How do you make sure your GC pays the subs?

[Abigail J Steinert]

Newbie here, wanting to get into the flipping business and in the information gathering stage.

I just listened to the podcast where the General Contractor pocketed the $1000 that he was supposed to pay the electrician. The electrician didn't get paid so they put a lien on the house. It was a huge blunder.

What do you have to do to avoid this type of issue? Do you have your GC sign contracts? Do these contracts have to be legal and through an attorney or notary? How do you enforce the contract if it was violated?

[Nick Rutkowski]

@Abigail J Steinert

Easiest way would be to GC yourself and hire your own subcontractors. Then you’ll know they get paid.

You could get a lawyer involved but what contractor would sign a contract paranoid that their client will want to sue them. You could ask for references from the next GC and get their subcontractors to tell you about the GC business ethics. It’s kind of a stretch but it could work.