Contractor payment, materials & labor questions

[Vonetta Booker]

Hi, all--I'm in the closing process of my first rehab (a HUD deal), and meanwhile I'm in the process of interviewing contractors.

For the most cost-effectiveness & efficiency, does one usually purchase materials needed & either have the contractor pick them up or delivered to the site?  And does the contractor give info on how much or size of a certain item(s), based on measurements taken beforehand? 

Also, I've noticed that many contractors (at least in my area) don't take credit cards (which I'd rather use as some form of protection in case something goes left)--even the ones seemingly well-established.  Is this a thing across the board? 

[Rob Myers]

I would let the contractor purchase the material directly the majority of the time and save the headache.  On the surface it may seem like you would be saving money, but most contractors are going to make the same amount of money per project whether or not they buy the material.  If you buy materials direct, the markup they were going to make is going to get buried elsewhere in their bid.  As already described above, it can turn out to be more work for the contractor.

Paying for materials directly is another matter.  I don't pay upfront for any subcontracted work on my properties.  If a contractor is insisting on a payment of some sort to get the project started, I'll pay his supplier directly for the materials and get a receipt for the purchase.  The easiest way to make sure someone doesn't run away with your down payment is to not make one.  On the flip side, be fair and pay your contractors promptly when the work is completed.