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  1. #1
    Jim Adams's Avatar
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    Default multi inspector firm

    I am considering enlarging my inspection business by adding an inspector or 2. My question is about paying these inspectors. So for you experienced multi-inspector guys, my questions are...................
    What is a fair percentage to pay, maybe a going rate. I will only be looking at experienced inspectors with a minimum of 1000 inspections.
    I will pay E&O, $300/mo. car allowance, $50 phone allowance, and they will will be an employee. They will use their own tools.

    Thanks in advance for your input.

    Jim

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  2. #2
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    Default Re: multi inspector firm

    Welcome to the board, Jim.

    Lots of views on the thread but no answers.... I think you'll find most inspectors are one or two man shows so there's not a lot of info out there on multi-inspector outfits. Especially these days with things being slow. I worked for a multi-inspector outfit when I started at this and ended up buying the company with one other employee when the owner retired so I have a bit of experience with your question.

    The short answer is there's no standard and it's not easy to get or keep quality people. To make it worth your while you need to make a certain % on what any inspector does and a lot of quality guys are not willing to do the job for what's left. Particularly in this market when there's not such thing as regular work... or any work from day to day, week to week.

    If I had to throw out a number I'd say plan to pay in the ballpark of 1/2 the fee but that's a very loose figure. A lot depends on what you provide in way of benefits and support and how well trained a guy is.

    One thing in your question did catch my eye though.... Do you actually have enough business to think if hiring someone in the current market? If so, I need to move to Arizona I hear the weather's nice down there.... and there're no crawl spaces


  3. #3
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    Default Re: multi inspector firm

    When my brother and son worked for me as HI, I paid out a 70/30 split.

    All I paid out for them was there cell phone bills, continuing education and license fees. They paid their own medical and taxes.

    Sometimes I throw in some gas money or pay out more when we had a big week.

    Now I work only for myself but have been considering hiring another person or two.

    rick


  4. #4
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    Default Re: multi inspector firm

    Quote Originally Posted by Rick Hurst View Post
    When my brother and son worked for me as HI,

    They paid their own ... taxes.
    That may have worked because they were your brother and son, but you could very quickly get caught in the IRS of employee/sub contractor difference and end up having to go back and pay penalties, taxes, and you name it for not having listed them as "employees" and paid everything you should have paid and did not because you considered them "sub contractors".

    A LOT of contractor, inspectors, and other business people in like businesses find themselves on the losing end of the "*I* called them sub contractors" / "the IRS calls them employees" dispute.

    With home inspections, bit the bullet and make them "employees" and pay everything, they really are "employees".

    Jerry Peck, Construction / Litigation Consultant
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  5. #5
    Kevin Luce's Avatar
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    Default Re: multi inspector firm

    I have found that hiring an employee or a sub-contractor is hard to do since finding the right person and dealing with the financial obligations are difficult. Even though I'm keeping my options open, I feel the best thing for my company is to become partners with somebody else that's in a different field yet in the same boat as I am. So I'll have my department and he'll have his but when we need help or the other person is slow, the other can jump in.

    Always keeping my options open.


  6. #6
    Ted Menelly's Avatar
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    Default Re: multi inspector firm

    Quote Originally Posted by Jerry Peck View Post
    That may have worked because they were your brother and son, but you could very quickly get caught in the IRS of employee/sub contractor difference and end up having to go back and pay penalties, taxes, and you name it for not having listed them as "employees" and paid everything you should have paid and did not because you considered them "sub contractors".

    A LOT of contractor, inspectors, and other business people in like businesses find themselves on the losing end of the "*I* called them sub contractors" / "the IRS calls them employees" dispute.

    With home inspections, bit the bullet and make them "employees" and pay everything, they really are "employees".

    What exactly are you talking about. You can have a subcontractor agreement written up anyway you wish.

    Paying what he should have????

    I don't get it.

    I had so many people working for me over the years and all were subcontractors and I had different agreements with all of them. They got a 1099 at the end of the year and paid their taxes, well, if they wanted to pay their taxes but that is my point. They were subcontractors and were responcible for their own paying of what ever.

    There is no getting caught up in anything.


