff the attorneys write and it's like it's, you know, the stuff that everyone goes to sleep. And very few people unfortunately read it, which is to their detriment. That's one thing I'll tell you as a contractor, if you're ever handed a contract, you cannot just assume it.

00:28:23:11 - 00:28:40:13

Unfortunately, in today's world where like, you go ahead and download an app and they send you this big, long legal disclosure that you've got to go ahead and read and sign off on before you can accept the app, before you can get the app, people have become accustomed to not reading anything. It's the biggest mistake that you'll ever make, and those are the things that will catch you in the future.

00:28:40:13 - 00:28:57:18

Because once you sign off, it's acknowledging that you've looked at it. But that's one of the reasons why we have it on there is that's an acknowledgment. You should read everything in there. And I hate it like that. I remember the first time, Nate, that I got when I got my first insurance quote for general liability insurance, and I had asked for a couple of very specific things in it.

00:28:57:20 - 00:29:18:26

And I got the boilerplate template. Here's your here's your GL for your for your business. And I actually read through it and I'm like, you didn't include anything that I asked for. There's nothing in here that stipulates that or says that. There's actually a couple clauses that go directly against what I asked you for. So it's like, if I didn't read that and catch that, then if something happened, then I'm left but hanging out in the wind liable, like there's no tomorrow.

00:29:18:26 - 00:29:34:18

And that's the challenge that most people don't realize is you got to read those contracts. Well, you got to pay attention to them and you got to be familiar with them. And and no one's going to start off at a, at a high level of understanding contract. But the whole point of this is like, get in, get started.

00:29:34:20 - 00:29:52:15

You know, I'm I'm the same with you. Like, I get into, you know, whether I'm going to a closing for a real estate transaction or, I've got a client and I'm having to sign. I'm coming in as a, as a sub for them, as a GC, or they're coming in as a sub for B, as a GC.

00:29:52:17 - 00:30:12:13

A lot of these things are written and you have to pay attention to what and them and why they're there. And then, you know, make objections. Objections. If you don't like what you're what you're reading or not going to be beneficial for you. you know, because if not, like you're saying you sign off on it, it's an acknowledgment that you you did it.

00:30:12:16 - 00:30:48:18

And I hate it because I do kind of the same thing on on apps and things. I'm like, get this thing out of the way. Yeah, I'm swipe it up and then yes, I get to your checkbox. That's all I want. Get me a checkbox. And so and it's funny, I was that I was at a closing all this back in July and and the lady so I close with the same the same mortgage broker all the time and she knows to get get me documents three days before I'm coming to the closing table and because, previous transactions way back in the beginning, she just brought everything on day of signing.

00:30:48:18 - 00:31:05:28

That's a whole it's going to be a very long signing. And it's it's a it's a book. Right? I have three hours and they're reading every page and she keeps coming in like, are you done yet? I got another closing. Oh well you gave me these documents. I got to read them. You gave me ten minutes notice. Sorry.

00:31:06:00 - 00:31:26:15

Look, maybe you'll do different next time. So I was like, you got to send this to me three days before I got to get through it. Anyways, but it was important because there's a few things in there I had questions about, and so was able. I didn't have an option to like, not accept it, but I had an option to read it and then make a decision.

00:31:26:15 - 00:31:48:01

Do I still want this piece of property or not? And does the risk versus the reward benefit way out? And can I make an informed decision? Not an it, not a decision that was made for me with no no clause. Right. It's just can I make an informed decision based on the information that's in the, in the contract and that's how to get to.

00:31:48:03 - 00:32:01:20

So whenever like if you have a homeowner that you're working with and you get ready to do a contract, Nate and you send them the contract and they come back with, I want you to change X, I want to change Y, I want you to change Z one, two, three. So I get this. What do you do when that happens?

00:32:01:23 - 00:32:28:07

Well typically I only get that if it's an attorney or somebody that's net worth is above $25 million. Right? Right. And most of it's because they want everything to their direction. What I end up doing is I say, okay, you need to sit down and explain to me why this needs to change, right? Right. And then nine times out of ten, they don't really have a good explanation.

00:32:28:07 - 00:32:47:17

They just they just want to be difficult in that scenario. Right. And so they're looking to exert what they feel is their power in the in the negotiation process as well. Like and so and I combat that was 1 or 2 ways that and either one I walk away from the project and just say, you know, you're not a good fit.

