How do you Rehabbers deal with new contractors?

[Ibrahim Hughes]

I’m moving on to a new contractor. Had a trusting relationship with my last guy until he started cutting corners without telling me.

So I have a big job ($90k rehab) for my next crew who I’ve never used before. My building contractor is pretty big in a local area, has several crews and does a lot of work. His portion of the work will cost me $75.5 (interior work, roof and plumbing).

He wants $20k down and I don’t feel comfortable at all with giving him that much money up front and I don’t know if he will really put the permits in, get the materials, show up for the job etc.

So my plan was to pay him $2k after he submitted the permits. Pay for the permits when they’re ready ($2500) and then give him another $5500 until he shows up at the site at the agreed upon day and time (he now has $7500 of my money at this point).

After he shows up to the job site give him the remaining $12.5k until we pass the rough inspection (that’s the $20k). Another $15k is given after the rough and then the balance when he’s done (he’s agreed t o the $15k after the rough and the balance at the end but I haven’t talked to him about the initial deposit).

Your thoughts? How would you experienced rehabbers handle it?