How do I find a Good General Contractor?

Question

Hello. I am an out-of-state investor looking to do some medium-minor renovations on a house in Columbus, Ohio. I have a long list of recommended GCs, but not sure what to look for in a quality GC that won't overcharge me or cut corners. Any tips on how to screen GCs and how to go about the process of contracting them and ensuring the work was done correctly would help a lot. Also, if you are a GC and can show some of the work you have, please contact me. Thanks!

Bruce Woodruff · Answer

What everyone needs to make certain of in a GC is that they are licensed if it is required. And check with the Registrar Of Contractors to make sure that their license is in good standing without any black marks. Unfortunately for you, the State of Ohio does not require builders to be licensed, just electricians, plumbers, and HVAC. Which is bass-ackwards, but that's another conversation...

Same other general rules apply though -

1) Get at least 3 bids.

2) Make sure they have adequate liability insurance and ask that you be named as additional insured on the project.

3) Really important - make sure they have Workers Compensation Insurance - ask to see proof of these insurances, don't just say "are you insured".

4) Ask to see a proposal and contract from another job. They should be well worded and lengthy, not short and written on the back of a bar napkin :-)

5) Of course ask to see other projects that they have completed, or are working on currently. Sometimes doing a walk-through of a current project can reveal a lot of how they operate and run their jobsite - is it neat and clean? Are the customers happy? Ask.

6) Never pay more than 10% in advance, regardless of what they say. They can start getting draws on the project once they are on-site and producing results.

7) Demand lien releases before you give a payment to them for their subs. I.e. when the electrician is finished and the GC wants a check to pay them for final draw, get an unconditional Lien release from the electrician (through the GC)

8) Get a schedule of sorts included in the Contract. You will not be able to stick to it, but get it down in writing anyway, including an estimated completion date.

Hope this helps a little, ask if you have more questions....

Mark Bohstedt · Answer

I agree with Bruce in general except #4 and #6.  I can only secure workers comp if I have employees. My son and I are members of our S corp and cannot get workers comp on ourselves. We do make sure our subs have all the appropriate insurances including workers comp.    Every job is different so our down payment varies, for new builds that are through a bank, we work within the banks draw procedures. For remodel or deck customers we almost always exceed 10%, our policy is to never finance someone else’s project. Material expenses are always covered up front. For the best outcome don’t automatically take the lowest bid and definitely check references and visit a jobsite or two.

Bruce Woodruff · Answer

@Mark Bohstedt @Timothy Howdeshell

I never said to carry a customer, I was burnt way too many times for that :-)

What I meant was that for a customer to feel comfortable and to be honest, it's best for a GC to just get a small commitment to lock in their calendar. California and many other states only allow 10% or $1000, whichever is smaller, anyway. Frankly a GC shouldn't need a bunch of $$ in advance of starting work they should be embarrassed asking for 40% or 50% up front.

The way I did it, with great results and fairness to both parties, was this: sign the contract, collect either $1000 or nothing, depending on how I felt about the customer. I mean, c'mon, a GC can't afford to pay his own crew for a week and put up some fencing and a porta-potty?  Seriously?

But then.....when the first Friday rolled around we always had a meeting (every Friday actually). They expected and were presented with an invoice for 50% of cabinets, 50% of doors and windows, 25% of electrical subs number, 25% of plumbing subs number, 50% of framing cost for material, etc....so generally I would walk out with a check for $80k or so.

Now no one is 'behind' anyone else. I am confident that they are serious, and they know that I am basically only covering my costs + a little profit. I am 100% up-front about it.

Everyone is happy and no one is gonna get burnt.

Timothy Howdeshell · Answer

@Bruce Woodruff laid out the playbook to a tee. The only caveats that I'd make are that you may have a difficult time finding a GC that will let you only put down 10%. You can be a little flexible, but the main thing is, never get the contractor paid ahead of the work on the project. If you pay them before the work is complete, they may just decide to stop showing up randomly because they got a higher paying, better job or whatever. If they still need to get paid, you have leverage to get the work done to your satisfaction. You can negotiate all of this of course. Perhaps you pay for all materials yourself, but pay 10% down payment as inducement to start the project in terms of labor only.

Bob Stevens · Answer

DO NOT even attempt to do this without a LONG-TERM team in place, it will not end well. They will tell you exactly what you want to hear.  Just connect with those doing deals they have trusted crews. It took me years. I now have about 30 guys that say how hi when tell them to jump. What you need to do is find guys like @Bruce Woodruff in Columbus. Maybe if you ask nicely Bruce will set up shop there LOL . Connect with @Remington Lyman he seems to be one of the good guys out there

All the best

Anthony L Amos Jr · Answer

Pictures of previous work doneReferralsMeet in person to get a feel for themWhat systems do they have in place to track the project timelineHow and how often are they paying their subcontractorsHow much experience do they have

Erin Church · Answer

I'd suggest looking for FB groups of investors in the area. Ask them if they've heard of a couple of the contractors (I wouldn't give a list of 20 or anything) and also ask for recommendations.

Have you also looked them up on BBB? Check there and check Google reviews. I agree with basically everything @Bruce Woodruff said as well. :) I once had a "GC" who had insurance to paint... which means I couldn't get his insurance to cover a few things that otherwise would have been covered.

Alfath Ahmed · Answer

I would look for

-referrals

-ask them about recent project that they did and how long it took them

- ask for pics of renovations they completed

- Maintain a project schedule

- Create a budget plan

- Get itemized list of tasks that need to be completed.

Eliott Elias · Answer

You are not going to find a general contractor that checks all of your boxes. Be realistic in your search, you will find two of these three. Quality, speed, price.

Justin R. · Answer

@Ardel ALegre

Understand many contractors don’t do bids anymore. With the uncertainty of inflation, supply chain, and labor, it’s hard to make an bid without losing their ass, or over charging so much to create a buffer. More and more contractors are doing “time plus materials.”

In regards to your question, get at least three references.

How do I find a Good General Contractor?

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