Dealing With Contractors

by Oct 9, 2017Blog0 comments

There are LOTS of general contractors around for whatever rehab or repair work you may need to have done to an investment property you already own or are thinking about buying. One of the best ways to find a reliable contractor is to ask for referrals from other Real Estate Investors. (REIers).


Absent that, conduct a Google search and you can probably come up with lots of names in your general area. Craigslist ads are another source. Once you have identified some decent prospects, Yelp the top 5 or so that look most appealing. Then confirm the validity of the good ones you find via Angie’s List and/or Home Advisors.


Quotes & Contracts


  1. Ask the top ones to come out and give you a written quote. You want every conceivable contingency, and bell & whistle, included in the quote. Here is why: The quote forms the basis for the agreement that you and the GC will eventually sign.


  1. Demand a written contract. Include everything from the quote in the agreement.


  1. Request and then call references the GC provides. Honest contractors welcome scrutiny; others not so much.


  1. Check their General Contractor (GC) license.


  1. Make sure it is current. Look at it carefully.
  2. Check their license online (with the state license bureau) to confirm its validity.


  1. Confirm that their insurance coverage, bonding, etc. are all current.


  1. Look them up on line. View their website. If you get a “funny” feeling about them, dig deeper.


  1. Send them an email. See how quickly they respond, if at all.


  1. Call after hours; leave a voice mail; see how quickly they call you back: next day, next week?


  1. Call during business hours and see how customer friendly their staff is.


  1. Google their company name and the GCs name and see what pops up. You might be amazed at what surfaces: criminal records, pending lawsuits, bad industry reviews, negative newspaper articles, etc.


  1. Insist on performance payments. Do NOT pay 100% upfront. When you do pay, it should be for work that has been successfully completed. When the next phase is done, pay again etc. Repeat.


  1. Pay by credit card if at all possible. That way if they screw it up and/or walk away from the job half way through, you may have some recourse you can pursue by requesting the credit card company hold up paying the contractor for a questionable charge.


  1. If possible, pay for supplies separate from labor; but only if there is a price advantage to you in doing so. Otherwise, make it a “turn key” deal where every imaginable expense is included in one OTD (Out the Door) cost including sales tax, etc. EVERYTHING to be included. No ups. No extras. No BS.


  1. Fixed deadlines: You want a drop dead certain starting date, and completion date, with penalties for being late. Fixed deadlines with teeth give you pretty good leverage over tardy or incompetent GCs.


  1. 100% happiness guarantee. If you are dissatisfied, there need to be remedial solutions specified in the contract, i.e. they don’t get the last payment until it is right or, at YOUR choosing you can bring in a different GC to finish the job if the first GC can’t or won’t perform.


  1. Inquire of the GC if he is using his own employees for 100% of the job or might he be using subcontractors (subs).


  1. Are supplies being delivered to your place by a third party vendor?


NOTE: If the GC uses subs or has material delivered to your place, make sure to take precautions that one or both don’t file mechanic’s liens against your place because the GC didn’t pay them. Thousands of Mechanic’s liens are filed every year. Insist on seeing paid bills, invoices, etc. Be cautious.



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  1. Need Acquisition Funding for a fast-turnaround flip or fix. See more info below.


  1. Own property free/clear but cannot or will not use hard money lenders or conventional funding sources. See more info below.


Contact info: Tod Snodgrass,, 310-408-7015