Mini-split heat pump died

[Sigarms]

I am not going to say that I am an expert or that I know but I'm just going to offer my opinion. I dabbled in HVAC for about 6 months when I was in college and I needed a break from so much school and a little extra money. I then was a service plumber doing hydronic air conditioners in a lot of apartment complexes in Phoenix when I was first married. I plumbed for about 3 years. $4300 sounds fairly reasonable from the figures I remember when doing HVAC. I didn't write those bills. I did however write the bills for the hydronic air conditioners and I usually charged about $2000 to $3000 for them.

A hydronic air conditioner uses chilled or heated water with a fan blowing air by the heated or cooled fins, effectively cooling the air. So these hydronic ac units were sheat metal and copper pipes. I bought them from a little outfit in the middle of Phoenix for anywhere from $400 to $800 a unit depending on the size (we upcharged all parts by 65%). So the rest was labor and some time I had to install new filter doors and put in new ducting, sweat new pipe on, and other odds and ends. In this one specific apartment complex, the original installer never put valves on the individual units and so I would have to shut the whole system down and drain it which would take a least a couple hours for bottom floor apartments which added a lot of time.

Anyway, back to what I was originally wanting to say. I was making $18 an hour while the owner was charging $95 an hour for my labor. I am not going to give you the sob story that all business owners like to give people about how much their business costs and how little money they make. But I will say that I put probably $200 of gasoline into that service van a week depending on how much I drove. I also know that the insurance for all the vans was expensive. Workman's comp insurance is expensive. Paying office girls to write checks and answer phones was expensive (my wife did that for this company for $11 and hour and she was the lowest paid of 4 office ladies). The tools that each service van was outfitted with (besides my own $3000 worth of equipment I invested) was really expensive. Paying me to sit in Phoenix rush hour traffic was for 1-2 hours into Phoenix and 1-2 hours out of it was expensive. I could go on and on and on. The point is, the guy is not pocketing $2300 a day. I do think he makes a really good living and this 20% figure the other guys is giving you is probably low (I would guess its closer to 30%-40%, but like I said, I don't know), but you have to make a lot of money to make it worth it.

I bet you he is making a little money off of the unit he is buying. He purchases it for $1000 and figures he charges you $1500 for it or something like that. His tools, truck, knowledge, work, and product all costs money and being in a trade like that is miserable, so hes gotta charge a good chunk of change to make it worth his time and body wear and tear. I wouldn't do any of that miserable work for less than $25 an hour in my pocket again. If I was going to take a wild guess, he is probably going to shove $1000 in his pocket from that job, or at least profit it and the business will get a lot of it. But you know, a lot of people make that same amount of cash working a lot less hard in a day, I don't think its that absurd. But from the consumer stand point, yeah, it sucks! I would DIY but I am also 24 years old. Sorry for the long reply. And I didn't meant to sound like a know it all or push anyones buttons if anyone feels that way...

The bigger issue is customer service and when you YOU provide service on the job and something goes wrong.

IF you pay for something, you want it done right and done the first time. If something goes wrong, when can they come out an make the fix for you?

You'd be amazed at the amount of "GOOD" hvac contractors there are out there who lose a job by 1-2k, but then they THEY get the call on a job they lost per the install price because they were too high on quoted price, but the guy who had the best price can't come out for another week (or month) because he has a full time job (or whatever his reason is) and that's where he makes his "real" money. HVAC side jobs are "play money because you know you can get them being the lowest price out there.

No one ever wants to wonder what happens if we have a problem with the equipment.

 

[TnAndy]

You missed my point, you can get the exact same capacity going with a lower cost on a different indoor unit. Many contractors do not realize this (per Mitsubishi at least).

As a "professional" you need to know what is allowed per the manufacturer. I'm sorry, but I've worked a hand held remote for various Mitsubishi mini split, and your indoor unit is the most confusing of them all. Would never off that per a multi zone system.

Mitsubishi remote IS a very poor design, I'd agree. "I FEEL".....what the heck does that mean....should say "I WANT TO FEEL"...because if it's hot and you want cool, you set it ON COOL....I don't presently "feel cool"....I WANNA feel cool.......like they set out to make it the exact opposite of what you want. Thought it was stupid when I put this one in, and 12 years later when I put the one in the master bedroom, they still use the same remote.

 

[Sigarms]

Mitsubishi remote IS a very poor design, I'd agree. "I FEEL".....what the heck does that mean....should say "I WANT TO FEEL"...because if it's hot and you want cool, you set it ON COOL....I don't presently "feel cool"....I WANNA feel cool.......like they set out to make it the exact opposite of what you want. Thought it was stupid when I put this one in, and 12 years later when I put the one in the master bedroom, they still use the same remote.

The job of a HVAC contractor is to make you comfortable and to meet your expectations and stand behind his work. Good HVAC contractors will never be the cheapest out there. Not saying go of the highest price, saying to compare what you're getting for a piece of mind to know you'll be taken care of.

Don't even get me going on the hand held remotes. Had one one homeowner upset becuase his mini spilt wasn't working right and he was PISSED. Turns out he was using his TV remote to try and control his mini split. TRUE story.

 

[TnAndy]

Oh I believe it's a true story.

