How to reward a good GC?

[Lionel Quiambao]

Hi everyone! So I'm under renovations for my first property and I used a conventional purchase and renovation loan, not knowing how tedious the draw process would be for me and my GC, but saw it as the most convenient way to fund the renovations.

Doing our best to communicate with each other to ensure a smooth draw (fill out work completed form, get inspector out, review from both HUD Consultant and lender, send for signatures, 3-5 days of processing). On draw #3, the tediousness of this process, which caused delays, and then an extension form was requested where we would need to explain the delays, was really getting to the both us, and my GC vented to me his frustration about the delays in payment.

He's been really patient and understanding, his team works fast and they do good work. I'd like to know how you guys would reward good GCs. I'm looking to BRRRR this property, and hoping to be able to provide a bonus out of the refinance portion. But I haven't said anything because I don't wanna make any promises until the refinance comes through and until I get your guys' thoughts. Thanks in advance!

[Andrew Freed]

@Lionel Quiambao - Are you able to cover some of the balance while waiting for draws. I'm assuming this is a FHA 203k which is known for being administratively burdonsome. Not saying this is right, however I've known other investors who pay the draw to the GC while HUD processes the paperwork which takes a very long time. Paying contractors quickly is instrumental to them being on your side. Delayed payments to contractors will only sour the relationship. Many contractors are not good at budgeting hence need quick and timely payments. Nothing will ruin a relationship with a contractor quicker than untimely payments.