"Real" Contractor Accepted Payment Terms

[Mike Kalob]

It seems every contractor wants at minimum 1/3rd, 1/3rd, 1/3rd (or more upfront), despite advice on here to not put more than 10% down.

I've scoured the General Contractor Payments in the forums and it seems the ones who have SOV contract clauses and itemized scope of work down to the penny with weekly payments (payments being 5% behind actual work done) are those with multifamily projects over 25+ units.

Are the rest of us single-family apt/homeowners stuck with less favorable contractor payment terms? There's a BP article from an ex Contractor advising against demanding an itemized list as that turns off most contractors who don't know how to appropriate general overhead expenses to these smaller projects.

The advice was to not ask for itemized cost list.

That seems contradictory to commentary advice, so there seems to be a gap between theoretical advice vs what's actually expected from contractors.

Anyone successful in paying behind work schedule for a SFH or single apartment? I've read about 10 contracts online and picked the upper middle one suited best for the Owner as the most detailed itemized ones freaked out all the contractors. Thanks

[Matthew Paul]

The 1/3 , 1/3 and final 1/3 is standard in the residential contracting industry . Everything  said above is true . The horror stories that you read about are generally from investors or homeowners hiring the cheapest contractors , unlicensed contractors or " Chuck in a Truck " 

Contracts should be detailed , payments , materials , scope of work every last detail .

Licensed Contractors are real businesses . Like restaurants , gas stations , grocery stores . You dont walk into the grocery store fill up a shopping cart and tell them I will pay you in 90 days . You dont bring your own steak to a restaurant and ask them to cook it so you save money . And when you go to a bar and pay $ 5.00 for a beer you know they are making money off that beer . 

Contractors are more likely to get screwed by a homeowner or investor than you think .The most  Common excuse is " I am waiting for a draw "  . Another  is  " I am over budget " .   If you want to stall a project  slow down the money  .  Contractors are not your bank , or your Hard Money Lender . 

Most good contractors dont bother with "Investor" work .    The guy that does 1 or 2 houses  is a royal PIA to work with generally . They want cheap prices , quality work done fast .  It never happens .  Professional contractors dont need that work , there is so much high paying work out there it isnt necessary to do investor work .