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Updated over 10 years ago on . Most recent reply

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807
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474
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Nat C.
  • Investor
  • Miami, FL
474
Votes |
807
Posts

The Magical Trick to Dealing with Contractors?

Nat C.
  • Investor
  • Miami, FL
Posted

If I knew the answer to this question, I'd be a lot better off.

Sadly there are many, many untrustworthy contractors. I live in the land of South Florida where the worlds most shady contractors congregate.

In the past 5 years, I've lost in excess of $50,000 to thieving builders and handymen. I've heard of people losing much more. 

I'm currently embarking on several renovation projects from medium size, to major. 

I've attained various bids and many of the contractors specify payment terms as 50% down payment to start and 50% upon completion. Now there is no way on this planet I'm going to give someone a 50% down payment, especially when that equates to tens of thousands of dollars.

I am trying to work out the best way to structure the contract that leaves me with the least amount of chance of being ripped off. I was thinking of breaking the work into components and paying at intervals For example-

$10,000 renovation job

I pay X amount for purchase of materials to start, then I pay X amount for successful completion of each phase

Eg, I pay $1000 for paint and then once painting is completed I release another $1000.

Then I pay for $1000 for tiles and release another $1000 once tiling is completed.

One handyman I'm working with agreed I'd pay for materials upfront only and then pay him for his work once he completed. This is a 4 day job. Today (day 1) he asked for a cash advance tomorrow (day 2) as he is short of cash. My guess is to be strong and say no?

Most Popular Reply

User Stats

12
Posts
5
Votes
Chris O.
  • Real Estate Investor
  • Brevard County, FL
5
Votes |
12
Posts
Chris O.
  • Real Estate Investor
  • Brevard County, FL
Replied

For the big money renovations.....Why not a licensed contractor? Easy to research in Florida. Www.myfloridalicense.com. Ask the contractors for their license #. All trades should be licensed. The licensed contractor should provide you an insurance certificate. The contractor can file a lien on the house until paid in full. You will get a release of lien on final payment. These kind of contractors are usually honest if all the scope and $$ terms are agreed and signed. These contractors want to protect their license in Florida. 

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