# Sub Pay



## Allout (Jun 18, 2015)

So I'm curious...what percent do people consider fair for a "regional" to take? I personally just ask what somebody wants to do the job and hope I can make money on top of that.


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## newreo (May 30, 2014)

don't work for regional


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## Allout (Jun 18, 2015)

newreo said:


> don't work for regional


So your telling me on any given day you cover all your work?


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## safeguard dropout (Apr 21, 2015)

If the regional was taking 70% would you work for them?

If that same regional was getting $1000 for a lock change, taking 70% and paying you $300, would you work for them?

Percentage means nothing. 

What goes in your pocket is everything.

If it isn't enough, don't do it.


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## Bigtrucker (Mar 18, 2014)

safeguard dropout said:


> If the regional was taking 70% would you work for them?
> 
> If that same regional was getting $1000 for a lock change, taking 70% and paying you $300, would you work for them?
> 
> ...



300 for just a knob or we talking dead bolt and knob


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## safeguard dropout (Apr 21, 2015)

Padlock. Keys are extra.


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## G 3 (May 3, 2015)

They get double sided tape on the hasp for that price... no screws what-so-ever.


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## Craigslist Hack (Jun 14, 2012)

I asked this same question no one answered. All I was trying to show was you can bounce from regional to regional even to some nationals but the math is never going to work.


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## GTX63 (Apr 12, 2012)

Allout said:


> So your telling me on any given day you cover all your work?


Short answer- What is fair for a regional to "take" is whatever you are willing to accept.

A GC uses employees and subs to cover their work under completely different terms, so a regional would not be applicable in this case.

If I told you I knew of three yards that need the grass cut will you send me a check for 20%?

The non private market for property preservation is one of the greatest and longest lasting pyramid schemes to exist in the United States.


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## Allout (Jun 18, 2015)

Ok...I'm asking if you sub work what % do you guys feel is fair to keep in this industry specifically. I don't do work for regionals nor am I a regional but sometimes I do sub overload work out. Just curious what people's thoughts were.


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## bigdaddy (Mar 3, 2013)

Allout said:


> Ok...I'm asking if you sub work what % do you guys feel is fair to keep in this industry specifically. I don't do work for regionals nor am I a regional but sometimes I do sub overload work out. Just curious what people's thoughts were.


Dude, you just don't GET it!
When working for a national or regional in this business THEY are going to tell YOU what a job pays. The problem is the amount they are willing to pay 9 times out of 10 is not enough to do the job YOURSELF and make a DECENT living. Now you want to SUB it out to someone else???? There is NO MONEY left for the poor sucker doing the work!!
If you would spend time finding direct work with the banks or local agents instead of asking the internet for the secret sauce maybe you can become successful in this business. Every other sucker before you that has worked for a regional HAS FAILED!
What do I think is a FAIR%?? 60-70% is always nice! But at least 50%
Everyone want to cry about how the BANK doesn't want to pay any money. FALSE! It's the middlemen that don't want to pay!
You see, I get my work DIRECT so I tell THEM what my price is.
And I don't TELL my subs what I am going to pay, I ask THEM for a bid, that's how a SUB-GC relationship works in the real world!
Once I have my sub price I charge the bank whatever I want, MINIMUM is double what I'm paying out. 
My carpet guy charges me $11.50 a yard, I charge the bank $24.00 a yard. 
My roofer charges me $7,500 for a roof, I charge $15,000
Mold sub charges me $15,000 I charge $35,000
Some work I do myself. They want an ingound pool demolished and filled in, I charge $12,000. I have excavator and skid steer and takes me 2 days, only thing I buy is 80-100 tons of dirt usually around $1,200 total cost.
So find better clients and you will make more money!


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## safeguard dropout (Apr 21, 2015)

bigdaddy said:


> ....I don't TELL my subs what I am going to pay, I ask THEM for a bid, that's how a SUB-GC relationship works in the real world!....


All of it a good post but.....there's your answer right there.


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## newreo (May 30, 2014)

Allout said:


> So your telling me on any given day you cover all your work?


Yes, this is what I am telling you. 
I am booked for 9 month ahead


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## Allout (Jun 18, 2015)

Well if you would read my first post those were my exact words. I do understand this industry very well I've been in it long enough. I never said my work was through nationals and it's definitely not from a regional. I simply made a post asking a simple question since there is plenty of "regionals" on here. If you read my first post I was not asking what I should be paid. I know what it takes to run my business and make a profit.


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## Craigslist Hack (Jun 14, 2012)

I actually tell my subs what I'm going to pay. Like I've got 1100 in labor for this roof can you make that work or should I call someone else?


