When Looking for a Contractor...

Question

Hello BP Flippers & Rehabbers...I'm thinking about implementing the rehab/flip strategy. I have 2 questions for folks who've completed 3 to 5 flips/rehabs.1. What are the 3 things look for when selecting a contractor?2. What are 3 things "you wish you would have known" when you were deep in the rehab/flip and something when wrong with the contractor?I appreciate your thoughts and feedback.

Mohammad Parwez · Answer

You can build your checklist around the following questions while selecting a GC.Also it can be refined for a project specific. Checklist for selecting a general contractor: Selecting the right general contractor for a construction project is a crucial decision that can significantly impact the project's success. To help you make an informed choice, here's a checklist of important questions and considerations to probe and interview a general contractor: 1. Qualifications and Experience: - How long have you been in business as a general contractor? - Can you provide references from past clients or examples of completed projects similar to mine? - Are you licensed and insured? Can you provide proof of insurance and any required permits? - Do you have any professional certifications or affiliations with industry organizations? 2. Project-Specific Questions: - Have you worked on projects of a similar size and scope before? - What is your experience with the type of construction (e.g., residential, commercial, industrial) and specific features of my project? - How do you handle project scheduling and time management? 3. Subcontractors and Crew: - Will you be using subcontractors for any part of the project? If so, how do you choose and manage them? - How do you ensure the quality and reliability of your subcontractors and workers? - What is the size of your core construction crew, and what are their qualifications? 4. Project Management: - How will you manage the project, including scheduling, budgeting, and communication with me as the client? - What software or tools do you use for project management and communication? - Can you provide a detailed project timeline and budget estimate? 5. References and Portfolio: - Can you provide a list of references from past clients, including contact information? - Do you have a portfolio of completed projects or photos that I can review? - Can you share any testimonials or reviews from previous clients? 6. Budget and Pricing: - How do you handle project pricing, including cost estimates, change orders, and payment schedules? - Are there any potential cost-saving strategies you can suggest for my project? - Do you offer a fixed-price contract or a cost-plus contract? 7. Permits and Regulations: - How do you handle obtaining necessary permits and ensuring compliance with local building codes and regulations? - Are you familiar with any zoning restrictions or special requirements for my project's location? 8. Warranty and Guarantees: - What type of warranty or guarantee do you provide for the workmanship and materials used in the construction? - How do you handle post-construction issues or repairs? 9. Communication: - How often can I expect project updates and progress reports? - What is your preferred method of communication, and how can I reach you if I have questions or concerns? - How do you handle conflicts or disputes during the project? 10. Safety and Insurance: - What safety measures and protocols do you have in place to protect workers and the project site? - Are you covered by workers' compensation insurance, and do you have liability insurance to protect against accidents or damage? 11. Project Duration: - How long do you anticipate the project will take from start to completion? - What factors could potentially delay the project, and how do you address them? 12. Payment Terms: - What is your payment schedule, including initial deposits and milestone payments? - Can you provide a breakdown of costs, including labor, materials, and any subcontractor fees? 13. Contract Details: - Will you provide a detailed written contract that outlines all project specifics, including scope of work, costs, timelines, and warranties? - What are the terms and conditions of the contract, including dispute resolution? 14. Sustainability and Environmental Practices: - Do you have experience with sustainable building practices or green construction, if relevant to the project? - How do you handle environmental regulations and sustainability concerns during construction? By thoroughly probing and interviewing potential general contractors with these questions, you can gain a better understanding of their qualifications, approach to the project, and ability to meet your specific needs and expectations. This will help you make an informed decision and establish a solid working relationship for your construction project.RegardsMohammad ParwezNC Realtor and Investor

Mohammad Parwez · Answer

yes most common issue is with the payment schedule. I always make sure that the payment is done based on the progress of the work. So you pay them based on the percent completion and it is important that it needs to be in the contract before you get started.Never ever pay the contractor just based on the date schedule, always add the work completion contingency. Also it is important that the material purchase time/responsibility is clearly defined. It would be better that they bring the material and show you the receipts for the authenticity of the products.

Jenny D. · Answer

Mohammad...Thank you for your thorough list. I'm assuming you've done rehabs/flips. Do you have any insight on actions you would take if there was a subcontractor issue...especially in the middle of the project? I know that can be a challenge even with a GC in place.