subs getting paid

[Marcin G.]

Lets say I have one agreement signed with GC . I pay him HIS portion and I pay subs all that is due to subs. Is that a problem ? do I need to have separate agreement with subs as well since I am paying them. By the time I get comfortable with the game I need to make sure I don’t stumble ..I cant have GC getting paid on the draws by the contract …and subs walking away hungry …is it something that can be done ?

[Jay Hinrichs]

@Marcin G. @Annette Hibbler Pre 08 paying the GC and trusting him to pay subs was common practice... as builders and GC's went down like fly's in the great depression.. many builders and GC did not pay the subs.. and this created all sorts of problems.. For example in my home state of Oregon.. properly filed sub liens are SENIOR to your bank construction loan. Title companys ended up paying millions upon millions to subs that the GC did not pay.

So what I do now is we always control the money. Unless the GC Contractor is one of my inner circle.. Even then there is only one I pay the gross amount to.

the rest I pay the sub and get the lien release from the sub for my files.. When we are done with the home we take a copy of the Lien releases to title co. and we have no problem getting early issue title or straight title policy.

I had to build about 7 houses twice when one GC robbed peter to pay Paul and the construction loans were in my name it was a nightmare on all fronts.

My moto now is CONTROL the MONEY since the bucks stops with the owner

And how i work with my GC's and I have 5 of them on different projects Is they charge a flat rate and we pay true cost to the subs.. No paying the GC who is marking up the sub.. And or you lose control of the money and project.. Thats how I do it...

On rehabs 2500 to 7500 is common fee depending on the scope of work.

new builds 7500 to 15,000 is what I pay the GC and as stated I pay the subs direct no mark up what so ever and I get all the material discounts as well the accounts are all in my name. the bill comes direct to me.. I have total control of the project. Since again the buck stops with us since we are the MONEY