Anyone have a written contract for out of state GC’s?
Gina ColemanPro Member
New to Real Estate · Nuevo, CA · Member since 2023 · 14 posts · 4 votesI recently closed on my first property and it’s going to need a full rehab. My realtor recommended a GC he’s used in the past for his personal properties. I’m wanting to know there are specific things I should add into the contract before beginning the work, ie: terms, payments, timeline, etc. I don’t want to miss anything since I am out of state and will not be present weekly. Perhaps a template or current contract for anyone out of state that I could look at would be helpful!
Thanks in advance!
The GC should provide you with a contract. Here are the things I would recommend looking for in that contract.
1. Scope of Work: Clearly define the tasks and responsibilities the contractor will undertake. I can't tell you how many times I have heard, "That was never in the bid." Put it in writing so there is no miscommunication.
2. Payment Terms: Outline how and when payments will be made. There will be an initial deposit, progress payments tied to milestones, and a final payment upon project completion and satisfactory inspection.
3. Project Timeline: Specify the start and completion dates, including any deadlines for specific milestones. Include clauses for delays and how they will be managed.
4. Change Orders: Detail the process for handling any changes to the scope of work, including how they will be documented, approved, and the impact on the timeline and budget. This is a big one! Change orders will most likely happen!
5. Permits: Clarify who is responsible for obtaining necessary permits! Contractors should do this, but to be safe, I would outline it in the contract.
6. Termination Clause: If things don't work out, define the circumstances under which either party can terminate the contract.
7. Lien Waivers: Require the contractor to provide lien waivers from themselves and all subcontractors to prevent any future claims against the property.
The GC will provide you with a contract .
The GC will provide you with a contract .
Oh ok that makes sense! Thank you!
The GC should provide you with a contract. Here are the things I would recommend looking for in that contract.
1. Scope of Work: Clearly define the tasks and responsibilities the contractor will undertake. I can't tell you how many times I have heard, "That was never in the bid." Put it in writing so there is no miscommunication.
2. Payment Terms: Outline how and when payments will be made. There will be an initial deposit, progress payments tied to milestones, and a final payment upon project completion and satisfactory inspection.
3. Project Timeline: Specify the start and completion dates, including any deadlines for specific milestones. Include clauses for delays and how they will be managed.
4. Change Orders: Detail the process for handling any changes to the scope of work, including how they will be documented, approved, and the impact on the timeline and budget. This is a big one! Change orders will most likely happen!
5. Permits: Clarify who is responsible for obtaining necessary permits! Contractors should do this, but to be safe, I would outline it in the contract.
6. Termination Clause: If things don't work out, define the circumstances under which either party can terminate the contract.
7. Lien Waivers: Require the contractor to provide lien waivers from themselves and all subcontractors to prevent any future claims against the property.
The GC should provide you with a contract. Here are the things I would recommend looking for in that contract.
1. Scope of Work: Clearly define the tasks and responsibilities the contractor will undertake. I can't tell you how many times I have heard, "That was never in the bid." Put it in writing so there is no miscommunication.
2. Payment Terms: Outline how and when payments will be made. There will be an initial deposit, progress payments tied to milestones, and a final payment upon project completion and satisfactory inspection.
3. Project Timeline: Specify the start and completion dates, including any deadlines for specific milestones. Include clauses for delays and how they will be managed.
4. Change Orders: Detail the process for handling any changes to the scope of work, including how they will be documented, approved, and the impact on the timeline and budget. This is a big one! Change orders will most likely happen!
5. Permits: Clarify who is responsible for obtaining necessary permits! Contractors should do this, but to be safe, I would outline it in the contract.
6. Termination Clause: If things don't work out, define the circumstances under which either party can terminate the contract.
7. Lien Waivers: Require the contractor to provide lien waivers from themselves and all subcontractors to prevent any future claims against the property.
Thank you so much! Exactly what I needed!
I recently closed on my first property and it’s going to need a full rehab. My realtor recommended a GC he’s used in the past for his personal properties. I’m wanting to know there are specific things I should add into the contract before beginning the work, ie: terms, payments, timeline, etc. I don’t want to miss anything since I am out of state and will not be present weekly. Perhaps a template or current contract for anyone out of state that I could look at would be helpful!
Thanks in advance!
So, it seems you are trying to do this all on your own, NOT a good Idea. I have seen many get completely ripped off and worse, contractor takes the money and poof their gone. How do you know you purchased an overall good deal? I just yesterday spoke with an investor here on BP who was about to close on a duplex in N Collinwood for 140k PLUS 30K in reno, TERRIBLE. I told him no, your overpaying buy about 30k. Just because it looks good on paper does not mean its good. I have done 100s and 100s of deals there, and thousands of reno/repairs all while living OOS , happy to recommend. I guaranty the contractor your realtor recommended is overcharging you buy at least 30- 50%. Who's overseeing this job? How do you know you are being charged a fair price? Do you know what the reno should really cost, not just agreeing with the GC? Feel free to reach out I see OOS investors get completely ripped off many many times .
The GC should provide you with a contract. Here are the things I would recommend looking for in that contract.
1. Scope of Work: Clearly define the tasks and responsibilities the contractor will undertake. I can't tell you how many times I have heard, "That was never in the bid." Put it in writing so there is no miscommunication.
2. Payment Terms: Outline how and when payments will be made. There will be an initial deposit, progress payments tied to milestones, and a final payment upon project completion and satisfactory inspection.
3. Project Timeline: Specify the start and completion dates, including any deadlines for specific milestones. Include clauses for delays and how they will be managed.
4. Change Orders: Detail the process for handling any changes to the scope of work, including how they will be documented, approved, and the impact on the timeline and budget. This is a big one! Change orders will most likely happen!
5. Permits: Clarify who is responsible for obtaining necessary permits! Contractors should do this, but to be safe, I would outline it in the contract.
6. Termination Clause: If things don't work out, define the circumstances under which either party can terminate the contract.
7. Lien Waivers: Require the contractor to provide lien waivers from themselves and all subcontractors to prevent any future claims against the property.
All sounds 100%, however this is Cleveland, many (NOT ALL) contractors will tell you exactly what you want to hear and sign whatever you want, means nothing. What are you going to do when they do not do the job? Sue, good luck with that, zero will happen. Meanwhile the prop sits vacant generating zero income and costs you money. What are you going to do when they take your money and then stop answering the phone? I have seen it all over the last 10 years. Heck even guys I have used many times, steal from me. Just last month, 10k POOF gone, one of my guys disappeared. Oh well, but I have the resource to keep moving forward and I have about 25 guys, so my client is covered. Jack your advice is spot on, 100% totally agree, excellent detail, but in the end, NONE of it will get your money back when and if the contractor fails
All the best