00:32:47:17 - 00:33:11:20

This is going to work. I don't want to be into any kind of, misunderstanding or argument with you in the future, but good luck to you. And in your project. I hope you do well. Or I switch up the contract and give in and say, look, I will change this. But in order to change this, I have to have some insurance as myself, which means that the project's going to go up in price.

00:33:11:24 - 00:33:34:21

So therefore I need to be able to increase what my bid is in order to offset the in case this happens thing. Right. Because now, I'm doing and I and I charge a pretty hefty fee for that. Right. So just to change our contract is $25,000. The I don't even care if I'm going to change a comma, a period, what have you.

00:33:34:24 - 00:33:54:01

And it's not because I'm trying to be rude. I just know I gotta go back to my attorney. And and he's going to charge a bunch of money and he's going to be aggravated that he has to rewrite the contract that he's already written. So that that solves one portion of it. But then I'm being inconvenienced because now I have to go back and talk to my attorney to have him change it.

00:33:54:03 - 00:34:15:14

So the $25,000 flat fee is just a flat fee. Now, I'll say that over the last, you know, two decades that has only happened three, I think maybe four times, because we come to an understanding of like what I have in the contract is very, you know, kind of specific to our process and things that we need. Right.

00:34:15:17 - 00:34:32:21

and it's a fair and legitimate kind of way to handle business, but, but when you write a contract, that's the leverage that you you're not coming in there, you're coming in, there's like, this is me and our process and this is how we do business. So and and that's always one of the big things like of homeowners.

00:34:32:21 - 00:34:49:14

And you're right, very few people actually do it. and it literally for me, whenever they start going ahead and negotiating the contract, it's at least a, we'll call it a yellow flag. We'll call it a red flag. We'll call it a yellow flag. It's a pay attention. So because if we're already having this happen before we get into the project.

00:34:49:16 - 00:35:05:23

Yeah. No. And a lot of times it'll be something. And I ask the same questions like, you know. So. All right, what what are you concerned about with this being with this change you're asking me to make? So what's the actual concern behind it? You know, and find out what that piece is, because that a lot of times you can go ahead and find that out from them.

00:35:05:23 - 00:35:25:12

And that's something that well, we really don't need to change the contract. Maybe you didn't understand what this is written or how it's written. Exactly. And let me explain that to you. Or if we need to, I can just add a little addendum piece on that to goes ahead and assuage. Whatever their fear, their concern is. So in that piece, and I've done that before, but yeah, whenever they start going ahead and writing wholesale changes, I'm like, hey, I get it.

00:35:25:12 - 00:35:44:13

You want it, that you want it to be written your way. Yeah, this is written to go ahead and protect both of us as effectively as it possibly can. So in this instance and that's why we've got all these different pieces. I mean, I've, I've had homeowners that one of the famous ones that comes to me for contracts, so is since I work, I work almost exclusively in residential.

00:35:44:13 - 00:36:03:01

I've done a few commercial things here and there, but I just prefer the residential market. And by going ahead and doing residential, you'll have the occasional homeowner that comes in and wants to go ahead and put in a hard deadline on when you're going to finish. Basically, hey, this is your completion date. So for your project and that's something that if you do commercial or commercial work, that's typical, that's a part of the contract.

00:36:03:01 - 00:36:17:06

And most of them are at least if someone who's writing it knows what's going on now. But whenever you go ahead and do that on the residential side, that's a little different. Well, and whenever they go ahead and ask that, it's like, all right, I'll go ahead and put that completion date in there. But I give them a caveat.

00:36:17:08 - 00:36:31:17

So I'm going to give them that. If we're going to go ahead and do a completion date for every and then they have, they're looking for when they have a completion date, they're looking for a penalty. Again, very much commercial contract like well, for every day you run past that completion date. So the caveat that I thought it was great.

00:36:31:17 - 00:36:47:29

So if we're going to do that, we're going to the bonus system. The same one of the commercial guys do two. And for every day I come in earlier, this is how much money I get paid extra for coming in early. Yep. Now in real life. So here's the time delay and time delay, deductions too. Yes. And that's it for anything.

00:36:47:29 - 00:37:05:14

That's their choice is my change orders. And we were talking about that earlier. My change orders say the number of days. This adds on to the expected completion time of the project, hours, whether they've got whether I've got this completion date piece of my contract or not, that's setting expectations of what's going to happen. But anytime they make changes, that's I encourage changes.

