Hope y all have happy and safe thanksgiving in quarantine.
I’m starting to create a checklist for each team for future use.
Everyone in the team is professional and regulated, and their business is highly based on the reputations. Therefore guidelines are available but
I was making a checklist for contractors for my own practice so I can logically sort out the best ones especially in OOS investment that I have not worked with them before.
Can you tell me if the question at the below are good ideas to ask contractors?
If not, can you share some tips when you hire a new contractor who will be working with you for the first time?
- provides me a list of itemized materials and each store
- provide a credit card to the general manager for the contractor to buy materials. So they dont overcharge me on materials.
1st thing I would like to say is, that's great that you want to only have legitimate Contractors that do reputable work, doing the work. Keep in mind that Your costs will be more compared to the guy you find hanging around the big box store because of their experience and reputation. Then I want to add, the questions you asked above are exactly why I do not work with other real estate investors, they are actually insulting. If you are looking for a reputably Contractor, those are the ones that will give you a price for the project, be there to complete the project and complete it on budget. you asking those questions sounds like you want to micro manage their company, does anyone micro manage your co.? If you worry about price gauging on materials, then open your own accounts and purchase the materials yourself, this way you will not have any reason to question the price. Just to let you know, that will probably eliminate most of your top contractors, Contractors usually have more than one project at a time going and time is of the essence for scheduling, relying on someone else to get the material there can delay a job a lot. Where a contractor buys their material is of no importance to you, if they give you a fixed price for the project, as long as they get the material there, get the project done and for the price they gave you, this is their business and if they make a profit on the material then they are happy and have no problem getting the job done for you. I am not saying that all Investors here are the same, but too many like to buy the materials themselves and try to micro manage the contractors companies, I am sure that a good number of the stories here on BP about bad contractors have 2 sides to the story that people do not get to hear, I personally have just made it my policy not to work that way and have been working by word of mouth for 32 years as a general Contractor.
Now if you are talking about Time and Material project, then I would recommend you open an account at a local lumber yard, have the contractor purchase the material on your account, this way you know what exactly has been spent for everything. Also let them order and schedule what they need and when they need it.
Keep in mind, the contractor is running a business, he will charge you a percentage on top of material and labor, if you get it or them, they need to cover their overhead and make a profit.
If you are looking for A good contractor, the best place to start is your local Lumber yard - not the box stores. the guys at the lumber yard will know the most reputable contractors in town because they will know them personally, deal with them a lot and also know of feedback from the contractors customers. always ask any contractors you are thinking of hiring for a list of clients as references, and call them, they will know best about how a contractor is and give you unbiased answers to any questions you have about a contractor.
@Patrick Liska Excellent point Patrick. Lumber yard is a great place to get referrals for a good contractor. Just like Home Depot is a good place to find handyman at 6am.
Thank you for the write up. Now I feel that I wasn’t thinking in deep that I may do a micro management on a contractor not necessarily in intent but just to protect from overcharging materials for new investors like me who can be clueless what they are being charged.
Let me ask one final question.
Once you send a bid to a client, what makes /how is your company the most valuable and different than other contractors for investors to choose you over other competitors?
A lot of it is reputation, honesty, completing projects on time, on schedule and giving the customer what they want. Which is why I said the better the reputation, the more you may spend. As an example, I am overseeing a multi million dollar renovation right now ( hired to over see billing& pricing, help the homeowners in product decisions as well as be on the job every day to make sure the get what they want and the quality of work is done right). I know a lot of framing contractors, but I only brought in one because I know this contractor can do the quality of work that needs to be done, I have other contractors, but they are at different levels and different price ranges. The best thing you can do is socialize and ask around about contractors, maybe not even take the word from one lumber yard, try two. Most contractors do stick with just one for better pricing and better service, A contractor that does a million dollars in business at the yard will get better service than one that does 100,000.
@Patrick Liska I appreciate! Happy thx!