Two weeks ago we hosted our first webinar, Construction 101 where our co-founder, James Dainard, discussed what to look for in an initial walk through and how to budget your project. In case you missed it, check out the full webinar here. After the 30 minute information session, we had a Q &A with James for our viewers to ask about specific issues or clarifications on any part of the presentation.
During our 30 minute Q & A, our viewers asked some great questions that we would like to thoroughly answer through our blog.
HOW DO I FIND A GOOD CONTRACTOR?
This is one of our most common questions, unfortunately, there’s not one magical answer. At Heaton Dainard, we have fallen into the trap of a bad contractor many times. One of the best ways we’ve found reliable contractors is through word of mouth. If someone does a good job investor’s like to talk about it. Don’t be shy, network with other investors and ask them if they have anyone they would like to recommend. Take time to drive around the city and especially the neighborhood, if you see another flip going on stop by and chat. Ask the people working if they have spare time, or talk to project managers and see if you can get a recommendation. Most importantly, when you find a good contractor, stay with them and establish a good working relationship with them.
DO YOU PENALIZE A CONTRACTOR FOR TAKING LONGER THAN THEY’RE SUPPOSED TO?
In short, yes, typically $100-$300 per day depending on the project, contractor, and contract.
As most investors know, time is money and carrying costs can add up quick! When you write contracts for your contractors be diligent and detailed in what both parties agree upon. Oftentimes projects will have set backs waiting for permitting, or other factors that are out of the contractor’s control. Closely track and save all documentation, keep a journal to write down progress and make note of changes in the schedule. Additionally, keep diligent notes and documentation to support any reasons for withholding payment, or additional late fees.
HOW DO I DEAL WITH A CONTRACTOR WHO DOESN’T COME BACK TO FIX BAD WORK?
This is a common problem with contractors, once they get paid the job is done, and they have no incentive to come back. Before releasing your contractor from the job and paying the last bill, have your property inspected. This saves you from finding all the errors yourself, and potential buyers will feel at ease knowing the house has been inspected.
If you don’t want to go through the hassle of an inspection, outline in your contract that the contractor will receive payment at various stages of completion. In many projects this means a down payment before works starts, and then an agreed-upon percentage once the project has been completed to your satisfaction. Be detailed in your contract to avoid confusion on both ends, giving your contractor incentive to do quality work throughout the project.
Still looking for answers? Feel free to comment below or fill out a form in the column on the right side of the page, and we’ll get back to you with detailed answers as soon as possible!
Don’t forget to watch Part Two of Construction 101, tonight Oct. 16th at 6pm. Follow this link to register!