How to Stay Out of the Big House While Building / Remodeling a House | Ask Clay Anything

Audio Transcription

You have questions. America’s number one business coach has answers. It’s your brought up from Minnesota. Here’s another edition of ask clay. Anything on the thrive time business coach radio show? On today’s show, thrive nation, we’re talking about how to stay out of the big house while building a house. So again, how to stay out of the big house, a K a prison while making building a house. What am I talking about? Well, we have a thriver out there, a great person who reached out to us to tell, to tell us or to ask us about a, an alarming statement that their banker recently made to them. Their, their banker said to them that it is illegal for them to not have separate bank accounts set up for each of the construction projects that they do. And they had no idea that they needed to do this. And so, uh, one, um, that does not feel good when you find out you might be breaking the law when you didn’t intend to.

So today we’re talking about how to stay out of the big house while building or remodeling a house. Aubrey, my incredible son. How are you sir? Good. Hey, what is the, uh, official age you are at this point? Are you, are you all right at 12? Are you 27? How old are you? 12 and a yesterday. Last night. What were you doing? DJ? A Halloween party. Uh, how’d it go? Tell us about it. It went pretty good at first. I didn’t think he was to be the best because there’s a lot of kids there. Yup. But then it actually went pretty good. And, uh, what was the hit song? What were some of the songs that the people loved the most? Well, I’ll put the Cuban shuffle first and I liked like, um, sweet Caroline AMCA. Um, the mock arena. Okay. But this was a, a fun party.

You DJ-ed last night. You and you got paid? Yeah. Okay. So you got paid and you got paid by the person they did. They paid you well and they paid you to solve a what? A problem. Okay. So they paid you to solve a problem. The problem was what? They needed a DJ. There it is. The problem is they needed a DJ and they paid you to solve it will on today’s show we have a listener out there who has been paid to solve a problem. And his problem, if he’s in construction, his problem is what? What’s his, what’s his problem? OBS to build a house. Yup. Or to remodel houses or whatever. So he’s getting paid by people. And Aubrey, why should I pay people to build a deck as opposed to trying to build a deck myself because we’ll probably get, if I get in dialogue in the process or once it’s done, some reason to die. Why would that happen? Because you’d be like, try to nail it in place and even nail it your hand or you would be like unsturdy or you wouldn’t know how to do it right. And you’d fall through just random things that you don’t know how to do for building things. So right now we’re building a deck and they have a behind the house. Could you kind of describe the deck for the listeners out there? Oh, it’s like it comes off house straight out and

the roof was like vaulted like a, a frame kind of. Yup. Is it big? It’s really big. It’s bigger than I thought it was going to be.

And uh, so we, we paid someone to build the, the, the deck. Uh, again, why we’re just recap. Why did we pay someone to build the deck as opposed to me doing it myself? Because you’ll probably end up killing men. Okay. So what happens is, is, uh, people out there, we all have different skills. Some of us bake, some of us have to have a bakery. Some of us are dentists, some of us are doctors, some of us are lawyers, some of us are contractors. And if you can solve a problem, if you have skills, you can get a job and solve bills. If you have skills, you can get a job and pay bills. But when you own a business, Aubrey, if you decided to, to grow, uh, DJ Aubrey 3000, your, your company to a place where you had multiple DJs, what would you spend most of your time doing? Do you think?

Um, probably managing employees and like teach them how to do it properly. And is that fun? No. No? Why? Because you have to like teach him and then they said they’re gonna do it and they don’t do it. And then you just have to deal firing them and hiring them and all that stuff.

Now what about the legal aspects of the business? What do you think about that? The legal stuff. What kind of legal stuff do you think you have to do?

You probably have to like get like a business license or some sort of permit [inaudible] or I don’t know, some sort of taxes and stuff like that.