00:37:05:14 - 00:37:21:05

Whenever I've got a completion date in there because they just keep bumping that time frame further and further out is what ends up happening. but that's like you go ahead and do those kinds of things. I've had people are like, oh, we don't want to do that. And I'm like, all right, so this is, you're looking to penalize me, but there's no incentive for me to go ahead and actually do.

00:37:21:05 - 00:37:36:04

What you're looking for me to do is get done faster. Right? So that's just only works for you. And the contract supposed to work for both of us and make both of us happy. As soon as you go ahead and call somebody out on that, typically they go ahead and back down because now they realize that they're being the one who's who's over the top.

00:37:36:04 - 00:37:57:18

So putting it nicely, as opposed to, you know, looking for something that's equitable for everybody. Yeah. You know, one of the things that I get a lot of, you know, it's kind of funny, subcontractors that come in and, and we, we pick them up from ten different projects, but, I get subcontractors in my contract.

00:37:57:18 - 00:38:17:20

They always like to scratch things out and write in their own language to do all this stuff, and and I and I have to keep coming back home to be like, nope, that is not going to work. I can't give you a check until you sign my contract. And they're like, well, this doesn't work for me. And I was like, well, you have to understand, I have a contract with my customer, right?

00:38:17:22 - 00:38:34:25

And inside that contract are these these things right? All of the outlines of what we're going to do and how we're going to do it. Right. And then I got to turn around. I have to have a contract with you, my subcontractor. You work for me. Who's working for them? Right. So our contracts have to come together in alignment.

00:38:34:27 - 00:38:55:18

And if you're put it in your specific rules, then how is that going to work out when something goes wrong between me and you in that situation? And I got the the homeowner or the customer in this situation. So no, I cannot change her. Your piece. And if you want to work for me and you want to get paid, then you've got to be on line with our contract.

00:38:55:25 - 00:39:13:16

You know that and that. It's that piece right there that they just brought up is something I know. So many builders who don't do. And I've even got I've got guys that come for some of my subcontractors. I get a text. This is what the price on this project is going to be. Now the big difference between us is we've also worked together for, you know, a decade and a half.

00:39:13:18 - 00:39:30:25

So all those other parameters that Nate's talking about in those what they are subcontractor agreements is what Nate's referring to. So if you've never heard of that, if you're doing general contracting, you need to have those because there's so many different pieces in that, whether it's draw schedules, expectations of work, so insurance that they've got to go ahead and provide.

00:39:30:28 - 00:39:43:14

So all the different pieces that come in that like draw schedules is one of the big ones. I know one of our first started out, I would get caught up in that all the time because certain phases like cabinets and counter to cabinets you need, I'd have to do a 50% deposit on cabinets when you order them. Yeah.

00:39:43:16 - 00:39:57:09

And then, for countertops, it's you've got to pay for the material itself. So with one of mine, one of the other ones, it's 50%. So either way though, so you've got to go ahead and pay for something upfront. And in the beginning I didn't know that. So my draw schedule and this is like what you were talking about Nate.

00:39:57:10 - 00:40:14:03

My draw schedule wasn't set up with that money already coming in from the homeowner, which meant that I was fronting that money so out of my side to be able to do that, to be able to to move it forward. And that came exactly like Nate said, you've got to get both contracts working together, which basically means they've got to go ahead and conform more to yours.

00:40:14:10 - 00:40:27:22

So or you have to know what they're says and adjust yours. But for me I just some of the drawers. So to go ahead and bring in some of that money a little bit earlier. That way my deposits are there when they need to be there. Yeah. And and I've, I've been able to do some of that. Right.

00:40:27:29 - 00:41:07:17

and I've made more adjustments with subcontractors in my official contract than I have then for the customer, because what I've come to find out is like, you know, you know what? That guy's got a good point of why he needs to get paid when he needs to get paid. Right? Right. And that guy has a good point of, like, why he needs to have, a location on the property to either put a portage on or to put this so I started I started incorporating, you know, their request into my official contract, and then I then give over and, you know, a lot of people don't do that.

00:41:07:17 - 00:41:26:13

They kind of work, you know, the these are my rules, as are all my rules. And I'm not going to work with either party, or you're kind of limiting your customer base and your labor base by doing that. And I know a bunch of, like, big home building companies that are like, this is our way. This is the only way.

