Timeline

6 Replies

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?

@Kimberly Fox

Put in the SOW and contract the date of completion, make sure both parties sign it. And put in penalties per day if they go past the dateline. 

You could also add an incentive that if they complete it earlier, you will pay XXX on top of the bid. 

However, make sure it's a realistic time frame. Good contractors are tough to find but you also need to hold them accountable. 

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.

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.

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.

@Manolo D. Definitely we pay bonus days. Pre-set amounts in the contracts.

As for payment, we've done it with and without upfront/progress payments. All dependent on the relationship obviously.

Without good contractors, nobody would be in business.  

@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.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.