So we need to reach out to winters king.com that’s winter’s king.com if you’re listening right now, reach out to them and, and, or an attorney you can trust. I have used Wes Carter as a businss coach. Aubrey, you’ve met West Carter. He was here at the Patriots versus the jets game. How would you describe Wes Carter? Nice person. Really nice person. Doesn’t mom talk to him all the time. Okay. So my wife’s on the phone with him all the time. Wes Carter’s a great attorney, but I would recommend as a business coach you reach out to an attorney and ask him what do you need to do to be legally compliant to adhere to the various laws as a contractor in your given state, as someone who is in the construction field. Because finding out from your banker that what you’re doing is potentially illegal or is definitely illegal, does not, uh, turn out to be a fun thing to happen.

So fact in the great state of Texas, and again, you can be listening from any state out there, but in the great state of Texas, the construction fund act codafide this type of misallocation of funds provision and provides criminal penalties for missteps under the act. Certain construction payments are designed or designated as funds held in trust for the benefit of the project participants. And in certain circumstances that construction account is required. Abra, if we pay a man to build us a deck, why does the state of Texas require that the funds that we pay and the money we pay him? Why do you think the state of Texas requires that this person who’s building our deck does not use the money we paid him for other project.

Otherwise, um, they could be wasting your money. They can be steal your money and then you have to pay him more money than you’re actually supposed to do. And they’ll be stealing and using for other things and they’re not using it for they’re supposed to.

There we go. So what is co-mingling? What will commingling in law? Commingling is a breach of trust in which fiduciary a fiduciary mixes funds held in care for a client with their own funds, thus making it difficult to determine which funds belong to the fiduciary and which funds belong to the client. Uh, what does fiduciary mean? Well, fiduciary is a legal obligation and again, it’s a legal obligation of one party to act in the best interest of another. The obligated party is typically a fiduciary that is someone entrusted with the care of money or property also called the fiduciary obligation. Now, Aubrey, why do you think that the great state of Texas is so intense about making sure that contractors do not take money from a client and mix it with the money from another client?

Because there’ll be stealing money and people can be losing money. It just affects things. It messes everything up and just, it just makes, it messes everything up and it’s not simple and it kind of messes everything up.

If you were paying someone to build a deck for you and you found out that they used all of your money to go gambling or to buy something else with it or to use it for another project, would you be upset? Yes. So not so fun fact. Um, what do you think happens? Um, so when you break a law in the great state of Texas,

well, you get fined or you’ll go to jail or, or you’ll get like, um, what’s the thing called?

If you’re a co, if you’re a co mingling funds in the great state of Texas, do you think that you get a small penalty or you might really get in bad trouble with the law? What would you need to go happen in the great state of Texas?

Probably a big thing was Texas is very, very like Republican. I think they really like want to be very like clear about their laws and theirs don’t want you, they don’t want you doing it.

Okay. And by the way, what are you, what are your opinions of Bernie Sanders? What do you think about Bernie Sanders?

Mm, I don’t like them. Why? Cause you want us to get 90% taxes.

Okay. This just Bernie Sanders, both my son and I are not a fan of you. Okay. So fun fact is, uh, the person asking the question in Texas, maybe a not so far. In fact, this is a not fun fact. This is a terrible

in Texas, if you are charged with miss appropriating funds or co-mingling, a misapplication of those funds could amount to $500 or more in a class a misdemeanor with a potential fine of up to $4,000 and up to one year in jail. Misapplication of trust funds accounting to $500 or more with the intent to defraud. A third P, a third degree felony could result in a third degree felony with a potential fine up to 10,000 and jail confinement for no less than two years and no more than 10 years or on residential projects. Failing to establish and maintain a construction account for failure or failing to establish or maintain the proper account record for the construction account is a class a misdemeanor with a potential fine of up to $4,000 and one year in jail. So again, we never want to commingle funds. We do not want to do that.

