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Article > Builders like litigation are best avoided!


 

Article kindly supplied by Jim Haliburton www.hmodaddy.co.uk


In my experience there are no good builders they all range from at the best, imperfect to extortionists i.e. criminals. I would like to be able to advise an investor to buy property that does not need building work or is within their DIY capability. If you do not have DIY skills, learn it, it will save you far more money that most people can earn working for someone else. Having said that I could not have done what I have done without builders.

The big profit in HMO’s is usually made from the conversion of a house into a HMO. In my early days I had enormous problems with builders with threats of violence to me and my property from some not being uncommon. The usual scenario was they would give a price, start, wants payment by installments, then demand more and could not finish the work. Some had no intention of finishing the job, but I only discovered this afterwards, when I had paid out a lot of money and they had disappeared leaving a badly started project.

The problem is that most decent builders have all the work they can handle from existing customers and generally they do not want to work for people they do not know about and trust. I have a team of builders who used to work exclusively for me, but have recently started to do work for other people and I can now see the situation from both sides. They are like us landlords, labeled as rogues but are sinned against more than they sin. Many of their problems are down to failure to get a clear specification in writing of the work to be done. Customers are confused about what they want, fail to give clear and accurate instructions, push for a cheap price then change their mind and want a quality finish but at the price of a cheap job or complain the job looks cheap when it was what they asked for in the first place, fail to pay on time, demand a discount for paying, use the builder to finance their work, use petty reasons not to pay or delay paying and are generally ungrateful when the job is finished. Customers have unrealistic expectations and often get very stressed and abusive when things are not going as they expected. A builder’s lot is not an easy one. Getting paid is a major difficulty and my builder’s find over half of their customers delay or try and avoid paying.


Look at the person
We are now talking about whether they should stop doing contract work for others and go back to working exclusively for me. This would mean I would have to diversify into buy to renovate and sell and new build i.e. build houses. I have yet to decide on this and in the meantime I give them very similar advice as I am giving to the readers, look at the person not the price, the price is meaningless if the builder does not do the job or the customer does not pay. Only deal with people you trust and preferably can sue if things go wrong.

Having said that it is the person you are dealing with that is of fundamental importance, unless you are prepared to wait two or three years and pay a premium for your building work because as I said earlier most good builders have all the work they can cope with and they can charge what they want. You will even have enormous difficulty in getting them to quote as they usually do not want the work and will only take new work if they can make a decent profit out of it like a new BMW car! Some investors laugh at me when I tell them this, ‘Won’t get a BMW out of me!’ kind of response. In my view it is very short sighted. Consider what a good builder will do for you: hopefully a job well done, on time, on price and what should not be missed, cheaper than you could get it done project managing the job yourself because they know all the shortcuts and cheap suppliers. Stop penny pinching and look at the big picture. If you do the business right you should in 10 or 20 years time be buying your first luxury yacht or be capable of doing so. What is the alternative; you employ dodgy builders who rip you off and do work that often needs to be redone and or causes ongoing maintence problems. The project which you had planned to have ready to let in three months is still unfinished and unlettable eighteen months later. Imagine the stress, strain and loss of income.

You can never beat a crook
Do not make the mistake of thinking you can be cleverer than a crook and manage them, you rarely can and they are streets ahead of you and know every trick going and every string to pull. Do not even try and reason with them, it only applies one way with such people that are you are expected to act in a rational or decent way, not them.

Three clues to a dodgy builder
There are three clues to look out for, to identify a bad builder, but they too may have read my Guide and so they may hide them! The first is they are usually on job seekers or disability benefits which once they know you know this they will use it to try and blackmail you i.e. ‘You are employing me while I was on the ‘dole’. You can be prosecuted for that I am going to report you!’ This is perhaps the most significant clue, those who sponge off the state i.e. work while claiming benefits for being unemployed are usually without morals, it is the litmus test, ripping you off in comparison is very minor to them.

The second clue is they usually have a drink problem and often turn up smelling of alcohol. Finally, they are usually unable to give references of previous work they have done, because everyone they have dealt with they have ripped off. However, some are clever in this respect and will have one or two jobs they have kept for this purpose or have some friends who will say they are good workers. Often they have business cards, letterheads, invoices etc; you can get them printed in motorway service stations, even certificates from a college to say they are competent or to show they belong to a trade association. As I said earlier they are cleverer than you and they know all the tricks.

Once these people have found you some are worse than the take the money and run merchants, see later, they cling on for dear life forever pestering you for work, full of excuses and promising to do better next time. They will come round to your property on the pretence of looking for work but also to see if they can steal anything. Try and avoid dealing with crooks to start with and get rid as soon as possible once you realize you have made a mistake.

Thats all for now. Part 2 will follow next week!

 


Jim Haliburton HMO Daddy


Jim Haliburton
www.hmodaddy.co.uk

Jim Haliburton began buying property in 1992 and letting them to students, organising or doing the work on the property himself. Jim now owns over 86 HMO's / Multi-Lets with over 500 tenants. On top of this he has about 20 houses and flats which are let as single-lets plus several development projects in progress.

 

 
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