General Contractor Contract questions

[Ronnie Galindo]

Hello BP,

I was just reading a blog post on here about what to ask your contractor before hiring them. I have one deal in progress with an out of state contractor I have never met but was recommended by an agent that I was working with that was also an investor. A few things have gone array (of course) and we were delayed by a month due to a survey and plans not being accepted by the city. I paid up front $20,000 (which is a third of the costs) and I felt this was unnecessary due to no work being done but that was the GC's contract that he sent me. I was going to go get a contact written up by a RE lawyer for future deals so that I didn't pay up front and if they needed materials, I would pay over the phone to the store since I listened to other BP podcasts and they warn about paying before work is done. So I come here to see what others are doing.

When you hire a GC, what red flags should I be looking for (any burned stories?) and do you pay up front "deposit" costs or do you pay for things over the phone and pay labor costs once the work is done? My GC for this project says we are still on schedule but we will see. Just curious and want to hear from others because I don't want my soft costs creeping up and taking from my profits. 

Thank you!

-Ronnie
 

[David Avery]

In the contractors world.  If you want to get one to start a job, Money talks!!

I used to ask for a third on the first day of work, A third after painting is done and the final

third after completion.

Any additional items not on the bid would be so much an hour with both parties agreed on.

It has worked fairly well.

Someone has to put their "neck out " . And with how busy a good contractor is, money still talks!

Good contractors are busy and may be out 3-10 weeks.

A bad contractor is not busy and is not worth talking to.

Generally the good agents know the good contractors!

Good luck!