Pine Bluff, AR · Member since 2016 · 9 posts · 5 votes
I've been working with a contractor on my first 4-plex. They are doing nice work but they are moving slow. Do you have any suggestions that I can use in future contracts to speed up the process?
Real Estate Investor · Elkridge, MD · Member since 2015 · 9 posts · 1 vote
9y
It is true , good contractors are hard to find. In most cases screening with a basic set questions might help you in determining if you are a match. References calling and pics of projects is a good starting point. In addition, just because an contractor has a license does not mean he knows residential codes, test them with a couple questions that you know the answers to it. In the agreement includes clauses of timeline completion with penalties for late completion and the fact that they need to communicate when they will not have at least 2 crew members working on site working and it can create conflicts with other trades such as electricians, HWF , carpet install, etc. Provide them tasks that are important to your scope to show progress to your investors and lenders to get funded. Hope this is helpful as I have learned the hard way and continue learning as I work on projects. Ed Canales, MBC Legacy LLC , Elkridge, MD.
Los Angeles, CA · Member since 2016 · 147 posts · 27 votes
9y
We make almost $0 upfront payments and very small progress payment. Usually 1/4. And we use that as leverage along with bonus and delay fees per day etc.
If they don't like our terms, we move on. Usually they abide due to the sheer volume we crank out.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
9y
If I'm signing a penalty clause, I want the investor to feel my pain, they need to pay the same when I finish early. Hehe. We normally don't collect until the first two weeks, but i don't think we will do that for investors, no premium, no guarantee of payment, naah.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
9y
Anthony Nguyen In my end, it depends on who the client is. If I were an investor, I would put a penalty/premium equal to whatever my cost per day is. But then again, as you said, good contractors definitely are hard to find, specially if you are looking in the lower end of the paycheck, aka also distressed contractors, hehe.