  7. #7
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    Default Re: multi inspector firm

    Ted, you can call anyone a subcontractor but the IRS has specific rules that defines a subcontractor vs. an employee for tax purposes. When it gets into a contest of what you owe in taxes the IRS makes the rules (not really supposed to be since that is the job of congress) but you get the idea.

    What I found out when reading up on this was that it is almost impossible to qualify as a subcontractor if you work for only one company.
    If the relationship is employee rather than subcontractor then all the tax consequences follow.

    Jim Luttrall
    www.MrInspector.net
    Plano, Texas

  8. #8
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    Default Re: multi inspector firm

    Though I don't have anything in particular against multi-inspector firms, it seems to me that in nearly each instance they begin with a fairly competent inspector and degenrate from there by dilution.

    A good friend of mine who used to own a chain of BBQ restaurants in Fort Worth once told me that he would never have expanded his operation if he had understood the simple idea that, "Nobody else will ever cook your BBQ the way you do."


  9. #9
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    Default Re: multi inspector firm

    Quote Originally Posted by A.D. Miller View Post
    Though I don't have anything in particular against multi-inspector firms, it seems to me that in nearly each instance they begin with a fairly competent inspector and degenrate from there by dilution.
    While that statement is likely true, that can be applied to almost every business that has employees. The main question is how much degeneration will occur compared to the benefits of having that/those employee(s). As long as there is an incentive for the employee to want to keep his job, I would think he would keep trying to do a good job.


  10. #10
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    Default Re: multi inspector firm

    A good friend of mine who used to own a chain of BBQ restaurants in Fort Worth
    Aaron, I thought you did not associate with the unwashed from Bovine City

    Jim Luttrall
    www.MrInspector.net
    Plano, Texas

  11. #11
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    Default Re: multi inspector firm

    Quote Originally Posted by Jim Luttrall View Post
    Aaron, I thought you did not associate with the unwashed from Bovine City
    Jim: Well, at the time I met him he was semi-retired living in Mims, which is in Marion County - Deep East Texas. Ernie made the best BBQ chicken and turkey in North Texas, so I could not bring myself to hold his Cow Town origins against him.


  12. #12
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    Default Re: multi inspector firm

    Hi Guys,

    Thanks for your responses. I, too, am a single operator and I like it like that, but I'm nearing ret. age and want to keep the business going strong and would like to climb on roofs a little less.
    Actually things have been pretty good and business has picked up substantially.
    I guess I'll have to crunch the numbers and see what I come up with. I have a feeling that with what I'm willing to contribute the # will come up somewhere between 40-50%. But at this point I don't know.

    Jim


  13. #13
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    Default Re: multi inspector firm

    If you have not already, you might consider using Brian's cost of business program to help in your considerations.

    Jim Luttrall
    www.MrInspector.net
    Plano, Texas

  14. #14
    Ted Menelly's Avatar
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    Default Re: multi inspector firm

    Quote Originally Posted by Jim Luttrall View Post
    Ted, you can call anyone a subcontractor but the IRS has specific rules that defines a subcontractor vs. an employee for tax purposes. When it gets into a contest of what you owe in taxes the IRS makes the rules (not really supposed to be since that is the job of congress) but you get the idea.

    What I found out when reading up on this was that it is almost impossible to qualify as a subcontractor if you work for only one company.
    If the relationship is employee rather than subcontractor then all the tax consequences follow.
    And to think the irs is not even a gov agency. It is in fact the most powerful non gov agency/business in the world. They certainly do act like the are the government and have more power the the goverment to snatch anything away from you that they please if they are in the belief that you owe something. That is in fact how they get paid. The more they collect the more the get on top of there contract with the government.

    Last edited by Ted Menelly; 05-07-2009 at 10:26 AM.

  15. #15
    Richard Stanley's Avatar
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    Default Re: multi inspector firm

    Just my opinion. 40 - 50 % is probably not going to cut it - very long - so you will contantly be 'starting over'.

    If you are simply trying to avoid climbing and crawling, I suggest you hire a caddy or two that can do that for you. They can take an ample # of pics so that you can properly evaluate without actually going into or on to those areas.


  16. #16
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    Default Re: multi inspector firm

    Quote Originally Posted by Jim Adams View Post
    I, too, am a single operator and I like it like that, but I'm nearing ret. age and want to keep the business going strong and would like to climb on roofs a little less.