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## Craigslist Hack (Jun 14, 2012)

newreo said:


> Yes, this is what I am telling you.
> I am booked for 9 month ahead



Congrats!! That is a great backlog.


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## oteroproperties (Aug 10, 2012)

Here's a question, what value as a regional would you bring to the table? Would you pay when the job is complete or make them wait 30, 60, or 90 days? What level of liability would the sub be exposed to? If they do the job right and you sign off on it, are you gonna kick the back charge back to the sub if the client gets a hair up its ass? What if you don't get paid? Would you pass that misfortune onto the sub? 

Sent from my SM-N920P using Tapatalk


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## newreo (May 30, 2014)

Allout said:


> Well if you would read my first post those were my exact words. I do understand this industry very well I've been in it long enough. I never said my work was through nationals and it's definitely not from a regional. I simply made a post asking a simple question since there is plenty of "regionals" on here. If you read my first post I was not asking what I should be paid. I know what it takes to run my business and make a profit.


Are you general contractor? GC can charge anything they want question is who is going to hire them for that price. You have to be licensed GC to sub out work and pull permits for your subs except specialty subs. Otherwise you become another layer middle man. 

Why would anyone work for regional, question number one. 
Why your subs can't go out and get hired directly? 

This is how the real world works: you ask your subs what would they charge and add 25% on top of it or 20% or 50%. Which ever works. 
Sometimes I do ask my subs: I have this amount can you do it or not.
I am general and we are investors, so I do have a lot of subs that we work with. It doesn't matter for them what I earn using them as I mostly pay them what they ask 
Does it make sense?


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## newreo (May 30, 2014)

Craigslist Hack said:


> Congrats!! That is a great backlog.


Thank you. I don't know if this is a really good thing or just sad, as there are not enough hours in a day and days in the month.


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## bigdaddy (Mar 3, 2013)

newreo said:


> Are you general contractor? GC can charge anything they want question is who is going to hire them for that price. You have to be licensed GC to sub out work and pull permits for your subs except specialty subs. Otherwise you become another layer middle man.
> 
> Why would anyone work for regional, question number one.
> Why your subs can't go out and get hired directly?
> ...


Exactly!
I don't consider myself a "regional" even though I probably gross more then most of them.
I am a GC. My clients hire me because I get it done, everything, everywhere, every time!
My subs are not 1 stop shops like most preservation guys.
I hire painters to paint, roofers to roof, carpenters to frame and finish, plumbers to plumb, flooring guys to install flooring, refinish guy to refinish hardwood, landscapers to landscape, septic guys to install septic, mold and asbestos guys, etc......
None of my subs could get the work directly with my clients because they are not GC, they are job specific subs.
What I have is a very large list of sub contractors who I have personally vetted to weed out the losers over the past 10 years. 
Most of my subs get well over 50% some upto 100% of their total income from my jobs!
I have never had one quit on me, I have fired a bunch! But no one has ever not answered my calls because I treat them fair, pay them upfront (yes I said upfront, or send check the day work is complete on 1-2 day jobs) and they get paid what they BID!
I am on every job overseeing it the way a GC should, that's where my value comes from and I charge a hefty price to make sure my clients get the best finished product.
A regional, national, middleman, whatever you want to call them just shuffles paper and takes 25% for doing nothing!
They are not on the job, dealing with the township when there is a problem, making sure the job is done correctly, paying UPFRONT!
They have NO PLACE in this business and only exist because stupid people continue to work for them!


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## bigdaddy (Mar 3, 2013)

Allout said:


> Well if you would read my first post those were my exact words. I do understand this industry very well I've been in it long enough. I never said my work was through nationals and it's definitely not from a regional. I simply made a post asking a simple question since there is plenty of "regionals" on here. If you read my first post I was not asking what I should be paid. I know what it takes to run my business and make a profit.


I guess I didn't realize what you were asking in your first post. You asked something like "How much % should a 'regional' charge"
I assumed you wanted to work for a regional and wanted to know what percent they should be stealing from you.
Just so I understand, YOU want to become a 'regional'?
Please see my post above. 
Do you want to become a 'regional' and just sign up for some national and shuffle work orders to some idiot and lay all of the risk on them, tell them what each job pays and take your 25%?
Or are you a GC who would like to sub work to job specific sub contractors?


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## JoeInPI (Dec 18, 2014)

Ok, the regional/national thing is kind of irrelevant on this one... I think what the OP is asking is:

I am getting $XXX.XX to do this job.
I'm booked out, so I'm going to hire a sub to do it.
What is a fair amount to hold back for myself after paying him to do the job.