00:41:26:13 - 00:41:52:05

If you don't comply. And their contracts are like, I used to work for some of those companies. Yeah, their contracts are like 50 and 60 pages long. And you know, you know, it gets to be to a point where it's like. Nobody really understands what's going on. They just have an idea. And that's what I told that that same home builder that that you're familiar with, I was like,

00:41:52:07 - 00:42:12:19

You got your contract so big, who other than like a handful of as I actually read it and nobody, nobody on that's out there that works for you. Who's managing job sites has ever read. Yeah. You're on your whole team hasn't read this. They don't know what they're supposed to be enforcing or how this is. They have no idea.

00:42:12:21 - 00:42:31:18

and it's like it's so laughable sometimes, but, but that's and it's working with people. And that's one of the big things is that you've got to you want to work with them as much as you can. That's not going to go ahead and put you out. And like one of the reasons, like Nate was talking about earlier with homeowners and things like that, we don't like making changes to the contract because again, it changes our process.

00:42:31:25 - 00:42:51:20

And now our team has to be aware that something's different. Yeah. And if you've got something different in every project and you're running 15 to 20 projects at a time, guess what? It's hard to keep track of all the differences. And that's one of the reasons like the big homebuilders I get it. So when you're going ahead and and building a thousand homes a year in a, in a specific area, you know what?

00:42:51:20 - 00:43:15:09

It's got to all be the same. It can't be different all over the place because there's no way. It's not it's not it's an unmanageable process at that point is what it comes down to. Yeah. It's just too much and that's so good. But you're up, Nate. Good. And, I'm good. you know, so whenever it comes down to it, I mean, the contract for me, like, one of the other big things that we do.

00:43:15:16 - 00:43:32:18

So with our contract. So I told you, I get real specific with everything as far as all my phases go. And that's one of the attachments that we go ahead and include. We actually call it attachment A, so it's what it's called. and whenever we go through that's the literally line item that with everything. So drywall we're going to go ahead and hang finish spray.

00:43:32:21 - 00:43:46:00

So we're going to be back for a bump at some point in the process. Like literally everything for that phase gets lined out in there. If we're if we're doing a remodel, it lines out the areas we're going to be in the kitchen, we're going to be in the master bathroom. So we're going to be in bedroom number three.

00:43:46:04 - 00:44:00:00

So because those are the areas that we're doing things like I line all of that stuff out if we've got, you know, paint colors and things like that. And I know that that shows up in schedule A also, but it's also on the color sheets and they have to sign off on the color sheets too. If those things are decided.

00:44:00:00 - 00:44:21:18

Whenever we go to contract, a lot of times the design things we don't get into, or at least the color selections, we don't get into an until after the contract signed because I don't like burning my team's time for something that I don't know is happening yet. Yeah, that was what it comes down to. so that those those are every one of those additional pieces just makes that clearer and clearer and clearer in your contract.

00:44:21:18 - 00:44:35:05

What you're delivering and your is actually happy about it, because then they know there's been times where I'm like, hey, if you go back and refer to this like, oh yeah, that's right. Well, if you've got a written like that and they saw it, it's like, all right. I did see that somewhere. I just didn't remember it. Yeah.

00:44:35:07 - 00:45:07:09

You know, I don't think most homeowners I think actually commercial, GSEs are probably the first to throw it because they're trying to nickel out everything, but we'll keep it within homeowner, compliance. But most homeowners aren't looking to, get over on a contractor doing work. Right? Most of them are pretty happy and appreciative that somebody is there at their home and is doing improvements and doing the best that they can to show up and, and all these things.

00:45:07:12 - 00:45:29:14

And so they're not looking to to take advantage or to, you know, make things more difficult. They're just wanting to be done and completed in a timely manner. to the best. That looks appropriate. And half the time they don't even know what it's supposed to look like. Right. Which is a whole other. Yeah. So that's a whole podcast.

00:45:29:14 - 00:45:47:21

And so, yeah, I mean, but we put in things like warranty, we put in things like, timing and how we're going to do it releases. you know, I wish I had my contract up. I go through it with you, but that's like what? Like for me, I've got in there what we call our, platinum standard closing.