We want to do is we want to keep things in the separate accounts. So if you don’t know how to do that, all I would say is if you have customer a, all of the money that customer a pays you has to go into count a and if you have customer B, all of the money for customer B needs to go into the account, be customer, see all the money for that customer C needs to go into account C. so if you had 25 clients, you’d have 25 different bank accounts going all simultaneously. And it is quite a process or a process as the Canadians call it. So if you feel overwhelmed by this, you don’t know where to even start. You’re feeling like, Oh my gosh, what do I do? Step one, go to winter’s king.com that’s winters king.com and schedule a consultation with West Carter of winters and King. He’s, he’s been my attorney for years. He will treat you right and he will help you get on the right path. But do not wait to have a legal problem before reaching out to an attorney. Every one of you. Wait until you have a legal problem to reach out to an attorney. What happens,

Dan, you’re probably going to get in trouble and it just weighs you to have it so you don’t have to worry about it.

Okay. Okay. Now, okay, let’s talk about deejaying. What are the potential problems that could happen?

You could screw up somebody’s wedding and then they’ll be really mad at you. And what kind of things would cause you to screw up their wedding? Well, let’s just say a computer crashes. You meant the first dance or he played the wrong song or you nounce the wrong names and like that and they get really, really mad. They can Sue you and then you can get in trouble or you can lose money and stuff.

Okay. And so how do you mitigate, how do you minimize those risks? What kind of things do you do to make sure that the party last night is not terrible?

You make sure you have backups. What kind of backups did you bring last night? I had like a backup [inaudible] I have back courts from my speakers if one because recently one was starting to like not like get fuzzy and stuff. I always just gives it cut out. I had an extra chords, I had extra mixer I to DJ controllers. I had like extra power cords. Everything you could need. Yep. There it is. And you also get there early to set up, right? Yeah. You got there two hours early and only it takes me 45 minutes. There it is. But you got there early. Yeah. That way if you have problems you can. But I did say I usually want to take the time that it takes me to set up and then times it by two and then times that by two and then get through with that much time.

That’s smart. Now I have a question for you. You have 105 reviews right now in, did you get a review last night? Do you know if you’ve got one? I asked you for views and they said they’re going to be giving reviews. I don’t know. I’ve not checked yet. You don’t know? Yeah, I hadn’t a few business cards out. I asked people for reviews, but I don’t know if they gave me any people would call compliment to me. And so you did a good job. I’ll give them a business card and ask him for a review. But you don’t know if you’ve got your reviews yet. You know, I asked a lot of them for him and he said, sure, I’ll do it. And I’m like, I don’t know if they’re going to do it or not. Well let’s look up right now. Let’s see how many reviews you have right now.

We can see how many people actually left you, any reviews. So we’ve got, um, DJ Aubrey, 3000, uh, Tulsa. Let’s look it up here. And right now you’ve got a 105 reviews and it appears as though your newest review is four hours ago. They did it, they did it four hours ago. He got one and the only three weeks ago. But you got one from Jensen Watts says, Abra is hands down the best, most talented DJ I’ve ever met as a wedding photographer. I meet and work with a lot of DJs and none of them even compare to Aubrey. He deeds her Halloween party this year and the place was bumping. So many of our friends kept asking who he was, how much he charged because he was so good. He arrived early, brought great energy in Swiss, super enjoyable, personable, positive and flexible and he actually beat-matched very well. In fact, instead of just going song to song as most DJs do, we had such a blast and I know it was because of Aubrey that our party was a huge success. It was. It was. I says we had such a blast and I knew it was because of DJ Aubrey that our party was a huge success. We will be using him for every future of it. We have. I would highly recommend Jensen Watts. Aubrey, what do you mean? That was good. That was good. That was good. Shunda

but if you’re out there and you feel like right now you’re like, Holy crap contractor and I had no idea that I had to set up separate bank accounts for each of the construction projects that you do. It’s okay as in like, hurry up and fix it right now. Go to winner’s king.com that’s winter’s king.com. Reach out to them right now and schedule a business coach consultation so that they can help you get yourself in the right position. Get yourself where you need to be so you don’t get in trouble with the law because once you get in trouble with the law, it’s not good. Know Auburn with each and every show, we’d like to end this show with a boom and so are you psychologically prepared to give us a boom? Are you physically prepared to give us a boom? Yes. Are you feeling like you’re getting better at throwing a spiral? Yes. Okay, that’s okay. So now that he further into three, two, one, boom.