Contractor Payment

[Karey Wright]

I'm a General Contractor in the South Florida area. I've pretty much just worked in the commercial industry and I'm aware that business is conducted differently in the residential rehab market.

I was just curious to know how most General Contractors set up their payment schedules when working on a rehab? Do they usually ask for a deposit? Do they usually get paid a set installment every month? Or do they get paid for work performed? Is retainage being held until work is fully completed?

I'm preparing to start investing in real estate myself and just wanted to know what to expect from other contractors. 

[Manolo D.]

Karey Wright In residential, there is a risk of an investor not paying you, like shady contractors, there are shady investors also. I don't see myself working with investors unless they'll pay full retail or if projects run at least 50k. Many of us come from commercial and me particularly government contracting, I don't as much enjoy when I work with residential, if we accept a sub 25k project, it's like working for free. Investors refuse to understand what it takes and how much it costs for us to do business.