In most cases because I have an ongoing relationship with the clients, or start one with the inspection (thus, annual or more frequent inspections so I see the same properties over and over). In other cases because I help orient and explain the work to a contractor for an additional fee. I don’t throw inspection reports over the wall very often, though it has happened.
I have ongoing relationships with my clients as well and I have found out that all of the information they need is noted in the reports. I have investors from California that I have done over $100 million in building purchases this past year, who have never seen the buildings that I inspected in person and still have never called me to ask about any of the properties. Now they don’t even call to set up assessments, they’ll email me the address(es) and ask when they should tell the contact at the site when they could expect me to be there.
I did have one client from Texas who was purchasing a building in Youngstown, Ohio back over the summer, he flew in for the assessment and we set up a phone meeting a week afterwards after he was back home and had a chance to go over the report. This building was about 44K sf and 60% of the building was totally covered by foliage, from the ground to up and over the roof, trees and weeds and vines and bushes etc. you couldn’t even see the walls or get to within 20 feet of them. Some of the tree limbs and other foliage was laying on the roof in areas. Since the wall we could see, the front of the building, had some serious cracks noted the buyer was concerned what condition the rest of the walls were in, which was why we set up a phone meeting. That was the only time I recall needing to discuss with a client something that wasn’t clearly noted in a report.
I may be misunderstanding what you wrote, but are you saying that you meet with contractors from some of the buildings that you have assessed, and tell them how to correct some of the issues you have noted?
That’s what I said exactly.
And work through alternative approaches as needed to getting things back in order.
Other commercial investors just don’t care. They want a fairly digital report. I’m wasting my time and theirs with details:
they want to check a box, and know if the building is good better best crap.
And actually a cardboard cutout that just looks good on Google Maps.
They would never call, they only care about the numbers. They want a certain rent multiple and someone else will (or won’t) deal with the building operationally. Any defect under about $50k to fix they don’t care about at all, and any problem under a $500k is not a dealbreaker. That said my report has killed several deals, after a big issue was found. The small stuff: nobody cares.
This became a challenge for me. I see many people stating 0.10 to 0.20 sqft. Texas Inspection site said 0.16-0.30. CCPIA guide states 0.06-0.10 for a warehouse with offices.
I’ve run into opportunity to inspect a shopping center close to 180,000 sqft. Like most things, the larger the size, the lower the price per/unit. Like 100K acres usually sells less per/acre than 5 acres.
The property has a lot going on: 3 separate buildings, supermarket(standby generator, paralllel rack ref.), 60+ HVAC/Refrigeration Units and a few restaurants. They asked for options, I’ve done two options. Hoping they choose a full inspection, as I would really like to inspect everything.
If I did 0.07/sqft I would exclude Generator, Opening Every HVAC/Ref unit, F&G and Electrical Infrared.
My numbers are not finalized, I’ll share what happens if it does.
So, the other method is by hour. I had 72 hours in this job, what would be a fair price per hour. At some point, I have to be competitive and it’s a gamble to lose the job, so I feel the need to bid as tight as possible, without going in the hole.
I’d say you just have to get a few jobs, track your hours including all desk time,
add in the bid time and calculate your effective hourly rate.
Owners don’t seem to like T&M jobs. But I know a couple of (non-inspectors) that charge a day rate ($1200-$1500 with materials) and do well.
I would consider this to be on specialty jobs where the project would not have clear parameters or in a consulting role. IMO, it does not apply to this project. It’s fine for determining a cost basis. Only you can “value” your time appropriately.
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As an experienced Commercial Inspector/Business Owner, my Base Commercial hourly rate is $250.00/hour for Field work, and $100.00/hour for Office work, including Admin, research, report writing, etc., so EVERY job is priced using differing rates. (Can’t use SF rates for Office work)!
(Yes, there are always exceptions).
So, comparing both methods of calculating fees, $250/hr for 72 hours (you are likely way off that guesstimate) equals $18,000.00… which equates to $0.10/SF for that 180,000K (3 buildings, NOT 1) property… which is OFF for both methods based on the usage of the property and the Trades that are necessary to get a proper FULL PCA done, IMO.
If you wanna play with the big boys, you need to participate as a big boy in every way!!
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So there are a few things to consider:
- Industry standard or norm for commercial PCA costs. (There is not one).
- Competition.
- Scope of work.
- Specialty trade cost.
- Client expectations.