00:45:47:28 - 00:46:00:16

So what that is, is we go ahead and these are the things that will be taken care of for your closing. We're not able to close the project out unless we've got five punch out items or less left. So that came from one of the builders I used to work for. So that was the way they had it.

00:46:00:16 - 00:46:14:15

I figured, I, I actually like that part of what they did in their process, and we want that included that in there. So it's like those little pieces like that. Those are the things that the homeowners understand. Oh, it's like, oh great. Well they're not going to especially with the homeowner. They're putting a lot of money in. And this is someone where they live.

00:46:14:15 - 00:46:32:24

Like that's one of the big differences between residential and commercial. Commercial. This is a business is supposed to make money in some way, shape or form. While it's important the structures there and everything functions the way it's supposed to, they're less concerned in a lot of cases about what how it actually looks. Homeowners are going to be concerned about how it looks because that's how they judge the project is what does this look like?

00:46:32:24 - 00:46:54:12

Does it look right? So huge difference. And it's why when you work in one it's easy. Usually you'll find one of those areas it's easier to work in or your teams are better better able to functionally. Yeah. So it comes out of the person that I look at, you know, construction is very you know, commercial construction is very black and white, you know, but dry it is or it isn't.

00:46:54:12 - 00:47:17:16

Right. Like either you were there or you weren't there. Right. And it's very just blunt and straight to the point. And then with residential and homeowners, it's all emotional based. Right. Because it is it is their investment. It is their personal, living space. It's their life. It's their place where they their oasis, it's their castle, and it's very emotionally tied.

00:47:17:19 - 00:47:41:14

So every decision has a profound effect upon them. And, so you have to be able to understand that, and everybody's going to realize what, what world they fit into better. And if you're like, straight to the point, you know, the zeroed in, it's either this or it's this, this, this commercial contracting is the way to go for you, right?

00:47:41:16 - 00:47:58:15

Is it that it has to be perfect? You don't have to be, you know, on a scale of perfect, right? We have, you know, 0 to 10 and homeowners are all going to want everything at an eight and a half or better, right? At least. Yes, I agree. And commercial construction is is there something there they're going to hit.

00:47:58:17 - 00:48:14:09

It's about 3 to 5, right. Just you know, it doesn't actually open and close and do what it's supposed to. And all right that's perfect. That's all I do. Yeah. Move on, move on. Yeah. You know, can I get this open. Can I start making money? But yeah. Yeah, it's it's a lot. But it's a that's what it comes down to.

00:48:14:09 - 00:48:30:12

I mean in the contract end of things and like Nate's talked about before and like I've already talked about to one of the biggest pieces is you learn over time your contract is always going to be evolving. This is a one of those pieces that literally every year we go back and review the contract and see what new things get added.

00:48:30:12 - 00:48:46:18

I keep a running, I mind map everything, so if you don't know what my maps are, reach out to me. I'll be happy to let you know what that is so that we use that for everything on the organizational side of our company and what I have on my map. That's open all the time. And you know, when something happens, I put a note in there that this happened.

00:48:46:24 - 00:49:01:10

It doesn't necessarily mean we're going to add something new to the contract. It's a let's talk about this. Let's figure out whether it makes sense, whether this happens on enough occasions for us to do something about it, or whether this is just a one off. So and I probably won't see it again for another 15 years if it ever happens again.

00:49:01:13 - 00:49:17:26

And we do that. And that's I would say do that. Keep that running piece like that. Take a look at your contract every however often you want to review it to make changes. I don't unless it's something dramatic. I typically don't make a change immediately. probably the last change that I made immediately was with the photo and video one.

00:49:17:29 - 00:49:32:18

So I went over. They wouldn't allow me to go ahead and take pictures of what was going on and post them. that was the first one. That's the that's the one that I want. All right. Well, I've got to do this now. So because of the fact that I had multiple contracts coming up and I'm like, I'm not going to get locked out of this somewhere else to.

00:49:32:21 - 00:49:52:17

Yeah. You know, it's kind of we do kind of the same thing. We, we do a review on our contract every year just to make sure that it's staying up to date, making sure that we're happy with it. We, we put a new, contract number at the bottom. Just saying. Hey, we refreshed it, we knew it and copyrighted it, and that's that.

00:49:52:18 - 00:50:10:27

So do that. And if you do nothing else, even if you review it and don't change it, change that copyright date at the bottom or that review date at the bottom, homeowners that if they get the contract and that's been seven years since you've looked at it. Yeah. Well, or at least since it says it's been reviewed or updated, they, some people look, poorly at that.