    Jim,

    Take on a partner, let him buy/earn his way into an ownership position, with him getting more each year and you getting less each year, at some point, though, you will need to be willing to step aside and let him buy you out of your remaining share.

    I tried to find anyone who would come down to South Florida and buy my business, or work into a partnership role like that, but no one was interested. Also, my business was high end homes and heavily into code, not something a newbie could start up in, and not something that someone who was already established wanted to change and do - in effect I had positioned my market niche such that there were no takers, even for basically no cost. So I gave my phone number to another inspector (we had worked closely together for several years in basically the same market and his secretary had been answering my phone), closed my business, and moved.

    Jerry Peck, Construction / Litigation Consultant
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  17. #17
    Ted Menelly's Avatar
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    Default Re: multi inspector firm

    Quote Originally Posted by Richard Stanley View Post
    Just my opinion. 40 - 50 % is probably not going to cut it - very long - so you will contantly be 'starting over'.

    If you are simply trying to avoid climbing and crawling, I suggest you hire a caddy or two that can do that for you. They can take an ample # of pics so that you can properly evaluate without actually going into or on to those areas.
    There is no law saying that you cannot have an assistant. I know it gets a little more involved depending on what your state has to say about it but again an assistant is not what someone can dictate to you as far as qualifications. A picture says a thousand words. I had an assistant that helped with putting info into the report and then I just went over it. I know your assistant would be actually looking at somthing but you would be directing the camera.

    I agee. There are little ways to slightly skirt around some finer points of rules and regs. Now, it might raise the liability a smig but if handled properly I doubt it.


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    Default Re: multi inspector firm

    Something I didn't mention in my initial response is the getting a non-compete agreement signed from your employees. This is also a big difference between independent contractors (1099 workers) vs. actual employees (W-2). With independent contractors you have a much tougher time getting a non-compete agreement to stick.

    You can just turn into a free training program for new inspectors if you don't have a non-compete clause.


  19. #19
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    Default Re: multi inspector firm

    The company I work for has four full time inspectors. We are paid on a 50/50 split. We are reimbursed for office supplies and the company pays for 50% of any paid training. We are 941 employees, meaning the company withhold and pays taxes. The employees are responsible for their own gas and medical.

    Our company continues to grow, we added our fourth inspector in 2008. The number of inspections I have conducted so far in 2009 is up 40% over last year and last year was my best as an inspector. I find this arrangement works very well for me.

    I am fortunate, that the guy I work for is highly ethical, a trainer for a national inspector training school, very fair and all the employees are working toward the same goal. Quality inspections, conducting business in an ethical manner, getting out and marketing the company.

    I have been approached by another multi inspector company and the compensation offered was 35% of the fee and the company pays for medical insurance. No thanks.


  20. #20
    Ted Menelly's Avatar
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    Default Re: multi inspector firm

    Quote Originally Posted by Matt Fellman View Post
    Something I didn't mention in my initial response is the getting a non-compete agreement signed from your employees. This is also a big difference between independent contractors (1099 workers) vs. actual employees (W-2). With independent contractors you have a much tougher time getting a non-compete agreement to stick.

    You can just turn into a free training program for new inspectors if you don't have a non-compete clause.

    If one works in a right to work state those agreements are about useless no matter what type of employee or sub one is.


  21. #21
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    Default Re: multi inspector firm

    Quote Originally Posted by Matt Fellman View Post
    Something I didn't mention in my initial response is the getting a non-compete agreement signed from your employees. This is also a big difference between independent contractors (1099 workers) vs. actual employees (W-2). With independent contractors you have a much tougher time getting a non-compete agreement to stick.

    With sub contractor YOU CAN'T HAVE a "non-compete" agreement, if you do, you are stating that they ARE NOT "sub contractors".

    Not sure why this issue keeps being discussed as such - think about it - IF THEY ARE "sub contractors" it mean YOU DO NOT CONTROL THEM. You through a "non-compete" on them and THEY ARE NOW YOUR "EMPLOYEES".

    It really is that simple.

    Jerry Peck, Construction / Litigation Consultant
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    Default Re: multi inspector firm

    That's kind of what I said.... if they are independent you have a tough time putting a non-compete. I guess I should have said an impossible time. I really don't know as I've never had independent contractors.

