All Forum Posts by: Zain B.

@Dylan Vargas I was very embarrased to admit that I was wrong and almost didn't post but then I thought, what the heck... these guys are here to help me and I screwed up so time to own up. We are changing the locks this evening once we notify contractor A of the termination of his contract. 

@Brad S. yeah this was not too expensive of a lesson. It sucks that I waste a week but I am glad this was a small lesson learned early on as opposed to three weeks and thousands of $$ in. 

@JD Martin I will check his credentials before signing the contract. He said that he will email his license documents as well as insurance credentials today around 5pm so I can check and be satisfied. How do I ensure the quality of the work performed will be good? Is this something that you just have to roll the dice? I asked him to show pictures of the work that he has performed and he did have tons of pics. Showed me a couple of examples. 

@Valerie Hiscoe my concern is that the project will be completed on time. How do I make sure that this contractor stays true to his timing and the draws being released are in line with work completed. I guess once he signs the contract, he will have to abide by the contract and finish in time. Have you ever had a clause in the contract that the contractor will be penalized x amount of $$ if he does not complete the project on time. If so, what is that as a % of the overall project cost. Good tip on signing the lien waiver, is there a sample you can share? 

@Ingrid J. @Account Closed I told this new contractor that I am not comfortable paying up front and he said that he does not want to roll the dice and not get paid. I will bring up the lien point. Again, I think I need to be more firm but the compromise that he came back with was 10% deposit up front at the start of the job and the rest based on a draw schedule (10% would be $800 upfront deposit for the entire project).  

He will give me an update every wednesday for the work to be completed by friday and once I inspect the work completed on Friday, I have to release payment for the work done that week. Friday he will also provide me with a list of materials that needs to be at the job site by Monday for the entire week. He will also change the locks and help me fire Contractor A. He advised me not to go after the contractor A for the $2,000 deposit as that would be the easiest way to defuse the situation. According to him, the demo would have costed me $1,000 anyways and he did some additional work and had his guys at the job site for a few days. Contractor B's advice is to let contractor A go. Any advice your all can provide would be greatly appreciated and followed this time around!!!

To all, I know I have gone against each and everyone of your advice. The way I see it, the guy either shows up tomorrow and works according to schedule or he doesn't. I have back up lined up. I really hope this works out. I will keep folks updated in the coming days. Thank you once again for all of the advice. I made a decision early saturday morning to give him another shot before really having the benefit of all of your comments over the weekend. More to come...

@Valerie Hiscoe your advice on a lien waiver is extremely helpful. I will make sure I get that if/when we get there on this project. Going forward, its all by the books. 

@Ron Flatt good to know that industry standard is 30% when job is half finished and the remainder at project completion. I am just reading your response now but going forward that's how its going to be

@Doug W. I hear your rationale but I really don't want to loose the $1,000. Since I am not paying him a dime more until work is completed, I think my downside is somewhat mitigated. Now I hear you loud and clear that this might backfire and my project might get delayed... we will see what happens. I might very well come back and accept that I was an idiot going against all of the advice all of you have given but I was there and I saw it in his eyes that he wanted to get the job done and get paid. I am gonna give him another chance.

@Brad S. thanks for clarifying industry standards. I will keep this in mind of my current as well as next project. 

@Matt K. I agree with you working with a legitimate contractor going forward is the way to go. I just don't want to loose the $1,000 that I already paid him. The way I look at it, if he performs the work as originally agreed, I have nothing to loose. 

@Ruth Lyons I hope I don't have to get the state's licensing board involved but this is a really good piece of advice. I really appreciate you sharing your experience. I will direct message you to get more advice going forward. I really need mentors as I learn and grow. 

@Aaron McGinnis I have interviewed real contractors and as discussed earlier, if things don't work out than I have plan B. Really hoping this does not cost me but as Ruth mentioned, I have recourse.

@J Scott, I hear you loud and clear that I need to treat this as a business and not a hobby. As mentioned earlier, this is my second flip and I am learning on the fly. Obviously, since I work in your backyard, and pointed guidance as it relates to contractors / flipping would be extremely helpful. Happy to jump on the phone for 15 mins or meet for coffee. I am taking this business seriously but I really have no one to guide me along. I am literally learning on the fly as you can tell. Any help would be greatly appreciated. 

@Jd Martin, I want to work this situation out and try to be done with the project. As discussed with another contractor, seems like my mistake could cost me $1,000 which is a heck of a lot of money but its a lesson learned. This time though, I have everything in writing from Contractor A and we both signed and notarized the agreement so hopefully he will honor his end of the bargain. 

@Chris Seveney I agree with  you and J Scott, going forward, it will be a licensed and insured contractor with everything in writing. I will directly message you to get more details on help as it relates to scope of work.

