Real Estate Agent · Cypress, CA · Member since 2018 · 88 posts · 41 votes
Hi everyone,
Here I am posting another question regarding my first investment.
I closed on a house that needs a bit of work done. The PM that I hired has many vendors considering they manage over 750 properties. They have assigned a GC and I received an estimate for $5870 they want the full amount up front.
Questions:
1. Is it normal to pay the full amount up front before starting the project if the PM found the GC?
2. Regarding the estimate of $5870 I know this is just an estimate, but how likely is this number going to increase/decrease? This is a first for me dealing with contractors OOS.
I can provide the quote in private messages if necessary.
@Jason Martinez grats on your property. If you trust the PM I wouldn't be to worried about the GC. On the estimate I would get a line by line estimate so you can see exactly where your money is going. It may seem obnoxious but its for your safety and knowledge. You want to know where your money is going down to the dollar. I personally wouldn't pay up front. I would set up draws depending on how long the work would take. Its just my opinion but at the end of the day you need to build relationships with the PM and GC so you may have to give a little. Maybe present 50% and 60% on the end of the contract, yes I said 60% if he can get the work done prior to your dead line. Hope this helps you a little bit.
@Jason Martinez I would send half, and final payment when PM sends you pictures of completed job. There is no reason you need to pay it all upfront. Tell PM you will send final payment next business day, so they have it in a few days. Not unreasonable considering you aren’t local it seems.
Hi Matt.
I have confirmed with the PM and he stated, "The contractor can request up to 50% of payment for materials. The remaining balance will be paid once I've verified the work is completed."