    As for getting it to stick.... I've heard people say they're easy to get out of. There are some constructive ways to write it that makes it more likely to hold. Basically, you can't stop someone from making a living. If you only restrict them to your immediate area there is a better chance of it holding up.

    The best course of action is to just be a good place to work and take care of your people and they won't want to leave.


  23. #23
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    Default Re: multi inspector firm

    Quote Originally Posted by Matt Fellman View Post
    That's kind of what I said.... if they are independent you have a tough time putting a non-compete.
    But that was not what I said.
    I guess I should have said an impossible time.
    THAT was what I said.

    Jerry Peck, Construction / Litigation Consultant
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  24. #24
    Steven Meyer's Avatar
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    Default Re: multi inspector firm

    [QUOTE=Jim Adams;83427]I am considering enlarging my inspection business by adding an inspector or 2. My question is about paying these inspectors. So for you experienced multi-inspector guys, my questions are...................
    What is a fair percentage to pay, maybe a going rate. I will only be looking at experienced inspectors with a minimum of 1000 inspections.
    I will pay E&O, $300/mo. car allowance, $50 phone allowance, and they will will be an employee. They will use their own tools.

    Thanks in advance for your input.

    Jim


    I would have to wonder, if they have 1000 inspections under their belt, WHY would they want (or need) to go to work for company???


  25. #25

    Default Re: multi inspector firm

    Lotsa different ideas.

    My wife and I owned a multi inspector firm for over 25 years. It ranged in size from 4000 inspections per year to 2000 at different times with between 7 and 14 employees. The formula was simple. We paid a salary, health insurance, E&O insurance, we provided a vehicle and maintained it, paid for all gas and we had a pension plan. The men worked a five day week but had Saturday duty on a rotating basis. (two men worked on Saturday) We also paid for two weeks vacation and 5 sick days, and those numbers went up depending on the years of service with the company. We also paid for ASHI dues both nationally and for the chapter. Since God decided not work on Sunday we followed his lead.

    In exchange, when we were busy the employees worked their asses off and when we were slow they canvassed and marketed or worked on their golf game.

    You cannot train an inspector and not have a non-compete agreement. We had a two year non compete which was upheld in court twice. These agreements are defensible in all states if properly written. I charged higher fees than most of you charge today. We were charging higher fees 15 years ago than many of you charge today. We ran a highly profitable business using the above formula and were very successful financially.

    What has occurred over the years is a transformation of the profession to a trade because newbies only have one way to get into the business. Lower fees. I am not sure anyone can make the kind of money we made in the current market for Home Inspections. The competition is one of price and not quality. (I think Jerry will know what I am talking about.) The "profession" should have $500.00 minimums for houses with prices going up based on house value. Charging by rooms or square feet sucks. If a roof on a 2 mil house is bad, it matters not how many square fee or how many rooms it has. The roofing contractor will quote a replacement price much higher than on a similar sized house that sells for 500k. 30 years ago all the guys getting into the business were banging their heads to figure out ways to charge more. Sadly, I am not sure that a new multi inspector firm can make the same kinds of profit today, that we made back in "the day".

    If you hire a sub-contractor and he only works for you the IRS will get in your face because he is not a true sub. A true sub will work for others or have other legit businesses. You have to give an employee a decent wage so he is comfortable and not looking to cheat you or compete against you.

    Hope this helps.


  26. #26
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    Default Re: multi inspector firm

    Hi John,

    (bold underlining is mine)
    Quote Originally Posted by John Ghent View Post
    The formula was simple. We paid a salary, health insurance, E&O insurance, we provided a vehicle and maintained it, paid for all gas and we had a pension plan.

    You cannot train an inspector and not have a non-compete agreement. We had a two year non compete which was upheld in court twice. These agreements are defensible in all states if properly written.
    The bold, underlined, part is key, in part, to a successful non-compete and successfully defending it.

    If you are paying them hourly, commission (per-inspection, or some other basis other than salary, they you will find it harder to defend a non-compete as, with a salary, you are paying them for "reporting to work" and working as needed. Once you start paying them on another basis, you are effectively changing them from "full time" to "part time" and that is the first step to not being able to enforce a non-compete - you are "forcing them" to find other income elsewhere, thus your non-compete is out the window - YOU "broke it" yourself.

