Speaker 1 00:00:12 Welcome to the quick getting spooked podcast, where we talk about everything related to contractors, construction, and information to help you run better businesses.
Speaker 2 00:00:25 Hi, this is Carolyn chromes and welcome to the quick getting screwed podcast. And today I have an old time friend and expert in the industry. Uh, joining me to talk about some lessons he's learned in the construction industry. Um, Mr. Greg carton of ice residential morning, Greg, how are you
Speaker 3 00:00:42 Doing? Hi, Carolyn. How are you this morning?
Speaker 2 00:00:44 Oh, I'm great. And doing nice cold weather. So Greg, tell us a little bit about yourself. Where are you from? How'd you get to Texas kind of the background
Speaker 3 00:00:53 Stuff originally from Baltimore, Maryland. Um, big fire department background spent 25 years fighting fires and saving lives and got into construction about 19 96, 19 97. When I was a contract administrator for a stucco company on the east coast, which then led me to be headhunted by a stucco company out of Chicago, which then led me to be placed in Texas. And in 2003, I jumped ship and decided to open my own stucco business and have been doing that ever since. So
Speaker 2 00:01:26 What was your first experience with stucco? How did you learn about
Speaker 3 00:01:29 It? Well, I was a contract administrator for a very large firm on the east coast and, uh, there was another firm out of Chicago who was a very large nationwide stucco company that wanted, uh, an east coast vice-president. So they head hunted being away to run operations. And at that point I had never put any stucco on the wall. I just knew paper. So it was a learning experience to be able to take over their operation. And, um, not only run the administrative side, but also to learn and run the field side as well. And that's, that's how I came to, came to have my own business
Speaker 2 00:02:07 Really. So he'll do, excuse me. What is this contract
Speaker 3 00:02:10 Administrative claim or I poured over contracts and handle the certificate of insurance and, um, made sure that, I guess, for, for lack of a better terminology, made sure that my boss didn't get screwed by taking out all of those little hidden gems, the general contractors like to put in their contracts to make sure that they're well protected, but the sub is never protected. Oh, so
Speaker 2 00:02:31 You've been doing this, don't get screwed stuff for a long,
Speaker 3 00:02:33 Long time. I've been doing it and I've been getting screwed for a very long time, a hundred percent.
Speaker 2 00:02:39 I'm curious since you've looked at contracts from way back then, what do you think about contracts from the nineties compared to contracts now having seen both?
Speaker 3 00:02:49 Well, you know, the AIA contract has been standard for quite a long time and I don't know in which version they are at at this point. Um, but I do know that the AIA contract is largely what most, everybody bases their contracts off of. If they don't actually use the AI. And what I see is I see that general contractors are protected 100% and some contractors are left on their own. I see a lot of general contractors that don't like changes made to the contracts period. They certainly don't like their AIA contracts messed with. But, um, if you don't pour through them line for line and start to pick up where you have an opportunity to get screwed, um, then you're not protected. So I don't, I don't think there's a general contractors contract out there that is friendly to all parties. I think it's solely centered on their own protection.
Speaker 2 00:03:47 Do you think there's room for change? Do you think there's room to have, I mean, based on your experience, you've been in every street for a long time?
Speaker 3 00:03:57 Well, I mean, there's some good general contractors to work for, and then there's not some good contractors to work for, but I don't ever see a way that a general contractor is going to want to give up a little bit. Well there,
Speaker 2 00:04:10 Well, there's somebody that'll sign what's out there. Right?
Speaker 3 00:04:14 Well, let's put it this way. I mean, if you, in the competitive commercial market, you know, when everything is hard to bid and there's 10 stucco companies bidding on a hotel, first off, they're going to go with the lowest number. There's no loyalty. They're going to go with the lowest number. And then once you get that job, you have no choice, but to sign the contract, if you don't sign the contract, they'll just go to the next guy. So you're kind of in a bad position where if you don't sign it you're out. Um, no I've made changes to, to contract general contractors contracts. For years, I had exhibits that I would submit along with it that had standard items that I wanted to have in there. And I don't recall anybody ever just accepting my changes without huge problems attached to it.