As was said previously, I use the "I have $XXX.XX I can pay for this one, can you handle it for that? If not, let me know and I'll have it reassigned" or something similar. There isn't really a rule that I see works for everything, and percentages don't really work for the same reason mentioned that it depends on how much the gross profit is. Different starting points require different solutions.

It also depends on who the customer is, how bad I want their other work, etc., some jobs I want to keep more for the hassle I know I'll have, some I pass through with no profit if the benefit outweighs the cost of having the work managed by my company for that particular customer.


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## bigdaddy (Mar 3, 2013)

JoeInPI said:


> Ok, the regional/national thing is kind of irrelevant on this one... I think what the OP is asking is:
> 
> I am getting $XXX.XX to do this job.
> I'm booked out, so I'm going to hire a sub to do it.
> ...


What you are saying is crazy talk, are you trying to say I have to use my own brain to figure it out???
GIVE ME THE DAMN SECRET FORMULA, I KNOW YOU HAVE IT!
How come no one every wants to help me out!


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## GTX63 (Apr 12, 2012)

Nice try Plankton!


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## newreo (May 30, 2014)

bigdaddy said:


> Exactly!
> I don't consider myself a "regional" even though I probably gross more then most of them.
> I am a GC. My clients hire me because I get it done, everything, everywhere, every time!
> My subs are not 1 stop shops like most preservation guys.
> ...


Yes, you mentioned another point that I forgot to bring up. GC gets paid for managing the job and it's a lot of work. 
I spend hours ordering materials, selecting materials, managing my subs, hiring, firing, sight management. There is a lot of labor involved in the projects and this is what GC is getting paid for - management


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## Allout (Jun 18, 2015)

bigdaddy said:


> I guess I didn't realize what you were asking in your first post. You asked something like "How much % should a 'regional' charge"
> I assumed you wanted to work for a regional and wanted to know what percent they should be stealing from you.
> Just so I understand, YOU want to become a 'regional'?
> Please see my post above.
> ...


I was just merely trying to ask what the regionals on here which there is quite a few were taking for a percentage. This post has nothing to do with being GC this is preservationtalk.com not contractortalk.com. So yes the question does exclusively apply to this industry; which for the most part is run on a flat rate pricing. So percentage is a very large part of the industry.


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## madxtreme01 (Mar 5, 2015)

Allout said:


> I was just merely trying to ask what the regionals on here which there is quite a few were taking for a percentage. This post has nothing to do with being GC this is preservationtalk.com not contractortalk.com. So yes the question does exclusively apply to this industry; which for the most part is run on a flat rate pricing. So percentage is a very large part of the industry.



Now I understand why your asking the question this way. I hate to say it, but your suppliers have been lying to you all this time. There is no "standard" percentage. The nationals and regions want you to believe there is one, but the discount is off of their allowables. Do you really think that they are getting 50% of hud allowables? There is nothing in this industry that is cut and dry. You need to do what works best for you. Your not going to do a $15k rehab and only take 5-10% to oversee a 3-4 week job are you? On the other hand if you are subbing a 3 acre grass cut that is paying you $600, you may only take $50 for doing the paperwork. The amount taken depends on the amount of involvement. I also think that if it is someone that you use regularly you need to take care of them to make sure they will want to work for you in the future and put you at the top of their priority list. If it's a 1 time thing, then it really doesn't matter other than finding someone to do the job correctly.


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## GTX63 (Apr 12, 2012)

Allout said:


> I was just merely trying to ask what the regionals on here which there is quite a few were taking for a percentage. This post has nothing to do with being GC this is preservationtalk.com not contractortalk.com. So yes the question does exclusively apply to this industry; which for the most part is run on a flat rate pricing. So percentage is a very large part of the industry.


The only difference between us and contractortalk is we allow pricing discussion. That's it.
While kicking the horse carcass again, I'll repeat that the preservation industry is no different that installing siding and windows. You can sign up to be a contractor with Lowes or Home Depot if you wish to work for their money and rules too.
The sub pay question has been answered several times. Figuring O&P has many variables depending on job, location, materials, etc. It's fluid with only one constant-that I profit.


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## JoeInPI (Dec 18, 2014)

newreo said:


> this is what GC is getting paid for - management


If that is what SG is getting paid for, is there way to class action them representing "society" for Management Malpractice? lol!


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## newreo (May 30, 2014)

JoeInPI said:


> If that is what SG is getting paid for, is there way to class action them representing "society" for Management Malpractice? lol!


