Robbing Peter to pay Paul
We just had our first real hot days for this year, which means landlords are about to get calls about air conditioning not working properly.
Now, there are some normal things that can happen when central units go from being “off” during springtime to “on” full blast in the Georgia heat, and these typical malfunctions can hinder a unit’s ability to cool. But we just had some not-sonormal things happen with brand new units I’d like to tell you about.
The first one was at my personal house. We had to have a completely new split-style heat pump installed in late March. So, we called the company we have been using for the past three years to do it.
During the install, they added a few more “drops,” or places where vents are located, to better handle an area that was once a carport but is now our master bedroom.
We enjoyed the new cooling for a week or two before the temperatures outside came down again and we opened the windows and turned the central unit off. Once the outside temperatures rose again, we turned the new unit back on and noticed something wasn’t right. The new drops didn’t appear to be blowing, and there was a big difference between the temperature in our bedroom and the rest of the house.
I called the AC company to inquire about this issue, and they told me it probably had to do with the insulation over our bedroom being different because it was once a carport. That answer seemed strange to me because insulation should have nothing to do with the airflow. But we got preoccupied with the baby, and I let it go.
Next, we had another unit installed in late April at a rental. At that time, it was still cool outside. That same company installed the unit the day our tenants moved in, and they were happy about it until it got hot outside. At that point, the AC was blowing room temperature air. I let the installer know, and they said they would get to it later that week.
They didn’t show ... twice. We discovered the unit had frozen up, so we contacted another company to see what the issue was. To make a long story short, the brand-new unit didn’t have enough Freon in it and it costed us $200 to get it topped off. And on top of that, my tenants and their little children were in the heat for a week and half because our usual company (you know, the one who installed it) didn’t show up when they said they were going to.
After that episode, I decided to inspect my personal house. What I found was that the new drops had not been adequately secured and had fallen off. In other words, the cool air meant for my bedroom was now cooling the attic. I’m no AC expert, but I took enough duct tape to them to make NASA proud. And now our bedroom is much more comfortable.
These situations beg a question. Both of these new units were sold to me with a parts and labor warranty. But what good is a warranty if you can’t get the company to show back up?
This morning I was talking to my friend Russ over at Gordon Building Supply about this very issue. We started talking about how guys who have trade skills often try to branch out on their own and start a business.
Russ said he has seen time and time again were these contractors will bid jobs, get them and then charge their materials on credit. Once they get paid, they spend the entire invoice amount before they’ve paid for the materials they charged for the original job, meaning they start the next job in the red. This practice has a snowball effect and before long, they are robbing from Peter to pay Paul.
We agreed that this was not a good way to run a business. I wondered if that’s what’s going on with this AC company and they’re having to run from new job to new job to stay afloat.
Robbing Peter to pay Paul is an easy trap to fall into in real estate, especially when flipping. It’s very easy to overspend your rehab funds and not have enough to finish the house. If you ever find yourself digging that hole, stop digging. You don’t want to fall in there.