Speaker 2 00:05:00 Once you made changes, would they hire you after that again, on another project,
Speaker 3 00:05:04 They may, they may accept some of the changes, but in most cases, um, after I sent the contract back with my markups, I was informed do not mark out the next contract. So, um, I just never really saw where there was any give and take at all. Um, I think it went from reviewing the contract line by line word for word to then realizing that, just sign the thing because they're not going to agree to any changes. So why waste three hours going over a contract, just sign it and get it back. And, and, um, I think you learned this, you know, your relationships, you know, if you build a relationship like we had with one or two GCs in Houston, you know, I didn't like the contract, but I didn't really have any major problems getting paid from them. And that's ultimately what you care about the end of the day is just getting paid.
Speaker 2 00:05:52 So tell me a little bit about ice residential.
Speaker 3 00:05:55 We'll primarily we focus on strictly residential stucco repairs. Um, back in 2014, my wife lost her job as a researcher, and I thought that I needed to find a different way or an additional way for some, um, more income. So I decided to open up repairs and it was a halfway decent year. And I continued to build on that six years later, I managed to convince my Paul, my partner, Paul ivory, to be, um, to get away from commercial, no more hotels and shopping centers. And let's just focus on repairs. So we have six to eight crews working 12 months out of the year. Non-stop, um, I like repairs. I get my money, half my money up front and half on completion. There's no retention, there's no problems getting paid. Um, we do about a hundred jobs a year and the stress level compared to working with a general contractor is zero.
Speaker 2 00:06:56 Really? And, uh, you write your own contracts too, right?
Speaker 3 00:07:00 Well, I wrote the basis for the contract. Then I had an attorney tighten it up and over the last, maybe three or four years, I've used your office to tighten up the contract even more. Every time I get kicked in the ass, I learn. And then I go back and I contact my lawyer in your office. And I have Courtney draft, a clause that we can put in our contract to protect us from getting kicked in the ass again. And so our contract is reviewed at least twice annually, and we probably add something in there every single year, just to continue to protect us. I have an eight page contract, which is maybe a little bit much for a residential repair guy, but I have an eight page contract followed by a, B, C, D five, five exhibits that attached to it. So I think that we probably are protected better than just about anybody in the entire city.
Speaker 2 00:07:59 So why do you think, uh, the residential market is less stressful than the commercial market?
Speaker 3 00:08:08 Well, let's see. I can start a job on Monday and I'm usually finished seven to 10 days later. Um, I get a deposit upfront, which covers my expenses. So the worst thing that can happen to me if I don't get paid on the back end is I lose my profit. I think that dealing with people as a whole, you know, homeowners that need to have their own fixed, um, they're happy to see, you know, you can, you can adjust your schedule as needed to suit them, to suit them. I don't have to work around other trades. I don't have to deal with the general contractor in meetings and being pushed. Um, I'm my own general contractor. So we're the expert on the job site and I don't have to listen to an architect. I don't have to listen to an engineer. It's just, it really is. Stress-free other than having to, with a commercial job.
Speaker 2 00:08:57 Well, I've always heard that nobody wants to deal with homeowners because they're so very difficult. And that's why people, a lot of people end up in the commercial market because they can't make a homeowner happy. Have you ever had that experience?
Speaker 3 00:09:09 Well, listen, every single year, there's going to be some homeowner that no matter what we do, we just can't make happy, you know, one time per year. And I think that, um, one of the things that people have to realize is you can, you can decide whether or not, um, you let that bother you or not. You know, there's, uh, when I go to sleep at night, I go to sleep conflict free. And that's the most important thing, you know, sometimes, you know, we get screwed because we have to paint a door that, you know, isn't in the contract or we have to repair something that wasn't in the contract or the homeowner didn't understand something and thought it was included. And you have to take a look at it and say to yourself is an hour's worth of work, worth fighting for days on end.