If one could find an attorney that would do class action against SG, which we tried, I will be waiting in the line to sign up this is how much they pissed me off in the last 6 month of us working for them last year. 
There was class action against FAS. These attorneys were collecting data on SG but for some reason it didn't go any further than that


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## newreo (May 30, 2014)

GTX63 said:


> The only difference between us and contractortalk is we allow pricing discussion. That's it.
> While kicking the horse carcass again, I'll repeat that the preservation industry is no different that installing siding and windows. You can sign up to be a contractor with Lowes or Home Depot if you wish to work for their money and rules too.
> The sub pay question has been answered several times. Figuring O&P has many variables depending on job, location, materials, etc. It's fluid with only one constant-that I profit.


Exactly and this is what I tried to deliver as well. 
Why there is a misconception about this industry that it's somehow different from construction in general? 
SG and others put themselves in odd position where they act like GC but then they should really show up on site themselves and pull general permits, but they minimize their role to middle man which is wrong on many levels. when they don't manage the job properly they put liability on the contractor that did the job. This is being brought on all wrong level many years ago when foreclosure was booming.


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## madxtreme01 (Mar 5, 2015)

newreo said:


> Exactly and this is what I tried to deliver as well.
> Why there is a misconception about this industry that it's somehow different from construction in general?
> SG and others put themselves in odd position where they act like GC but then they should really show up on site themselves and pull general permits, but they minimize their role to middle man which is wrong on many levels. when they don't manage the job properly they put liability on the contractor that did the job. This is being brought on all wrong level many years ago when foreclosure was booming.



The problem here is the unrealistic timelines to get stuff done. Sometime last year I got a roof replacement for SL and it was due 2 days later. Should I start it without pulling the proper permits? Oh and it was the beginning of spring so it was raining every other day. I told them that I needed 2 days to do the roof. I am not a roofer and can't work as fast as a roofing company with 6 guys on the roof. I work myself and a helper or I sub it out. So I had my guy rip the roof and inspect the plywood and the next day a roofing company was going to put the roof back on. Am I supposed to run to the store to get the material at 9pm when the order came in, rip the roof and replace it, and worry about the permits after it was done? Don't think so.... Why should we rush around like iddiots to get work done and cut corners because we have to in order to complete the work on time and not to mention still be profitable while you take your sweet time getting around to cutting a check. When this biz starts to pay upon completion, I'll work like there is a flame under my behind. Until then, the work order is late? Oh well, I have a family and would like to spend time with them. Your office is open 9-5, why should mine never close. Can't wait until I am busy enough that I can get rid of this type of work completely.


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## newreo (May 30, 2014)

madxtreme01 said:


> The problem here is the unrealistic timelines to get stuff done. Sometime last year I got a roof replacement for SL and it was due 2 days later. Should I start it without pulling the proper permits? Oh and it was the beginning of spring so it was raining every other day. I told them that I needed 2 days to do the roof. I am not a roofer and can't work as fast as a roofing company with 6 guys on the roof. I work myself and a helper or I sub it out. So I had my guy rip the roof and inspect the plywood and the next day a roofing company was going to put the roof back on. Am I supposed to run to the store to get the material at 9pm when the order came in, rip the roof and replace it, and worry about the permits after it was done? Don't think so.... Why should we rush around like iddiots to get work done and cut corners because we have to in order to complete the work on time and not to mention still be profitable while you take your sweet time getting around to cutting a check. When this biz starts to pay upon completion, I'll work like there is a flame under my behind. Until then, the work order is late? Oh well, I have a family and would like to spend time with them. Your office is open 9-5, why should mine never close. Can't wait until I am busy enough that I can get rid of this type of work completely.


I remember these issues really well. GC should evaluate the condition and coordinate real time lines. 
We had contract with one national company (not P&P) that tried to pull similar BS, but at least they were showing up on site, we dumped them soon after jobs were done. They actually got the 1st place before SG if you can imagine that being possible. 
Don't do any nationals since then


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## GGC (Feb 5, 2013)

bigdaddy said:


> Dude, you just don't GET it!
> When working for a national or regional in this business THEY are going to tell YOU what a job pays. The problem is the amount they are willing to pay 9 times out of 10 is not enough to do the job YOURSELF and make a DECENT living. Now you want to SUB it out to someone else???? There is NO MONEY left for the poor sucker doing the work!!
> If you would spend time finding direct work with the banks or local agents instead of asking the internet for the secret sauce maybe you can become successful in this business. Every other sucker before you that has worked for a regional HAS FAILED!
> What do I think is a FAIR%?? 60-70% is always nice! But at least 50%
> ...


bigdaddy, was hoping you could enlighten on finding these banks and agents. Just old school walk in and ask to speak with someone?