Apologies for the delay in my response but just got back to NJ after a 3.5 hour drive and spending the weekend down in Maryland. I wanted to thank everyone for the time and support. Honestly, your candid opinion has help me tremendously. As it relates to any update: I went down to MD and had a face to face conversation with the contractor. Hear me out before you chew me out. I talked to the contractor and tried to figure out why all of a sudden there was a change in his demands. Based on his story, he said that he just finished a project for another flipper and after the contractor completing the project to the flipper's specification, the flipper decided to flip on him and said that he will pay the contractor once he sells the house. Not sure how true the story is but the contractor was afraid that this will repeat. I flipped another property in the area so I took to my other property and showed him the kind of work that I completed. After that, I called my roofing and vinyl siding contractors and had him communicate with this new contractor. They both verified that payment was received upon completion of my job in full. This elevated his concerns and was a bit more amendable. We then proceeded back to my property where work needed to be completed and ironed out a detailed scope of work and a payment schedule. According to the contractor, it will take 3 weeks to complete the project and we agreed to three draws at the end of each week. In this case, he completes the job and gets paid for the job completed. I did not pay him a dime more than the advance that I paid already. In the meantime, I called three other contractors (this time, licensed, bonded and through references), explained to them the situation and scheduled out a detailed scope of work and payment schedule. To the extent contractor A does not show up tomorrow, one of three contractors that I interviewed this weekend will get the job. I will pay more than what's agreed with Contractor A but these guys will be licensed, bonded and insured. I also cross referenced with the tree contractors and the demo work done thus far would have costed me $1,000 which means that my tuition would cost me $1,000 (lesson learned). No excuses but this will be my second full scale flip and a lesson learned. I know I am going against the advise and wisdom provided by so many talented individuals here but the way I look at it, I have nothing to loose if I give this guy one additional day to come through on the initial agreement that we discussed. If he does not show up or tries to pull a fast one on me down the line, I have not given him any additional dollars. 

@Ingrid J. I also think he is a sour apple and wanted to make sure that I sound check with the community before I make any rash decisions as this will set me back a week or so. I have started interviewing other contractors as back up. 

@Account Closed its good to know that a licensed contractor cannot take more compensation that work performed. I will try to talk some sense into this guy. If not, will cut the cord. 

To all, my next milestone is the bathroom. I told him if he completes the 3 bathrooms that I have at my property, I will release another $2k-$3k. And than more payment release after paint completion and than final payment upon completion of the job. Usually, how many milestones do you have on a small job that is supposed to last 2-3 weeks? Is it weekly or as Ingrid mentioned, 50% upfront and 50% at completion. Part of me says, 50% upfront for a contractor that I have never worked with is too much risk. Any thoughts?

I need some advice dealing with a contractor. I have started renovation on my Maryland property and I hired a contractor. We mutually agreed for him to charge $11,500 for his labor. I would provide all materials and have my dad manage the project alongside the contractor. Any material request / shortages, my dad would run and grab it from home depot. The contractor came to work for a couple of days and did work as it relates to demolition of three bathrooms / some walls, taking out old laminate flooring and creating framing in one room.

We had agreed that I would pay him $2,000 relatively shortly once he started the project and than will give him another $3,500 half way through the project and than pay him another $2,000 75% of the way and the final payment upon completion of the project. He agreed and started work. I gave him the $2,000 check and once he cashed his check, he started making excuses and not coming to work saying that he fell sick (which lasted for 3 days). He just texted me saying that all contractors charge 35% upfront and if I could not provide the 35% upfront, he would not work anymore. He is not a licensed / bonded contractor. Someone who knows his trait and seemed like a trust worthy guy. 

My suspicion is that I am getting played. I am afraid that he has found another contract or his sub contractors are not available. He wants another $1,500 and than will make us run around for completion of this job. Is my suspicion correct? He is not a licensed or bonded contractor. He is a great handyman that knows his trait. We found him in a home depot early in the morning (J Scott) strategy.

My question to you is, how do you work a payment scheme with your contractors? I am sure you have your set crew but if you were to work with a new contractor, would you give him/her 35% upfront? He also changed his terms after starting the project and wants 70% half way through the project. As mentioned earlier, he does not come through any reference. I found him in Home Depot. Should I give in to his demands or walk away. Any help you could provide will be greatly appreciated. I am going down to Maryland tomorrow morning to meet him. Apologies for the late night request but wanted to see if the community could provide any timely advice. Thanks in advance for your help.

Rookie Investor

Hello BP, 

I am in the attorney review period and the contract stated the following "Seller shall pay for the preparation of the Deed, realty transfer fee, lien discharge fees, if any, and one-half of the title company charges for disbursements and attendance allowed by the Commissioner of Insurance; but all searches, title insurance premium and other conveyancing expenses are to be paid for by Buyer.

Seller's attorney has requested to delete the following language Delete "and one-half of the title company charges for disbursements and attendance allowed by the Commissioner of Insurance." Is this pretty standard to remove? 

I know that nobody will provide any legal guidance but looking for what's standard. Property is located in NJ. 

Thanks