Speaker 3 00:09:57 So our philosophy is we just simply do it. Um, you know, not to the point of being abused, I'm not going to, you know, paint 2000 square feet at no charge. We don't get abused, but it doesn't hurt to put a smile on your face and say my pleasure and do a little extra. And at the end of the day, you know, we get paid on time. Um, everybody's happy we get, we get a good review on Google instead of a bad review. And, um, I think being conflict free makes, makes life a lot easier.
Speaker 2 00:10:28 Um, so having been in the construction industry for so long, um, and just like what you mentioned, fixing things that you not necessarily should have, but I have, you know, a lot of young, new contractors out there that pride is a big issue when they're starting out. And you've been both commercial and residential. How much should you let your pride control your decisions?
Speaker 3 00:10:54 Well, I think as a young, as a young man, um, I definitely let my pride control my decision and as I'm getting closer to retirement and I realized, you know, what's more important, you know, like I said, sleep going to sleep conflict free is, um, is huge. I don't want to lay in bed at eight o'clock at night, worrying that I have to fight somebody over, you know, painting a door, you know, what does it, what does it cost me at the end of the day, a little bit of material, a little bit of time. Um, but peace of mind is worth 10 times more than that. Now dealing with commercial, you know, you can't give away the store in commercial. You know, if you need, if you require a change order because it wasn't on the blueprint, you absolutely positively have to stand up for yourself because you're not talking about $200.
Speaker 3 00:11:42 You're talking about thousands of dollars. You're talking about an extra week. You're talking about having to pay your sub labor. They're not going to just do it for you for free. So, you know, you have to draw the line between commercial and residential. If this were a residential new construction, um, then I certainly wouldn't be giving anything for free because everybody understands up front what your, what your contract states based on blueprints, but when you're dealing with a repair, um, you know, sometimes people don't quite understand. I know that they don't read their eight page contract. I know that they don't read their stucco proposal word for word like they should. Um, so, you know, I just have to say to myself, what the, what does it cost me to to have a little bit of peace of mind to make sure my customers happy, you know, referrals in my business are, are everything 90% of everything that I do is real estate agent based, you know, homes are being sold there's problems and they have to be fixed. So, you know, do I really want to piss off a real estate agent? That's going to provide me with 15 jobs throughout the course of the year. Absolutely not. So I've learned as I've gotten older that, uh, don't let prides drive my decisions, you know, make my decisions based on how I feel, you know, what is it going to cost me? Can I sleep at night? And what is this gonna do to my referral base?
Speaker 2 00:13:05 Yeah. I mean, I think then I was the same way when I started out, no, you're going to pay me everything, you know, you're paying now or we're going to, or we're going to go down the road together and fight this out. And then I lost a couple of times. And then I realized, you know, sometimes it's not worth getting everything you want just because you want it now, because as you said so,
Speaker 3 00:13:23 Well, listen, you, you know, very well, my leg, the last time that we let our pride get in the way was over a $3,000 bill. And we were right. 100%. We were right. And a year and a half later, $40,000 in legal fees, over $3,000 bill sitting down with the judge, um, walking away from that, you know, it was a hobby because we were making a lot of money so we can afford to spend a little bit of money to chase it. And at the end of the day, um, it got the best of us and it was a very hard lesson to learn. Now, will I let everybody get away with not paying me a $3,000 bill? I mean, don't think that we're a pushover, but, um, I may not drive the ship as hard as we drove that one to try to collect it, you know, a simple lead and maybe a foreclosure, but, um, that's a hard lesson to learn. So sometimes you got to put your tail between your legs, eat a little Crow and walk. Right.
