HELP: How to effectively manage contractors?

Question

I am currently in the middle of a rehab which I plan to make a rental and then refinance.  I have signed contracts with all my sub contractors, however, whenever I check on how things are going they are not happening at the pace I expected.  I tried to put together a schedule in the contract but nobody would accept that.  How do you manage  contractors to show up on time and be timely getting the job done?  I am constantly getting the run around since they have other projects and service calls.  How do I get them to focus on my job specifically?  I really don't like micromanaging them either but I believe I will need a project manager to move forward and provide oversight.  If I don't contact them everyday I don't feel like progress is not being made.  By the way all the contractors were highly recommended to me by group of investors. If any has any knowledge to share please do so!  Thanks in advance.

Matthew Paul · Answer

You hired a bunch of sub contractors , that makes you the general contractor .  the general contractor manages and schedules the subs .

Now if you dont have communication and experience you may assume the plumber will take 2 days to do the rough in , and then you schedule the drywall the next day . But the plumber takes 2 and a half days and the inspector cant come for another day and a half . You are out 5 days instead of the 2 days you thought . Now its the weekend , 2 more days  . Now the drywall crew isnt waiting on you , they have another job to do so you have to wait 3 more days for them .  1 small over site puts you a week plus out , and you are rescheduling everyone else , and the subs already have those times you want committed to someone else .  Welcome to the wonderful world of construction .

J Scott · Answer

A few ways:

- Always put a completion date (with penalty clause) in the contract.   I've never enforced a penalty, but it still provided a legal basis for firing a contractor or suing of he doesn't complete the work in a timely fashion.

- Don't pay ahead of work completed, or at least minimize payment.   That way you can fire the guy at any time without losing money and he knows he needs to keep working to get paid.

- Require your subs to call in their inspections before they get a check.   For example, when you hire a plumber to do rough-in, have him pull the permit, then call in his inspection for one week later, then hand him his check.  Her now has one week to complete the job. Obviously, this doesn't guarantee anything, but it doesn't hurt.

Katharine Chartrand · Answer

i handle multiple projects with many contractors working together.

first i recognize that scheduling is very challenging for contractors given that they need to stay busy on a whole set of projects which proceed with pace and timing that they don't control.  i recognize that i am only one of many clients and i am as flexible as i can be without compromising progress on my project.

second, when i need a specific piece of my project completed because it is critical to progress, i give the relevant contractor as much notice as i can of the exact timing i need.  i get a firm commitment for that date by e-mail or text.

third i follow up as the date approaches. if i have any doubts about the contractor's availability, i line up another contractor as a backup.

if the contractor has been appropriately informed of what i need and has agreed to do it and fails to perform, i switch to another contractor.  you have to have a contract/agreements that allows this.

it's important to throw people off your jobs if they fail to perform in any significant way, including not making the schedule.  it's equally important to be very clear and fair about how and why you do it.  it's also important to recognize that the contractor who failed to perform may for you may have been in a bind he did not control.  i don't necessarily blacklist contractors for schedule failures ... i will use them again.

the key is to maintain a reputation of setting clear expectations and then holding people accountable.  if you do this, your reputation will proceed you and you won't have a lot of problems. you want to be a good client with reasonable expectations.

Account Closed · Answer

Did contract call out specific timing requirements?  Many will secure the job, start work and spread themselves out across as many as possible so they have workload certainty.

Linda Weygant · Answer

One of the things a fellow investor told me about managing subcontractors...

Ask for invoices on Friday, hand out checks the following Wednesday.  Do not, under any circumstances pay on Friday if you are expecting anybody to show up on Saturday.  They generally do not.

While I found his attitude a little insulting (essentially saying that all tradesmen go out and drink their paycheck Friday night and are too hungover to work on Saturday), I did like the concept of looking at what they are invoicing for, comparing it to the quality and quantity of work actually done, having a few days to make sure it jives and then cutting checks.  As long as you are consistent with always paying on time and honoring your terms, I would think your tradesmen would find this fair.

I haven't tried it yet myself, but I'd like to for my next project.

I've also heard of withholding 10% - 20% of a project until after it all passes permit inspection, but am not sure how common that is or how well it flies.

Christina R. · Answer

I am quickly learning that money is the key player here; s/he who controls most of the money has the upper hand at all times.  Learned so much just in the last 4 weeks that I will do differently on the next rehab.

Mike Campbell · Answer

In my opinion that was your 1st mistake, " He who helps plan the battle never battles the plan" from how to win friends and influence people by Dale Carnegie, a must read.

The above means you sit down with the trades individually and discuss there part and ask them what is the best way to move forward and as efficiently as possibly, they will tell you how to develop the schedule and plan, this dose not mean you do and agree with everything they suggest, this give them a say and respect and its there idea, so they think.

I have done a few projects and I have never needed signed contracts with the trades, theirs more to managing projects then nuts, screws and wood, you are in the people management 1st and the trades are running there own business to make money, trust me that comes 1st in there minds.

Mike

Christina R. · Answer

I am sooooooooooo way interested to see the replies you get to this,  lol.

My first thought is that the group of investors that recommended them have been using them consistently for years in that neighborhood and therefore are at the top of the food chain when it comes to prioritization of work.

Christina R. · Answer

Today my first rough-in inspection failed (HVAC)  - need to put the return in the ceiling instead of the floor upstairs per the inspector (who I'm told by my contractor is one of those nasty inspector guys... I couldn't tell ya!).

So I tried the "glass half full approach" by asking my HVAC guy, "Did we pass everything else?"  the response was yes so I said, "well great, then all we have to fix is this one thing."

He was like, "No, not great - I was expecting a check from you today"  because he gets his next payment when the rough in is greenlighted.

I can almost guarantee you this will be fixed in 24 hours and our only hold up will be scheduling with Mr. Inspector to come around again.

Hence my comment above - s/he who controls the majority of the money is in control of the project.  With the 3 major trades I did a third-third-third.  Third up front (so far so good, but that could have been a major mistake), third at rough in and third at final.  Going forward it's going to be much different with the bulk of it coming at the final.

Maryland law stipulates a contractor cannot ask for more than 1/3 up front.  Though when I was getting quotes people liked to throw out 50% all the time....

Matthew Paul · Answer

This past winter my electrician got to a house on a Friday and set all his boxes , ( the customer was in a "rush" to get the house done )  Monday he gets there to pull the wire and he is on the floor laughing , he calls the guy flipping the house and tells him " chief you have to slow down a bit , screw ups cost you money "  Oh by the way , the electric , plumbing and insulation  go in BEFORE the drywall . Call me when they rip all this out so we can finish .

HELP: How to effectively manage contractors?

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