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## bigdaddy (Mar 3, 2013)

GGC said:


> bigdaddy, was hoping you could enlighten on finding these banks and agents. Just old school walk in and ask to speak with someone?


You have to talk to your local agents. They are assigned the properties directly from the banks or servicing companies. You have to get your foot in the door with them first, then once you prove yourself ask them for some contact information of their clients. Most of them will tell you that they don't handle any of that stuff and companies like safeguard, mcs, ams, etc... handle all of the work, however not all do and even the ones that do will use you when safeguard screws something up! Each area is going to have the big time REO agents, if you have been in the business long enough to try and get direct work you should be able to recognize these agents. Along with the big shots, there will be dozens to hundreds of smaller agents who handle REO properties depending on the population of your coverage area. You can call, email, or show up to EVERY real estate office in your area, just ask for the REO agent, every office has one agent that handles all REO properties. Like I said, you have to get the agent to actually give you some work orders, once you have work then make sure you DO A GOOD JOB! Keep them happy and the work will FLOW! Once you have an agent who's client allows them to choose a contractor, ask them who the client is and if they would give reference and contact the client directly, or once you know the client try to find other agents who get assigned properties from that client and contact them for work. Once you get started it really snowballs. One word of advice, DON'T TRY TO GO FOR VOLUME!!!! Start with ONE agent, make sure that agent thinks you are the best thing since sliced bread! If you feel you can handle more, reach out to agents till you land a second agent, then STOP! Make sure you are willing to drop EVERYTHING AND ANYTHING to get a job done. These people are NOT like any regional or national, they will APPRECIATE when you go above and beyond. It does not take allot of volume to make money direct. Once you feel comfortable, take on more agents but you don't need allot of them to make money.

Here is how my day went today. I got an email from an agent last night to rekey 4 properties and get bids.
I rekeyed all 4 @ $200 each
$800 with about $100 in locks and boxes, my wife and I went out after we put the kids on the bus at 8:30 am, finished last house at 1:00 pm, ate lunch and was back home at 2:30pm

Property 1 $1,800 trashout bid, about 25 cubic yards $250 initial lawn bid, $350 smoke/co bid

Property 2 $400 trashout bid, some stuff in kitchen cabinets, few boxes in basement, 4 gallons of paint, wouldn't even fill up my bed in pickup,$250 initial lawn bid, $350 smoke/co bid

Property 3 $450 trashout bid, was a cash for keys that they left everything on the curb, probably about 8 cubic yards all stacked nicely for me to toss into my dump trailer in about 5 minutes, $250 initial lawn bid, $350 smoke/co bid

Property 4 $800 trashout bid, about 10 cubic yards, $250 initial lawn bid, $350 smoke/co bid, $2,200 shed removal bid

I should get all jobs approved and that will give me a nice week ahead.
I don't get allot of preservation work, it seems to come in waves like this, I get 4-5 initial rekeys then spend the next week or so doing trashouts or health and safety work.
The rest of the time I am bidding rehab work and checking on my big jobs.


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## bigdaddy (Mar 3, 2013)

I talk all the time about working direct. While it's true that I do get allot of work directly from the client (most larger jobs, rehabs, etc..), allot of work also comes via agents (smaller repairs, trashout, rekeys, lawns, etc..). It is still direct work since the agent does not take any money out of your pocket! They request a bid from you and pass it on to the client untouched.
Sometimes the agent will pay you and then get reimbursed from the client, sometimes they have a pass thru account meaning the agent will be the one requesting the bid, sending you approvals, you send the invoice and photos to the agent, they submit to client and the client pays you directly. Either way, you will essentially be working "Direct" with the client (bank, servicers, investor, etc...) without a middleman taking 50% of your money!

And by the way, besides Wells Fargo not one of my clients has EVER been mentioned on this site! And I know most of them are nationwide!
So your tip of the day is if you find a client and do a search on this site and someone is asking about them, they are probably not the main client!
If they have the words "Preservation" "Property" "Vendor" "Contractor" in their name, then they are most likely 99% of the time MIDDLEMAN
If they have the words "Financial" "Bank" "Trust" "Credit" "Mortgage" "Investments" "Holdings" "Capital" in their name, then they are most likely 99% DIRECT CLIENT!


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## JoeInPI (Dec 18, 2014)

bigdaddy has exactly captured how you should be doing work. That is what we do, and it works very well, as you can see.


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## GGC (Feb 5, 2013)

bigdaddy thanks for shedding some light on this. Much appreciated


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