Speaker 2 00:14:23 And I think it happens to all of us, right? All of us at some point in time. And the whole point of this is just try to, to stop people from getting those ass beatings up front, or at least make them a little less now kind of changing topics here. Um, I want kind of your opinion, cause I know stucco is getting a bad rap out there. Um, what you think of stucco as a system, as a whole and um, is it something that people should feel safe putting on their
Speaker 3 00:14:51 Home? Well, I live in a stucco house, you know, four years ago I built, I built my home up on lake Conroe. It is stucco and stone and all four sides. Um, I've had it caulked and sealed twice. So I, I keep with my maintenance schedule. I believe that stucco is one of the most beautiful finishes. It's one of the most universal finishes to do things with, um, a brick home. You can't have the architectural details that you can with stucco, a Hardy plank cows. I mean, you're not going to build a million dollar home in port Hardy plank one and less space. And that's going to look cheap. It's going to look like you took the easy way out at the end and your home is not going to look like a million dollars. The most important thing was stucco was you've got to have the crew do it right the first time.
Speaker 3 00:15:37 You know, it needs to be waterproofed. It needs to, you need to maintain the integrity of the waterproofing as you're installing the additional components. You need to make sure that the customer understands that every two years, the caulking needs to be replaced in order to maintain a waterproofing around the windows. So if you could keep with your maintenance schedule, um, you can monitor your cracking, cracking as normal. I don't think there's a better system out there as far as the look and, and, uh, and what you can do with the universal, you know, items probably say
Speaker 2 00:16:11 The oldest, no demand, right? One of the oldest systems break
Speaker 3 00:16:17 Break might beat that, you know, way back to the settlers days. But, um, it's certainly been around for a long time and if it's done properly, I think there's, I don't think there's anything as beautiful stucco.
Speaker 2 00:16:30 So does ice residential, do you go, are you only in Houston? Are you, do you go throughout the state?
Speaker 3 00:16:34 I'm just kidding. Well, for our repairs, we are Houston and surrounding areas. So we'll work as far north as, as Willis. Um, we've done, we've done work as far Southeast as Galveston, but it seems that most of our work is centered around inside the loop. That seems to be where we get 90% of our work.
Speaker 2 00:16:55 Yeah. I think that, I think there's going to be a lot of it because I think in my opinion, from what I'm seeing is that some of these, um, townhome builders don't spend the money to have
Speaker 3 00:17:05 The right crew. Well, it's funny because a couple of weeks ago I was in a, I was in a newer development, um, south of NRG and we were repairing the terrorists. And while we were on the terrorist, we were watching townhomes, being built a block over. And I looked at my guys and said in 12 months, there's your next job.
Speaker 2 00:17:25 Exactly. And that's such a bad thing because like I'm watching around here, all these townhomes are now going up. I've had that experience with a particular home builder that didn't, you know, I had several calls. I know that home builder. Exactly. And so what he did instead of, instead of paying more money to get the right guys to his talk, because it is a great finish, he just took it off of, and he's putting up, you know, metal, metal siding or Hardy plank or, um, and it's, it's, it's not nearly as pretty or aesthetically pleasing to the
Speaker 3 00:17:59 Eye. Well, I think that, I think that builders miss, miss out on, um, the proper way to do this, spend the extra dollar or $2 a square foot upfront while you're building to make sure that it's waterproof and it's done right. Spend the money upfront. I know that it's a hard thing to pass that cost off to your homeowners, but you should, because five years down the road, you're not spending legal fees to defend yourself because you built it. Well, you know, 12 months down the road, you're not having to repair something because water got inside. So I think that, um, and I say this for commercial GCs, when they're building hotels and residential home builders, I say to everybody, spend the money up front to have it done. Right. And it's going to save you a ton of money on the backend. Um, but they just, they just don't seem to think they can pass the cost off. And I know that they can
Speaker 2 00:18:52 Well, yeah. And they, they think they're going to sell it and it's not going to be their problem. The problem is, is that a lawsuit is viable for a long time, especially if like you have lightened defects, like the water leaks in, um, from the stucco being bad and, and, you know, rots boards. And then they have up to 10 years to find that. So, you know, you're way better off doing a better on the front end than, um, than having to deal with us on the, on the backend. How do you sell that? You know, the, the, the best way I can sell it is with this particular home builder. I sent him cause I'd have some clients that have moved forward with litigation. Some very detailed, you know, stuck out questions about like that I consulted my expert on, but if he answers these things in negative, which he doesn't know, it'll be clear that he didn't do any diligence when he hired these guys. And then the D TPA clue. Then, then it's not just fixed the house and attorney's fees. It's fixed the house attorney's fees and treble damages. If I could prove that you didn't even do a scintilla of work, make sure that it's moving properly.