    What has occurred over the years is a transformation of the profession to a trade because newbies only have one way to get into the business. Lower fees. I am not sure anyone can make the kind of money we made in the current market for Home Inspections. The competition is one of price and not quality. (I think Jerry will know what I am talking about.)
    While John and I priced our services differently, he was a multi-inspector firm and I was a single inspector firm. John's method had built-in wage increases (during the good decades and good markets, not when there is a recession and the bottom drops out of home prices), whereas I had to "give myself a raise" whenever I felt my niche would sustain it, and my niche did sustain it.

    If you hire a sub-contractor and he only works for you the IRS will get in your face because he is not a true sub. A true sub will work for others or have other legit businesses. You have to give an employee a decent wage so he is comfortable and not looking to cheat you or compete against you.
    So true, John, so true.

    If he is a sub contractor, that means he does not "work for you", he "works for anyone", so how can you even think of a non-compete with that arrangement? It does not work and is not defensible. You try to enforce it and all he has to do is file a compliant with the IRS that you did not contribute on his behalf as required and ... you will be in real deep do-do with fines, penalties, reports not filed on time, withholding not withheld, you name it. Then, after the IRS is through with you, the state will come after your for penalties and fines for not having workers compensation insurance, and whatever else they require. Just will not be worth it, guys.

    Most of the old guard charged based on sales price, and for good reason: the more a house cost, the more liability you are likely to have as they higher income person who can afford the higher price house will have higher expectations ... and their attorneys' numbers on speed dial.

    Not stating what to set your minimum at as that could be construed as leading to discussing price fixing, but John pretty much covered it - the prices today as no where near high enough to do a thorough inspection and make a profit.

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  27. #27
    Kevin Luce's Avatar
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    Default Re: multi inspector firm

    Strange. You guys have simplified the employee/sub-contractor thing but I know a law firm that hired a paralegal as a sub-contract. She had her own desk, had the same hours as my wife did (time varied when they left the building), but this lady received a fixed paycheck. When she quite, this same law firm prevented her from working at another law firm she got hired at in the same city.

    I don't know anything about this subject except the basics but it is strange that a law firm can hire somebody like that and enforce a no compete contract plus treat her the same as the other paralegals while working in the same building.

    Reason I know this is because my wife and her were work friends and my wife told me that this lady was mad.

    I am the type of person that likes to see things in black and white but as everyone knows, there is a lot of gray in this world.


  28. #28
    Kevin Luce's Avatar
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    Default Re: multi inspector firm

    My wife and I owned a multi inspector firm for over 25 years. It ranged in size from 4000 inspections per year to 2000 at different times with between 7 and 14 employees.
    Wow, what a market. 7 guys averaging 286 inspection a year. And when the market is great, you could hire 14 guys averaging the same number of inspections. I wish this area would allow me to set up 7 to 14 inspections per day during the week.

    You cannot train an inspector and not have a non-compete agreement. We had a two year non compete which was upheld in court twice. These agreements are defensible in all states if properly written. I charged higher fees than most of you charge today. We were charging higher fees 15 years ago than many of you charge today. We ran a highly profitable business using the above formula and were very successful financially.
    You write everything in past tense. I take it that your not doing home inspections anymore.

    What has occurred over the years is a transformation of the profession to a trade because newbies only have one way to get into the business. Lower fees. I am not sure anyone can make the kind of money we made in the current market for Home Inspections. The competition is one of price and not quality. (I think Jerry will know what I am talking about.) The "profession" should have $500.00 minimums for houses with prices going up based on house value. Charging by rooms or square feet sucks. If a roof on a 2 mil house is bad, it matters not how many square fee or how many rooms it has. The roofing contractor will quote a replacement price much higher than on a similar sized house that sells for 500k. 30 years ago all the guys getting into the business were banging their heads to figure out ways to charge more. Sadly, I am not sure that a new multi inspector firm can make the same kinds of profit today, that we made back in "the day".
    The price of the house reflecting the price of the home inspection doesn't work well around here. There can be 900 sq ft house in the town of Munster costing $120,000 (factor for cost is directed towards other things besides the house). While that same 900 sq ft house that is 5 minutes down the road in the city of Gary might cost $60,000. If I was going to be getting sued by either inspection, they both are likely going to want the 30 year roof shingles installed. Basing the price on what I would have to pay out if I screwed up is a little strange. Besides, it doesn't matter if I go by square footage, price of the house or any other method, the price of the inspection is the price of the inspection and most clients don't care how you got to that price.