00:50:11:00 - 00:50:29:22

Well, that's just like your website. Having your website should always have the current year on it for whatever's going on. It's funny that you say that because, I had one of my project managers, I think it was last year before, he he couldn't find our regular and we used, we use Google Drive as a, so you've got lots of it.

00:50:29:24 - 00:50:47:18

You've got lots of past contracts. Yeah. Right. And so I don't know what he was doing, but he had to get a contract signed. And, and he went in there and he thought he pulled out the current one. But it was the 2015 one. And I had. Know he pulled it all out and we he got it over there.

00:50:47:18 - 00:51:02:04

Explain it all to the customer. You know, it was half the size of what it is today. And, and it's you know. All right. Well, did you get the contract? Oh, yeah. Here you go. In the hands of that, I was like, that's a little light. And he's like, oh no, it's all in there. It's all in there.

00:51:02:04 - 00:51:24:04

They sign every page and everything. and I'm doing the reviewing up. And I said, well, good job on getting the contract. I applaud you on that. But, this one's from 2015, and, we're in the 2020s now. I think, like 2022 or 2023 and, like eight years old, and it's like, you know, you're to have to go back and get.

00:51:24:04 - 00:51:39:00

Yeah, I had to go. I had this didn't want to revise. Well, the other part of it too, is that I had to go back. Right, because I could send them back and say, like, look, I screwed up. I had to go back and and I met with the customer, which they were a wonderful couple and, completely understanding.

00:51:39:00 - 00:51:58:24

And they understood the whole thing. I said, unfortunately, this is the old contract and, you know, we need to get an updated contract. We've added some things. And so, which at least if this if you've got those dates on there, that's the good thing is like if he's got to go back like they had to go back, it's real obvious as to why, 2015, 2022.

00:51:58:29 - 00:52:19:18

Got it. Okay. Yeah. Exactly. So that kind of work, you know. And so I think, I mean, it's one of those things that it's a living, breathing document. There's no question about it. You're always going to make changes to it. If you've got questions on it definitely reach out to Neda. Right. So whether it's in the comments so here whether you hit this up on our social media pages, whatever the case may be, they'll reach out.

00:52:19:18 - 00:52:44:24

We're here to help answer those things. I know I've given my budget out. We'll put a caveat to that. Have help me to reach out. Help me to read it helped, guide through things. But I am not an attorney. I'm. Yes. Lawyer. I do not represent you in different states. I would always advise you to go and say counsel before you issue it, because it is not, know I'm not the end all be all.

00:52:44:26 - 00:52:59:02

So so essentially what it is is we tell you what we do. We don't tell you what you should do. Exactly. And that and that's truly one of the differences is this is what we do. This doesn't mean this will work for you even if you're in our state. It doesn't mean that it's the best thing for you.

00:52:59:07 - 00:53:18:13

So you've got to have your own advice and counsel going ahead and saying yes, this helps you in your situation. Definitely do it this way. Well, and that is because I have read contracts before and I put in my disclaimer early and often, you know, so but it is it's and it's hugely important. And that's what I want everyone to realize.

00:53:18:18 - 00:53:34:24

So as you want to have it, you think in the beginning you're doing yourselves a favor, you're being nice to your homeowners. And Nate and I have both learned throughout the years, unfortunately, that comes back and bite you in the butt, which is why the contract gets longer. get that piece set up, so get it as quickly as you possibly can.

00:53:34:25 - 00:53:47:24

You'll start adding things to it. Go to someone in your industry. Go to someone who's been doing this for a while and ask them, hey, so what are the some of the key things that I have to have in right now? So the type of thing when people come to me and ask me, I literally like if it's another GC, I just hand on my contract.

00:53:47:24 - 00:54:00:27

I'm like, just take it. I don't care one way or the other so you can go look at it, use it again, use it as a reference point. Don't use that as the final word. But here's a reference point for you. Yeah. Change it, use it. I've done it. I've given it to really to contractors and other people.

00:54:00:27 - 00:54:24:02

You know, I just I say, hey, look, it's a template for you to get started with and you can read it, you can go through it or things out, take, you know, copy and paste it into your own. So I don't, I don't care. I'm not your attorney. Right. I just I want people to have an understanding or a starting point for where they need to be and trying to make it easier for them because I know where I started.

