How to Work with General Contractors

How to Work with General Contractors


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For those who don’t know me, I’m a full-time real estate investor or rehabber. I buy houses to rehab and bring refurbished houses to market to meet the needs of new homebuyers.  I’ve learned how to work with general contractors and why they like working with me.

A contractor wants to know that the rehabber is a professional. He wants to know that the rehabber does quality work. Work the contractor wants to be proud of when he completes the project.

How to Work with General Contractors

  • I never hire the cheapest contractor. I may get multiple bids for a project, but the cheapest bid gets thrown out as if from a leaf blower. Usually, the cheapest bidder will deliver unacceptable work or find ways to bill me more money. The contractor with the lowest bid has underestimated the job, which translates to him putting my job second to other jobs, and the work becomes sub-par.
  • I don’t always use the same contractor. I find I need a handful that I call. If I use the same contractor all the time, the contractor tends to get complacent. Then things start getting slightly more expensive, your jobs start taking a back seat, and the work begins to become less quality. Competition is good.
  • I always use a licensed and bonded contractor. Through my experience, licensed and insured contractors will be a little bit more expensive, but they typically do a better job and are safer at work. To me, it thunders of professionalism.
  • I don’t pay contractors all upfront. I may pay 20% upfront and the rest at the end or something similar. That keeps a general contractor on the bubble motivated to continue the job and do it with excellence.

How to Work with General Contractors

  • I have a detailed plan. When I first started out, I had some idea of what work I wanted to do on a house, but if I were to be honest with myself, the majority of the time, I was just winging it! I’ve learned, for the best results, I need to have an entire breakdown of the project, a 100 percent layout with general ball-park figures attached to the things on my punch list.
  • I have a timeline. I have a reasonable schedule for the project. What I do is work out a completion date with the contractor, and then if they don’t make it, I begin deducting money from the original agreed price. For example, if we decided that November 10th was the completion date, every day after November 10th, I’d deduct a percentage off the original price until completion of the work.
  • Never stop looking for good A good contractor will save me money. I ask sub-contractors who they like to work for. I ask for referrals to competent contractors. Frequenting Home Depot or other building suppliers at 6:00 am shows me who is prepared to work

What does a Contractor Look for in a Real Estate Investor?

A contractor wants an alignment of values and a similar concept of quality they can be proud of.

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Give us a call today at 319-343-6773 to let us know how we can help you.

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