    I feel being a licensed state now, hiring has become a lot harder to do. Some of these companies use to hire summer help when there are a lot more people buying houses. That has reduced dramatically since licensing.


  29. #29
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    Default Re: multi inspector firm

    Quote Originally Posted by Kevin Luce View Post
    You write everything in past tense. I take it that your not doing home inspections anymore.
    John sold his business and retired.

    The price of the house reflecting the price of the home inspection doesn't work well around here. There can be 900 sq ft house in the town of Munster costing $120,000 (factor for cost is directed towards other things besides the house). While that same 900 sq ft house that is 5 minutes down the road in the city of Gary might cost $60,000.
    Yes it will work, that is what minimum prices are for.

    The minimum price covers your expenses and makes a profit on that 900 sf house.

    That minimum price probably would cover you up to about 2,000 sf, which is why it is called a minimum price.

    I charge by the hour but still had a minimum price ... 3 hours minimum.

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
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  30. #30
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    Default Re: multi inspector firm

    Some of you folks delve way to deep into things sometimes. As I stated above. I never had "employess" I always had subs. When busy they worked soley for me and when it slowed down they also filled in with others. I sent them a 1099 at the end of the year. Never an accounting problem. Never an IRS problem.

    I don't know if some of you folks tried to trick, fool, hide, desieve the state or IRS but again, never a problem, hickup, audit (well, was audited buy the state, claimed some land on the business, ooops) Counciled with the IRS on many occasions on the best way to handle things. Never a problem with my insurance companies including workers comp.

    I just don't see what folks could have been doing wrong to become so afraid of unspoken fear about being busted for something you cannot be busted for. You do your paper work right, your accounting right, Absolutely no problem.

    Now if you are wondering why it appears questionable to the IRS , well, they discourage it so they can collect as much as possible from every tax payer and give them no place to hide. They want no ifs ands or buts. Again, the IRS is not the government entity. They are a private collection agency for the government. I also know a man (it took many years) that sued the IRS and won for millions. There has only been a few cases that ever did win in the entire history of the IRS.


  31. #31
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    Default Re: multi inspector firm

    Tax Topics - Topic 762 Independent Contractor vs. Employee

    Topic 762 - Independent Contractor vs. Employee
    To determine whether a worker is an independent contractor or an employee under common law, you must examine the relationship between the worker and the business. All evidence of control and independence in this relationship should be considered. The facts that provide this evidence fall into three categories – Behavioral Control, Financial Control, and the Type of Relationship itself.
    Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training, or other means.
    Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job. This includes:
    • The extent to which the worker has unreimbursed business expenses
    • The extent of the worker's investment in the facilities used in performing services
    • The extent to which the worker makes his or her services available to the relevant market
    • How the business pays the worker, and
    • The extent to which the worker can realize a profit or incur a loss
    Type of Relationship covers facts that show how the parties perceive their relationship. This includes:
    • Written contracts describing the relationship the parties intended to create
    • The extent to which the worker is available to perform services for other, similar businesses
    • Whether the business provides the worker with employee–type benefits, such as insurance, a pension plan, vacation pay, or sick pay
    • The permanency of the relationship, and
    • The extent to which services performed by the worker are a key aspect of the regular business of the company
    This is from the IRS site. They make the rules and thus they call the shots.
    As usual with any government agency, they have made it almost impossible to understand what they mean, but here it is.

    Jim Luttrall
    www.MrInspector.net
    Plano, Texas

  32. #32

    Default Re: multi inspector firm

    Well, I didn't so much set it up that way because of IRS rules. I took guys and trained them from between 3 to 5 months on how to inspect and report my way before I let them solo. I paid them all of the previously mentioned goodies while I trained them. Many of the competitors that settled around me were past employees who sat out the two years and then opened their own businesses. Can you imagine having 6 or 8 employees deciding to leave and compete at their whim?

