How do you pay your GC

[Darshan Patel]

We pay our GC every week to manage our Flips and wondering What other methods or payment structure is there to choose from? Any that’s best for both sides ? Or pay after certain completion?

[Christopher Morin]

I pay my contractors however they want to be paid.  Very important though to put the terms of the payment draws in a contract beforehand.  Write it on a napkin and have him sign it if you have to. 

2 weeks ago I had a few handyman walk out on my rehab because they didn't think they got paid fast enough (they were 3 days ahead of schedule).  They had work to do after the drywaller finished, and he hadn't.  But apparently they thought they should have been paid in full the day they finished.  So they just ghosted the home with most of the excess materials, and found out a few days later from the drywall guy who watch them take off.  No huge financial loss, just a pain in the rear.  If payment conditions were talked about before and in writing, then clear expectations would have been set.

Another contractor I had came in and finished a bathroom on a job. I wrote him a check and he cringed.  He had to go back to Texas, and my checks were from New Mexico, which would have taken longer to clear.  So I paid him in cash.  No problem.

I am happy to pay in cash, check, wire transfer, Chilie's gift cards... for consistently used contractors you can even set up a local joint checking account, transfer it in, and let them scoop the money out.  If I pay someone more than 600 on the year, I collect a W9 before the final payment.  And get some sort of receipts too for those cash ones, because you know, the IRS and stuff.