Speaker 3 00:19:55 Okay. Well, the one thing that everybody, every builder that's listening to this podcast should understand that when a repair companies involved such as ours and I start taking off the stucco, one of the things that I do is I photograph every single thing that we find. So if it was installed incorrectly, I'm going to have a picture of it. And we're going to have anchors to correlate all of the damages due to the incorrect install installation. Um, you're not going to be able to get away from the photographs. So, you know, I again spend the money up front, do it, right. And then you don't have to face the problems on the back end. I wanted
Speaker 2 00:20:33 To jump back to something you said earlier. Um, you said you, you read, like when you were in commercial, you read the contracts line by line. Did you feel better knowing what you signed or did it didn't matter either way?
Speaker 3 00:20:45 Well, you know, when I started reading contracts, when I was a contract administrator, I had 17 typical changes to every contract. Um, you know, of course, w you know, when you put in really an inter lineation, the contract and you initial it, you've got to put a line for the GC to initial above. Um, 90% of the contracts would come back signed, but none of my changes were ever initialed. So it tells me that they weren't going to change any of them. Did I feel better about changing them
Speaker 2 00:21:18 Or about knowing what you were agreeing to? Did you feel like you don't read it, you just sign it and send it back and you have no idea what it says, or you read it, they still don't accept your changes, but you know, what you signed, is there a difference between those two, I guess, is what I'm asking?
Speaker 3 00:21:32 Well, I mean, it's kind of a hard question to answer, because there were a lot of GCs that we had done multiple jobs with. So if I've got GCA that I do 10 jobs a year with, and I know that he's not gonna accept my changes, I'm not gonna read the second, third and fourth contract. The only thing that I'm going to look for is to make sure that the money is right. Cause I know he's not going to change it. Yeah. Um, you know, the typical AIA document that used to come with a cover letter that stated do not mark up this document. So, you know, you know, what's in the AIA from reading and time and time again. Um, but if you want the job, you really have no choice, but decided, I mean, no, I didn't feel good about the contracts. I thought that the contracts were one-sided.
Speaker 3 00:22:11 Um, you know, I, I think there was probably in the lifetime of us doing commercial work and we did a lot of it. You know, we did a couple of million every single year. And I think that you may have filed maybe three or four liens for us. Um, and I believe eventually we got paid on all, but all but one, we had a church that just simply stiffed us on the retention. Um, and there was nothing to go after, you know, we had the lien in place, but there was nothing to go after no foreclosure, they didn't have any money. The building was a metal, a metal building with a stucco facade over top of it. So it wasn't like they built this beautiful church. Um, and then of course the big one that we had was, um, not being paid on a hotel in the Woodlands because stones were falling off.
Speaker 3 00:22:59 You know, we went through the contract word for word and we, and we picked out everything and we determined, and it was proven that when the GC changed their scope of work from doing an all ethos hotel to having to put stone on, they forgot to change the steel stud framing. So there was a higher tensile strength and the weight of the stone couldn't be handled by the wall. Now you would think that that was easy thing to prove, and that we would be able to collect our retention, but we had the GC going against us because their client was the hotel owner. They wanted their retainer. So when I say that, you know, the GCs, aren't looking out for you, they, they expect you to be part of their team. You're bidding, you know, come on, pal, give us the best price you can.
Speaker 3 00:23:48 You know, we'll be a great team together. But when the chips fall, they only care about one thing and that's their client so that they get their money. So you're on your own. And at the end of the day, the insurance companies step in and state, well, we'll pay X because it's going to cost us X to litigate, whether you're right or you're wrong. So, um, no, I don't feel, I don't feel that there's a reasonable contract out there for any subcontractor to sign, unless it's his contract. And there's no way of GC is going to sign your contract. I can assure you of that.
