To fire or not to fire contractor...

[Andrés Uribe]

Hello BP Forums,

If I may pick some of your wonderful brains from your experiences, here is my situation.

I purchased my first two flips in September, demoing right down to the studs and changing the framing layout of each, then building a garage underneath. The two properties are next door to a brand new development of 4 townhomes with garages, which are premium and coveted for the neighborhood.

The contractor I hired is very eager to work on this project, he is excited that his name can be on a nice renovation for a growing neighborhood or Pittsburgh. But, he is slow, very slow, and is very good at making promises and making himself look like he will deliver when we first spoke - 30 years of experience with lots of connections (which checks out after speaking with references). I am having a hard time believing he will deliver because he keeps saying "next week this will happen" and it's been like that for 6-7 weeks now, and barely any progress has been made. On the other hand, his references and reviews are good, architects a developer and designers that have used him for bigger projects than mine have very good things to say. Help is hard to find in Pittsburgh so I am not sure if he got stuck with a much smaller crew than usual, or he took on too many projects (we are having a call about this on Tuesday). I know he is getting fired from two other projects from an investor I know that uses him, because of being behind and the quality of work due to rushing on a project. They are putting pressure and I am putting pressure. Over all, I do think he is a good guy, but just not on his game AT ALL.

So, 3 months of owning the homes and demo is not done, I budgeted for April finish, I know he will not finish two houses in 4 months. His price of rehab was low at $266K, that I am not sure other contractors can work with for the scope of work.

So, my options are to add more time and spend more money on my monthly payments until he finishes. Fire him and hire someone that could be more expensive and could take just as long to finish.

Or! I just spoke with a modular builder, that could tear down two houses and build 3 row homes. But my hard money loan is not for that and not sure how I'd go about adding more to the loan. Refinance or add to hard money loan? we'll see, lots of digging to do.

Doing all this makes me smile though, means I am in it! But $@!*# is it stressful at times.

Have you had any similar situations?  Thank youuuuuu

[Bruce Woodruff]

@Andrés Uribe You don't even have a contract? Huge warning sign! Never do that again! In this case though, it will hurt him more than you. It gives him little ability to do anything to you....

A mechanics lien can only be filed if he is owed money for work performed - which doesn't seem to be the case here, right?

One thing that will help, you need to get an attorney to file a 'Cease and Desist' against him and have it sent certified mail to him. Once this happens, he cannot go to the jobsite, or even contact you any more. Then you can freely and legally hire a new Contractor and start to make some progress. Make sure you don't owe him anything and that all of his tools are removed from the site.

Make sure you have a very specific SOW, and a legal contract for your state. Add at least a tentative completion date to the contract, like "All work will be substantially completed on or about May 31, 2022"....Any and all changes, however small, to the initial contract need to be recorded as a Change Order and added to the contract as a new amount and schedule delay...

Hope this helps, let me know if you need anything else.....