- Your value (time and experience).
These numbers are fairly significant or large to some and just everyday business to others. Now, if you really need the work or experience as well as resume building then be aggressive. But you will quickly realize this will be the first and last time you do that. 
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IMO, the first and biggest mistake a Home Inspector makes trying to break into Commercial inspections… expecially the bigger jobs… is that they painfully underestimate the time/work involved in these jobs, and the size (or lack of) the Team they assemble to do these jobs properly!
Like Brian inferred above… you damned well better be paying attention to everything, and be learning from your many mistakes, (yes, there will be many), so you can try to avoid them in the future!
Are you concerned yet? Good, you should be. You need to be in the right frame-of-mind for these. You very much need to be managing your own expectations.
Good luck!
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The ones authorizing are wanting to get building inspected enough for legal documents and to see if any costly defects exist. Mainly so they can move forward with sale, insurance.
Kinda makes me perplexed, sure I can walk through the building, not write anything about anything unless I see something major but seems like flirting with liability disaster.
Then they would have me come back at a later time and perform things not included in the lesser option package like infrared or generator. The infrared would be twice as much when I return, because I have to open all the panels again.
I wouldn’t feel as perplexed as I would very leery. I mean, they are going to make a huge $ decision based on a hurry up walk through of the building?
And, when you (or someone else) inspects it later and finds the big thing (s?) that was/were missed in this rush job, who are they going to look to for relief?
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Are you paying attention to what you are writing? You are answering your own fears with your own words…
So where exactly is it your concern or liability??
THEY made the decisions, NOT you!!
STOP thinking like a Home Inspector, and begin acting like a Businessman!!
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This is all very positive feedback from the client and it is all back to the scope of work. They are telling you what they want. They want you to report on major deficiencies and concerns. So how do you define major? Define it and get back to them.
If they want you back to perform other services such as infrared, then it will cost more and you explain why. They either see the value in that service or they do not. I would not even mention it again unless they ask for a future price.
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The ComSop opens the door for you to step through and meet the expectations of the client contractually. The client gave you on a silver platter the “purpose of the inspection”
From the ComSop
4.3 Varying Levels of Due Diligence This Standard is designed as a baseline from which the inspector and client can develop and agree to a scope of work that may deviate from this Standard, depending on budget, time constraints, purpose of the inspection, age of the subject property, and risk-tolerance of the client.
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Thank you all for the replies, y’all are the best.
What’s on my mind is how cheap would I go at offering a minimal inspection. I need to study the comsop closer, because I offered a good bit more than required with good intentions. Out of three options 1st $15k and 3rd option $7300. Any lower I don’t feel like I’m not providing much value for its size. It is important for me to get the job, and they were pleased with my proposal options.
Hoping this thread not only helps me, but others getting involved. One thing I did to be an attractive bidder was got $3M E&O and advised I can add the owner with 3 days notice to the policy.
Thanks again
Yes Sir, that’s where I’ll need to describe scope of work clearly of what’s included and what’s not included within contract agreement.
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Thanks to many of your comments. It’s really helped me increase the learning curve.
Out if 3 options they chose the 3rd cheapest, mainly because they didn’t want to waste time as already mentioned. After focusing on several comments, especially “quit thinking like a home inspector”, it began to make perfect sense. Think like the agent, banker, insurance and buyer. What are their core needs to satisfy a purchase.
I visited the supermarket, it was totally remodeled 2 years ago, all brand refrig systems, everything. I could offer to not even look at them for that reason. I would guess there’s probably 1-2 parallel rack systems with 6-8 compressors. Some are 100% propane refrigerant, not something I take lightly, have y’all ever seen CSB videos for propane leak at gas station ignite, sad. The propane doesn’t have mercaptan in it.
Looking forward to outcome of 4th option I sent to them tomorrow, I changed the scope but kept same price. It’s possible I could lose job so I need figure out my minimum for taking responsibility if money is a factor. Tough decision. Thanks again
That is NOT what was meant at all!
That’s it for tonight. I’m out!
Ha, that’s not what I meant either. I meant, think about their needs from a business standpoint and adjust accordingly. It’s still helped me change my philosophy of trying to inspect every receptacle in the building to what are the client’s needs for purchasing the building.
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72 hours is way too high for a community center retail site. Crazy high. Especially if the client is doing a presale/proforma. He’s likely just using your report to pad his OM with info.