Speaker 2 00:24:22 Uh, so having been both residential commercial, what do you have to say to somebody like you? I don't know, 20 years ago, 25 years ago, starting out, or when you decided, whenever you decided to start your own thing, what would you tell you that?
Speaker 3 00:24:39 Well, let's see, you know, my advice first off, you've got to find a good attorney. You've got to get your charter set up the proper way, and you've got to get your operating documents created so that you're protected upfront. Um, the second, second thing is spend the money for good general liability insurance and insurance policy that will pay to defend you in the event that you're sued. Um, most people starting out don't have deep pockets, and if you mess up and you get sued, um, you've gotta be able to have an outlet to go to otherwise. You'll wipe yourself out half a year's worth of operating expenses. Make sure that you've got that in the market. This is a flooded market. And if you come to start to work tomorrow in my industry, and you think that you're going to get business and be a force, I could tell you you're a hundred percent wrong.
Speaker 3 00:25:30 You know, Paul and I were in business together for 14 years, we survived longer than most partnerships. You know, most partnerships they stay are good for three to five years. Um, we survive 14 years. The last five to six is when we really started making money. And I'm not talking about I'm talking serious money, not just comfort, you know, we pay the bills. Um, but it took us a long time to get that point. Yeah. Um, I will also tell you don't ever talk bad about a competitor. You know, I believe that there are three people in the Houston market to provide quality repair service. And I will tell you exactly who those three people are. I speak to my competitors, you know, we, they call me, you know, we are always on top of who's busiest. Who's not, um, we refer work to each other.
Speaker 3 00:26:18 So if it, my bid is being compared and I'm talking to a homeowner that says, you know, I got a bid from two of your competitors. And they tell me who they are. I have no problem with saying, you know what? There are two of the greatest competitors I have without good competition. You can't stay in business. Um, if you're, if you're working for a general contractor, don't lie. You know, if it's Monday morning and half of crew can't show up, because Sunday was a party day, don't lie to them. I promise you when you've got 300 subs on a, on a job site that there's already been 15 flat tires on a Monday, don't be the 16th. You know, if you're working residential repairs or residential, um, building don't lie to your customer. If you make a mistake own it, fix it, move on, learn from it.
Speaker 3 00:27:05 And by all means, don't fight with a customer. You'll never win the fight. You know, you may get paid, you may get off the job, but then a Google review pops up. It says, what an asshole you were. And when that happens, you don't get rid of that Google review. So I would say that. And then I would say, um, if you have an attorney, make sure you understand what you're going to spend on a case, you know, go in, figure it out ahead of time, because you don't want to end up $40,000 out two years later when you could have walked away a lot earlier. So, um, those are the things that I would, I would say, and this is all from experience, you know, the harder and con you know, when you get your gray hair, you know, you finally stepped into that position of being a lot wiser. So, um, I think that, you know, Paul and I have learned a lot over the years and, um, you know, I think that if, if you just stick to some general principles, you can have a really good business.
Speaker 2 00:28:06 I agree. I agree. And thank you for all that great advice. Thank you for being on the podcast. I appreciate it. You guys, you know,
Speaker 3 00:28:14 I use your firm for a lot of stuff and, uh, it's, as a matter of fact, I was your very first client. If you recall, when we filed a lien for not being paid, went back in to, was it oh three, when you had first passed, the bar filed a lien for me, when I, when I used to have river Oaks stucco services, and it was a guy in, it was a guy in the Woodlands that you filed a lien for me. So we've been together for a long, long time.
Speaker 2 00:28:50 We've learned a lot of the same lessons. Well, I'm glad to see that you're happy, have beautiful house and are enjoying life because that's what it's all about.
Speaker 3 00:28:57 That's what it's all about. Enjoy life. Yes, it is.
Speaker 1 00:29:07 Thank you for listening to this episode of quick getting screwed. I hope you found it helpful. And if you like what you hear, please like us and follow our podcast. If you want further information. So you can find [email protected]
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