I did replacement windows for years....had a woman call me once really mad. "These are the worst windows....I can see the curtains moving with the air leaking in....."

So I go out there, walking up to the front of the house, I can already see the problem. Double hung window, she threw the double locks into the lock position, but the top sash was NOT all the way up, so the lock cams engaged nothing. I went inside, showed her (again...always showed everyone how to operate the windows) the window wasn't closed at the top sash, and yeah, they will leak air IF THEY AIN'T CLOSED.

 

[mikester]

I understand....but this is a one guy/one helper show. Overhead ought to be minimal.....but OK....throw in 20% overhead...call it $500 bucks on $4300. I KNOW the equipment cost is $1800 or less (I would be paying retail for it). I KNOW the job is less than a day.

$4300 - 500 = 3800 - 1800 = 2000 Take another 200/day out for the helper....likely high, even with matching taxes/insurance (which OUGHT to be part of that overhead), he ain't paying the helper $20/hr HERE.

Hence, $1800+ . Assuming 8hrs (it won't be), that works out to $225/hr. Still seems a bit exorbitant >to me< .

People go into business to make money. He has to maintain profit margins after paying taxes, insurance, accountant fees, lawyers, overhead, training, deadbeat customers, blah blah blah. As a consumer you have choice and you go with a vendor YOU select. If you want to save money then do it yourself and accept the risk that comes with the job. Vote with your wallet. Keep shopping at Walmart and support the Chinese economy.

When I read your posts all I see is someone who is clueless when it comes to actually running a business and make any money at the end of the day. You seem to have all the answers. Maybe you should go to school, get your hvac ticket, start a business and lets talk 5 years later. There is a reason why 95 percent of small businesses fail within the first 5 years.

 

[Sigarms]

When I read your posts all I see is someone who is clueless when it comes to actually running a business and make any money at the end of the day. You seem to have all the answers.

I really do think that is a unfair comment. I would NEVER EVER give a quote on what it would be to replace a system over the phone, but that's different with mini splits. Starting price $3,500 even if you can find the equipment yourself for $500. Saves everyone a lot of headache and time if the end user thinks he can get it done for $1,000 on top of his cost.

The issue with HVAC is people think they're like appliances. Plug it in and walk away. NOT the case.

That said, you are right about business's failing, but even if they fail, they still survive because they work from their home.

 

[TnAndy]

Thanks for the insight. I was self employed in the home building and remodeling business for nearly 30 years. I understand EXACTLY what it takes to be unemployed every morning, and if I didn't do anything about that, be the same at the end of the day.

My point to the original post is there is an acceptable level of profit, and then there is just plain gouging....and this guy crossed over into that last territory......in my opinion, of course.....supported by the numbers I have already furnished.

 

[ustmd]

The OP is making a couple of assumptions--the installer may not be getting a good deal on the equipment from LG. His price may be close to what the consumer pays. There is a good chance he is paying $1400 for the equipment (30% off of list-which is fairly standard for a rep). If he wants to make 50% margin on the materials, his price to the consumer would be $2800, which leaves $1500 for the labor.

 

[TnAndy]

Break it down anyway you want....the OP was not going to pay two guys $2500 for less than a day's labor. The HVAC guy, after having come initially on a call to service the old unit, then coming to realize the OP was not the average consumer, should have made a reasonable bid on the job....say $1000 over costs (which I may well have paid)....for a </days work, and saved the higher profit jobs for those that are more clueless.

And by the way, IF his cost was $1400, (your figure) a 50% markup would be $2100......not $2800. Perhaps his math was faulty as well..........

 

[TnAndy]

The issue with HVAC is people think they're like appliances. Plug it in and walk away. NOT the case.

Well, I only have experience with the 2 I've installed in my own home, so I freely admit that is limited......but both of those have been exactly that....P & P. The one that just failed, installed about 20 years ago....the other one (12,000BTU 410a inverter model) about 6 years ago....and both have been WAY more trouble free than the dang ice maker on my fridge

That said, you are right about business's failing, but even if they fail, they still survive because they work from their home.

As I stated above....I was self employed for nearly 30 years, and operated out of my home the entire time. The reason I've seen a lot of failed business over the years is they got caught in the middle....they got too big to operate out of their home, so they opened a location, hired some help (yeah.....good luck with that), a secretary/bookkeeper, etc/etc and their overhead ate them alive for the amount of business they could get.....they weren't quite big enough to be big, but had an overhead they couldn't support. Recipe for disaster. I went in the home building business, spec homes, in 1978....doing 75% of the work myself, subbing out a few areas, operating out of my home with one helper. I'd do 3-4 homes/yr.

LOT of middle ground builders around here (I called them 'telephone' builders because they never raised a hammer, subbed 100% out) that went bankrupt when home mortgage rates went sky high in the early 80's and they were sitting on a dozen homes the bank took back. I didn't bankrupt....sold the last house I had going....AFTER 18 months !....but did get out of the business for 7 years while teaching vocational school. I went back to building, remodeling more.....the money was better and quicker turnover.....in 1988 and did that until I retired in 25 years later. I made the decision to stay small and flexible as to how my money was made and avoid that middle ground and all it's headaches. It was certainly the right decision for me.