Contractor Contract and Purchasing Materials

[Leland S.]

By searching the forum, I found J Scotts contractor SOW and Contract. I think it's pretty good and covers the basics. 

It also has a clause in there separating finishing materials purchases from contractor supplies, where the investor is purchasing all finishing materials and contractor providing needed supplies. Now according to the Long Distance Real Estate Investing book, he recommends you purchase ALL the materials. I agree with this because, unless you can trust the contractor with your credit card to not pick up that Mountain Dew at the checkout line, you can't. 

My experience is with a company off Angie's list who arranged that way in their contract - buy all materials and charge a 20% fee as a way to make profit, "but don't worry we get contractor discounts in about that much so you're paying the same" (bs, they bought straight from Home Depot with no discounts, and btw what is that $100 saw on there and other equipment?). They stopped providing me receipts and I asked they not return do to unkept promises to resolve blatant issues, sloppy work, and massive overruns. They left with my significant materials deposit and the dispute was never resolved. This is not acceptable for a flip where costs must be in control of the investor. 

So I am apt to start an account with HD and Lowe's so that the contractor can go and purchase any necessary supplies for the flip there against my account. I assume they have a way for me to real time approve purchases prior, or maybe I need to have the contractor send me a photo of the stuff or something. Now I can see contractors having a problem with this, but at the same time, my experience dictates I'd rather not work with someone I can't trust and demands to profit off every dollar I spend on materials. 

In fact, I spoke with a large scale contractor who apparently performed services for houses on the Property Bro's TV show. Out of curiosity, I asked him if buying materials was reasonable and he said absolutely, you just have to find a small solo guy and they should be willing to do it.  

How do you arrange materials purchases?