00:54:24:02 - 00:54:47:05

I started with no contract. Everything that I did for, oh, probably the first couple of years, 2 or 3 years was just a handshake deal. And at that point in time I was taking cash and, you know. Right. And it was just and I was very lucky. I was very lucky that none of my people got hurt, that nobody screwed up and and ruined anything inside their house.

00:54:47:07 - 00:55:05:11

because all those things would have been liabilities on me, right? And I didn't have a contract and I didn't have general liability insurance. Those are the two things I didn't have in the beginning. Yeah. Going back, those are the two things that I ask every new contractor or every new person coming in that's going to do their own thing.

00:55:05:13 - 00:55:25:16

Those are the two things that you need to get in place a general liability. insurance for yourself and and and it start a business will run you about $100 a month, 100, 150 because you just have a specific thing that you're doing and you're getting started. And they, they, they based off your revenue. And you don't have any you don't have any.

00:55:25:21 - 00:55:50:10

Yeah. So it's easy. Yeah. And you're covered and you need to do that because insurance is another thing that we kind of do a podcast on insurance. But insurance is another thing that you, you need to have. But I can't I can't tell you how many people do not budgeted into their, their monthly expenses. And it's the first thing that they lose when, when the money gets tight.

00:55:50:12 - 00:56:13:16

Right? And it's like, no, no, that's the one thing that you keep on top of everything else because you walk onto their property, you walk onto anybody's property, you trip, you fall, you hurt your people get hurt, materials damaged, you cut the wrong line. You you know, any kind of catastrophe that happens, you want to be, you know, covered for.

00:56:13:16 - 00:56:28:18

Because if not, it could lead you to destitute. Well and and the challenge with that and one of the. We don't want to go too far down this rabbit hole. But the challenge that people think about is like, if you're a GC or something, you've got subcontractors like my subcontractors have insurance, you're subcontractors have insurance on what they do.

00:56:28:21 - 00:56:45:05

Well, if something happens, if your subcontractor does something like that, that needs talking about and there's damage done or challenge, they're coming after the subcontractor or they're coming after you. So they're going to name everybody in the process that they possibly can. And you've got to be able to defend yourself and have the insurance, because maybe your subcontractors covered.

00:56:45:05 - 00:57:01:04

But I bet you what if they're covered in you're not their attorney is going to help your attorneys, but because the insurance companies come in with heavy hitters, those ones that come may come to play the game. Okay. In terms of law. Exactly. So that's what you got always recognized. But yeah, the insurance is one of the huge things.

00:57:01:04 - 00:57:19:10

I agree with you for sure on that. And that contract, just to go ahead and keep everything communicated effectively, said all the expectations the way it is and and protecting both of you. So is what it comes down to. the homeowner in the contract doesn't have to be anything elaborate. Right at the very beginning. You just have to get the basic set and then you can grow up.

00:57:19:10 - 00:57:36:06

That and the other part of it too, is that, you know, you can just have a handwritten contract if you want it, if you just write it out on a piece of notebook paper and everybody signs it. They'll probably require that you stick your thumb and put your blood thumbprint on it. But you know hey it all works.

00:57:36:09 - 00:57:54:22

It depends on what part of the United States your. And so there's definitely some parts that they would rather have that than your signature. Oh yeah. So so it's just it's one of the key pieces. And that's one of the things that we don't want to see you get started in the industry without it, because I've heard too many horror stories where people get put out of the industry because they don't have it or because their insurance lapses.

00:57:54:27 - 00:58:07:23

So that same way, these are some of the key pieces to having if you've if you've been in the industry, go back and listen to some of the things that Nate and I talked about today. I'm sure there's some extra pieces you can go ahead and add in there that might make your contract just a little bit better for you and for your homeowners.

00:58:08:00 - 00:58:31:02

And that's really what we're looking for is to go ahead and take care of both sides in the construction industry. Make sure to go ahead and listen to this. Make sure to share this. So out to everybody you possibly can. That's the biggest thing you can do for us is share this podcast out to your friends, people in the industry, anyone you know who wants to get in the industry just to give them that little bit of experience and knowledge on what we do here at Builder Hacks now, let us know in the comments down below.

00:58:31:05 - 00:58:35:25

So we look forward to seeing you on the next podcast. Until then, have an awesome day!