    If a gal worked for a law firm as a sub, she must have signed something that gave them the right to prevent her from competing. Non compete clauses can be used with sub contractors when you allow the sub access to your business "secrets" or methods of operation.

    An old time inspection company in the Westchester NY area hired "subcontractors" until he got audited and had to make 6 figure back payments to uncle sam. Everyone exceeds the speed limit. Some get caught.


  33. #33
    Ted Menelly's Avatar
    Ted Menelly Guest

    Default Re: multi inspector firm

    Quote Originally Posted by Jim Luttrall View Post
    Tax Topics - Topic 762 Independent Contractor vs. Employee

    Topic 762 - Independent Contractor vs. Employee
    To determine whether a worker is an independent contractor or an employee under common law, you must examine the relationship between the worker and the business. All evidence of control and independence in this relationship should be considered. The facts that provide this evidence fall into three categories – Behavioral Control, Financial Control, and the Type of Relationship itself.
    Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training, or other means.
    Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job. This includes:
    • The extent to which the worker has unreimbursed business expenses
    • The extent of the worker's investment in the facilities used in performing services
    • The extent to which the worker makes his or her services available to the relevant market
    • How the business pays the worker, and
    • The extent to which the worker can realize a profit or incur a loss
    Type of Relationship covers facts that show how the parties perceive their relationship. This includes:
    • Written contracts describing the relationship the parties intended to create
    • The extent to which the worker is available to perform services for other, similar businesses
    • Whether the business provides the worker with employee–type benefits, such as insurance, a pension plan, vacation pay, or sick pay
    • The permanency of the relationship, and
    • The extent to which services performed by the worker are a key aspect of the regular business of the company
    This is from the IRS site. They make the rules and thus they call the shots.
    As usual with any government agency, they have made it almost impossible to understand what they mean, but here it is.
    The reason the wish be be so non direct is exactly what I was talking about. They cannot keep someone from working as a sub. A sub meens they can work for anyone they want at anytime. If they choose at any particular time to work just for you for a period of time or mixed between you and another company they can do so but are ALWAYS free to do so.

    Also check again on that government agency thing. The IRS is not a government agency. The are the only non government company that has the complete appearance to be a government agency or entity. They are in fact not government with government employess. Another ploy for the almighty power.


  34. #34
    Join Date
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    Default Re: multi inspector firm

    Ted, you have to stop reading those conspiracy theory sites.
    The Federal Reserve Bank is NOT a governmental agency although the chairman is appointed by the government.
    The IRS and Treasury department is a duly established governmental agency.

    From Wikipedia
    The Internal Revenue Service (IRS) is the United States federal government agency that collects taxes and enforces the internal revenue laws. It is an agency within the U.S. Department of the Treasury and is responsible for interpretation and application of Federal tax law.[1] The official U.S. Treasury regulations provide (in part):
    In July 1862, during the Civil War, President Lincoln and Congress created the office of Commissioner of Internal Revenue and enacted an income tax to pay war expenses (see Revenue Act of 1862). The position of Commissioner exists today as the head of the Internal Revenue Service.
    Just ask Wesley Snipes (actor) who got some bad advice and refused to pay taxes over the past few years.

    http://www.nytimes.com/2008/04/25/bu...ipes.html?_r=1
    Mr. Snipes was a member of American Rights Litigators, an organization founded by Mr. Kahn. Prosecutors have described that organization and its successor company, Guiding Light of God Ministries, as illegal tax-evasion schemes.


    Jim Luttrall
    www.MrInspector.net
    Plano, Texas

  35. #35
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    Default Re: multi inspector firm

    And the following are some of the things which do not work in the favor of home inspector sub contractors.

    (bold red text is mine)
    Quote Originally Posted by Jim Luttrall View Post
    Topic 762 - Independent Contractor vs. Employee

    Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training, or other means.

    Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job. This includes:
    • The extent to which the worker makes his or her services available to the relevant market
    • The extent to which the worker can realize a profit or incur a loss
    Type of Relationship covers facts that show how the parties perceive their relationship. This includes:
    • The extent to which the worker is available to perform services for other, similar businesses
    • The permanency of the relationship, and


    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  36. #36
    Ted Menelly's Avatar
    Ted Menelly Guest

    Default Re: multi inspector firm

    Quote Originally Posted by Jim Luttrall View Post
    Ted, you have to stop reading those conspiracy theory sites.
    The Federal Reserve Bank is NOT a governmental agency although the chairman is appointed by the government.
    The IRS and Treasury department is a duly established governmental agency.

    From Wikipedia




    Just ask Wesley Snipes (actor) who got some bad advice and refused to pay taxes over the past few years.

    http://www.nytimes.com/2008/04/25/bu...ipes.html?_r=1
    All I can tell you Jim is the man sued and after a few years collected millions. I have seen the paper work and final judgement papers. I know the man personally. He is one of I think of 3 in the history of the IRS that won a law suit. Conspiracy theories, no. Factual court case and documentation that he was not suing the federal government but a non government agency.

    Don't know what to tell you about how it is listed everywhere. His bank account is not lying and the documentation from the court case is in hand. Again, no conspiracy theory.


  37. #37
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    Default Re: multi inspector firm

    Maybe he was suing a non-governmental agency which is the reason he won.
    Seriously do you have a name, case number, etc. Court records are typically open records and would be easily verified.

    Other than some far out conspiracy theorist web sites, I find nothing to support the claim that the IRS is not part of the US Federal Government.
    Al Capone should have had a better lawyer since he actually went to prison for tax evasion rather than any of the other crimes they could not prove.

    Jim Luttrall
    www.MrInspector.net
    Plano, Texas

  38. #38
    Ted Menelly's Avatar
    Ted Menelly Guest

    Default Re: multi inspector firm

    Quote Originally Posted by Jim Luttrall View Post
    Maybe he was suing a non-governmental agency which is the reason he won.
    Seriously do you have a name, case number, etc. Court records are typically open records and would be easily verified.

    Other than some far out conspiracy theorist web sites, I find nothing to support the claim that the IRS is not part of the US Federal Government.
    Al Capone should have had a better lawyer since he actually went to prison for tax evasion rather than any of the other crimes they could not prove.

    And the answer to that is no. Not because I do not have a name but because of the judgment claiming it goes no where as to who the law suit was against, how much the suit was for, the names involved in the case and the actual amount or even if they one or lost.

    Yeah, I know, great back up. I once upon a time won a law suit and the same was put to me. It goes public, I pay it back, plus.

    Jim, I am not arguing with you in the slightest. The conspiracy thing just does not work in the case. I did not believe it myself. I believe myself a fairly intelligent man and can read (I think) and say to you if I did not see it and the outcome myself I would not have believed it myself.

    As for the rest, I would not be fool enough to state any such claim in the presence of how many, I guess thousands, of reasonably to very intelligent men and woman that view this board. I am not one to purposefully make a total ass of myself.

    Now if you want another statement as such that was all the court docs litterally doctored as to direct ones belief in such a manner. Hmm. Well, could be but I seriously doubt the court systems would or even could be allowed to do such. Now that is a conspiracy theory.

    If some day we meet I will discuss it with you. The real thing Jim.


  39. #39

    Default Re: multi inspector firm

    Quote Originally Posted by Ted Menelly View Post

    Now if you are wondering why it appears questionable to the IRS , well, they discourage it so they can collect as much as possible from every tax payer and give them no place to hide. They want no ifs ands or buts. Again, the IRS is not the government entity. They are a private collection agency for the government. I also know a man (it took many years) that sued the IRS and won for millions. There has only been a few cases that ever did win in the entire history of the IRS.
    About IRS


  40. #40
    Rick Maday's Avatar
    Rick Maday Guest

    Default Re: multi inspector firm

    Quote Originally Posted by Ted Menelly View Post
    There is no law saying that you cannot have an assistant. I know it gets a little more involved depending on what your state has to say about it but again an assistant is not what someone can dictate to you as far as qualifications.
    In IL anyone involved with the inspection of the property needs to be a licensed HI.

    Is it not the same in TX? I understand TREC to be very particular about the way things are done.


  41. #41
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    Default Re: multi inspector firm

    Multi inspector firms, i.e. franchises have made me a very comfortable living since I got into EW work full time. No one, and I mean no one will ever match the work ethic of the person who started the business from scratch, BBQ rib shack to building contractor, and especially private sector inspectors who are prime litigation targets in our attorney driven society.

    Jerry McCarthy
    Building Code/ Construction Consultant

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